CIP Professional Ethics Exam key terms

A situation in which two or more moral obligations conflict, so that any available choice requires sacrificing something of genuine value and no option is clearly right.

The willingness to take the right action, or to speak up about wrongdoing, even when doing so risks personal cost such as criticism, lost business, or strained relationships.

An approach that judges an action by its consequences, favoring the choice that produces the greatest overall benefit or least overall harm across everyone affected.

An approach that judges an action by whether it conforms to duties and rules, regardless of the outcome, holding that some acts are wrong in themselves.

An approach focused on the character of the decision-maker, asking what an honest, fair, and prudent person would do in the circumstances rather than testing rules or outcomes.

A structured method of identifying everyone affected by a decision, understanding their interests and vulnerabilities, and weighing those interests before choosing a course of action.

A documented step-by-step process for recognizing an ethical issue, gathering facts, identifying affected parties, evaluating options, deciding, acting, and reviewing the outcome.

The view that right and wrong depend entirely on culture, context, or personal opinion, a position that conflicts with the existence of consistent professional standards binding on all practitioners.

A failure to notice that a decision has an ethical dimension at all, often caused by routine, pressure, or framing that presents a moral question as purely technical or commercial.

A pattern in which a cohesive team suppresses dissent and stops testing assumptions, producing poor or unethical decisions that individual members might have questioned on their own.

The mental process of inventing plausible justifications for a choice that the person senses is wrong, allowing conduct to continue without admitting the underlying ethical problem.

A pattern in which small, seemingly minor ethical compromises make progressively larger ones easier, so that conduct drifts far from the original standard over time.

A formal published statement of the principles and rules that members of a profession must follow, forming the benchmark against which their conduct can be judged.

The expected level of knowledge, skill, care, and conduct that a qualified practitioner must meet, set by the profession and often reinforced by regulators or employers.

A legal and ethical obligation to act solely in the best interests of another party, placing that party's interests ahead of the practitioner's own.

The duty to protect information learned through a professional relationship, sharing it only with proper authorization or where the law or public safety clearly requires disclosure.

Situations where a practitioner's personal, financial, or other interest could improperly influence professional judgment, requiring disclosure, avoidance, or management.

The thorough and reasonable investigation a practitioner must carry out before giving advice, accepting a risk, or signing off on a decision, rather than relying on assumption.

The obligation to maintain the knowledge, skills, and qualifications needed for the work undertaken, and to decline or refer matters outside one's expertise.

Ongoing learning and training that keeps a practitioner current with law, products, and practice, supporting the duty of competence throughout a career.

The reasoned application of knowledge, standards, and experience to reach a defensible conclusion in circumstances where rules alone do not supply the answer.

The formal procedure by which a professional body investigates alleged breaches of its standards, imposes sanctions, and provides fair opportunity to respond.

Reporting suspected wrongdoing, such as fraud or serious misconduct, to an appropriate internal or external authority, often protected by law when done in good faith.

Consistently acting in accordance with stated values and standards, including when no one is watching and when honesty carries a personal cost.

Telling the truth and treating customers, insurers, and colleagues even-handedly, without misleading, exploiting vulnerability, or concealing material facts.

Making a false or misleading statement, or omitting information, so that another party forms an incorrect understanding and makes a decision they otherwise would not have made.

Failing to reveal a fact that a reasonable person would consider material to the decision at hand, such as a relevant fact when applying for insurance cover.

The principle that parties to an insurance contract must deal openly and honestly with each other, disclosing material facts rather than exploiting the other side's ignorance.

Deliberately deceiving an insurer or claimant for financial gain, for example through exaggerated claims, staged incidents, or false application details.

A principle requiring firms to deliver fair outcomes for customers across product design, sales, claims, and complaints, rather than merely complying with formal rules.

Customers whose circumstances, such as age, illness, or financial hardship, reduce their ability to understand or act, requiring extra care and adapted communication.

Revealing payments or benefits received in connection with a sale or placement so that the customer understands how the adviser is remunerated and can judge potential bias.

The obligation to collect, use, store, and share personal information lawfully, transparently, and only for stated purposes, with appropriate security.

Applying fairness, promptness, and good faith when assessing claims, including avoiding unjustified delay, biased denial, and pressure on claimants to settle low.

Basing risk selection and pricing on relevant, lawful factors applied consistently, avoiding unfair discrimination or misuse of personal information.

The practice of gathering and verifying sufficient information about a client's identity, circumstances, and needs before advising or transacting, supporting suitability and anti-money-laundering duties.

The requirement that advice and recommended products match the customer's documented needs, objectives, and circumstances rather than the seller's targets.

Recommending a product because it pays the adviser well rather than because it fits the customer, a scenario testing conflicts of interest and disclosure duties.