Duties to the Profession and to the Regulator
Professional obligations
Duties to the profession include competence, honesty with colleagues and insurers, respect for the licence, and adherence to codes of conduct. Agents must not make false statements on applications, must not backdate documents, must not submit business they know to be unsuitable, and must not disparage competitors with false claims. Continuing education keeps competence current; failing to complete it can lead to licence suspension.
Duties to the regulator
Regulators expect candour and cooperation. Agents must respond to inquiries truthfully and promptly, report material changes (such as a criminal charge or a change in licensing status), and comply with reporting and record-keeping requirements. Concealing a problem is worse than the problem itself. Self-reporting an error, with a remediation plan, is generally treated more favorably than a discovered concealment.
Traps to watch
- Assuming a minor error need not be reported; material errors and conflicts should be disclosed.
- Believing that loyalty to an employer or MGA overrides the duty to the regulator.
- Treating a regulator's request for information as optional.
- Confusing the duty to the profession with loyalty to a particular insurer.
Worked example
An agent discovers that an application was submitted with an incorrect answer about a medical condition. The ethical response is to notify the insurer immediately, correct the record, and inform the client. Hiding the error to protect the policy is a breach of the duty to the profession and the regulator, and may constitute fraud.