Ethical Thinking and Decision-Making for Insurance Professionals
Frameworks, not feelings
Ethical decision-making begins with recognising that a choice can be legal, profitable, and still wrong. Candidates should know the main lenses: consequentialism (judge an act by its outcomes), deontology (duties and rules regardless of outcome), virtue ethics (what would a person of good character do), and justice/fairness (are similar cases treated alike). Professional codes usually blend rule-based duties with fairness reasoning, so an answer that relies only on "what produces the best result for the company" is almost always a distractor.
A reliable process
Use a repeatable sequence: (1) identify the ethical issue and the stakeholders; (2) gather the facts, including the policy wording and any regulation; (3) list options; (4) test each option against duties, consequences, fairness, and the profession's reputation; (5) decide and document; (6) act and review. Documentation matters because ethics is judged on reasoning, not only on outcome.
Traps in questions
- False dilemmas: options that force a choice between loyalty to the employer and duty to the client. The professional answer usually satisfies both by escalating or disclosing appropriately.
- Rationalisation language: "everyone does it", "no one is harmed", "it is technically permitted". These signal a wrong option.
- Conflict of interest disguised as efficiency: a referral fee, a gift, or a shortcut that benefits the CIP personally.
- Over-reliance on seniority: "my manager told me to" does not transfer ethical responsibility.
Rule of thumb
Apply the sunshine test: if you would be uncomfortable explaining the decision to the client, your regulator, and the public, do not make it. Pair it with the reversibility test: would you accept the same treatment if you were the policyholder?
Worked example
A broker learns a client omitted a material fact. Cancelling quietly protects the insurer; ignoring it protects the client. The professional path is to disclose the omission to the insurer and advise the client honestly, because the duty of good faith runs both ways and the CIP cannot conceal a known material fact.