CIP Professional Ethics Exam flashcards

31 cards. Read the term and the definition here. The deck at the top of this page is optional.

Ethical dilemma

A situation in which every available option carries a genuine moral cost, so the decision requires weighing competing duties rather than simply identifying the one correct answer.

Consequentialism

An ethical framework that judges an action by its outcomes, choosing the option that produces the greatest overall benefit or the least overall harm among those available.

Deontology

An ethical framework that judges an action by whether it conforms to duties and rules, regardless of the consequences, so a prohibited act remains wrong even if it helps.

Virtue ethics

An ethical framework that asks what a person of good character would do, focusing on honesty, fairness, and courage rather than on rules or calculated outcomes.

Test of publicity

A decision test asking whether the action could be fully disclosed to clients, regulators, and the public without damaging trust; failure indicates the action is ethically suspect.

Stakeholder analysis

A method of listing every party affected by a decision, assessing the harm and benefit to each, and using that comparison to choose among the available options.

Conflict of interest

A situation where a personal or financial interest could reasonably be seen to bias professional judgment, requiring disclosure and often removal of the interest itself.

Rationalization warning sign

A phrase such as everyone does it or the client will never know that signals an attempt to justify conduct the decision maker already suspects is wrong.

Ethical decision steps

Gather facts, identify stakeholders and duties, evaluate options against standards, choose and act, document the rationale, and review the outcome afterwards.

Professional integrity

The consistent alignment of conduct with stated ethical standards, including honesty in representations and refusal to act improperly even when no one is watching.

Competence obligation

A professional accepts only work they are qualified to perform, maintains knowledge through continuing development, and declines or refers unfamiliar matters to another qualified party.

Confidentiality rule

Client information is disclosed only with consent, when legally compelled, or to prevent serious harm, and then only to the extent necessary for that purpose.

Objectivity standard

A professional duty to give advice free from bias, undue influence, or financial self-interest, disclosing anything that could reasonably be seen to compromise independent judgment.

Informed consent

The client's agreement to a course of action given after receiving clear, complete information about costs, alternatives, conflicts, and consequences, without pressure.

Documentation standard

A record of the advice given, information relied on, alternatives considered, and the client's decision, so the professional judgment can later be explained and defended.

Representation accuracy

A duty not to misstate qualifications, products, or scope of cover, and to correct any error promptly once it is discovered rather than let it stand.

Regulatory cooperation

A duty to respond truthfully and on time to supervisors, to self-report material breaches, and never to conceal or mislead a regulator investigating conduct.

Professional boundary

The distinction between informing the client, which is the professional's role, and deciding for the client, which remains the client's responsibility.

Utmost good faith

A mutual duty on insurer and insured to disclose material facts honestly, forming the foundation of the insurance contract and of fair dealing between the parties.

Material fact

A fact that would influence a prudent insurer's decision on whether to accept a risk or on what terms and premium to set.

Non-disclosure

Failure by a proposer to reveal a material fact, which may render the policy voidable, with the remedy depending on whether the omission was innocent, negligent, or deliberate.

Misrepresentation

A false or misleading statement made to an insurer during underwriting or a claim, which may entitle the insurer to avoid the policy or reduce a payout.

Insurance fraud indicators

Warning signs such as inflated or altered claims, inconsistent timelines, and policies purchased shortly before a loss, which are reported internally rather than investigated alone.

Remuneration disclosure

Telling the client about commissions, overrides, and contingent payments that could influence the recommendation, so the advice can be judged on its merits.

Treating customers fairly

A market conduct standard requiring products suited to the target market, clear pre-sale and post-sale information, suitable advice, and no unreasonable claims barriers.

Whistleblowing

Reporting wrongdoing through internal channels first where safe, and escalating externally when the matter is serious, concealed, or the reporter faces retaliation.

Data ethics

Collecting only necessary personal data, protecting it, and using it solely for disclosed purposes, with the same standard applied to paper and digital records.

Client omission request

When a client asks to leave out a material fact, refuse to assist, explain the consequences, record the decision, and decline to submit a knowingly false proposal.

Employer pressure to mis-sell

Escalate through internal channels, rely on documented client-need evidence, and refuse to certify advice believed unsuitable, even at cost to the relationship.

Colleague misconduct discovery

Do not conceal it; report through the proper channel, preserve relevant records, and limit discussion to those with a genuine need to know.

Error disclosure

Informing the client promptly when an error in advice or documentation is found, explaining its effect, and correcting it, because concealment compounds the original breach.