Customer Service Focus

Ethics, information and privacy

CSRs face everyday ethical choices

By Cleva Moore, CIC, CRM, CPCU, AIS, AU, APA

In recent years, the news media have been full of reports of business professionals with unethical behavior. Sometimes ethics is defined as “principles of moral conduct.” Another definition says that ethics are “patterns of acceptable behavior to society as a whole and among your peers.” These are really two different concepts. Just because everyone is doing it doesn’t make it right.

Statistics from the Josephson Institute reveal that a high percentage of high school students, for example, admit to stealing from a store, cheating on an exam, or lying to parents. I don’t think many kids spontaneously decide to lie or cheat or steal. Chances are, they see a manifestation of it in their parents or some other adult and conclude that it’s okay. We get upset that our kids don’t develop into exemplary human beings, but we set the stage for their breakdown by being so inconsistent ourselves. This is true in the workplace also.

The concepts of ethics

The values of honesty, respect, responsibility, caring and fairness are common to most discussions of ethics. For example, we all understand what it means to be lied to, and no one likes it. In a book titled Lying, author Sissela Bok says, “If I lie to you, then I deny your right to know the truth.”

Agents have duties to the insurance company including loyalty, good faith, reasonable care and contractual duties. Agents have duties to the client including providing adequate coverage, proper legal notification—cancellation or non-renewal, placing business on the best possible terms for the client, investigation of carrier stability, giving correct advice related to insurance, and in today’s society, other duties as determined by the courts.

People who respect others are going to respect their right of privacy. Everyone in the organization must take responsibility for the privacy of others. Caring people are going to be guided by this value. The concept of “fairness” is something to build on when preparing ethics guidelines.

When considering ethical choices, some questions to ask are:

• Is it legal and ethical?

• Is it legal but unethical?

• Is it illegal?

• Does it involve a core ethical value?

• Who are the stakeholders?

• Do I have enough information to make the decision?

• Am I rationalizing to justify what I really want to do?

• Could I defend my actions before the board of directors, the media, or my family?

Sometimes, unethical acts are the result of “ethical lapses” by otherwise ethical people because of business pressures and time pressures. A CSR who believes that she doesn’t have enough time to verify the information presented on an application may rationalize that it’s okay to go ahead and submit it to the carrier since “they will ask if they need more information.” The duty owed by the agent to the company to present complete, accurate information is often breached in the rush to get to the next task.

Ethics and privacy

From an ethical viewpoint, we understand that everyone has some right to privacy. For example, the CSR who learns that one of his clients has had a DUI conviction is ethically bound not to share this information with others.

Agents are the first step in the information-gathering process. An agency has two initial exposures: the application and its own database. The extent of most safety precautions in an agent’s office is locking the file drawer. Information on computers is secured through passwords and other security devices. Portability is what everyone is trying to protect against. Outgoing information is much easier to steal.

Accuracy of information involves making sure incoming information is complete. In terms of incoming information, for example, the Josephson Institute says that between 25% and 33% of résumés have material misrepresentations.

Each situation is unique and there are no overriding principles or general business guidelines that will give you the answers in every case. Honesty is a guideline that can be used in ethics. However, there are “shades of honesty” not lying and complete openness. (Do I give information I “know” that isn’t “asked” on the application?)

It is easy to be ethical if it doesn’t cost you anything. The ethics of a new agent just starting and needing to sell to feed his family might be different from those of a more established agent.

Do as I say?

The entire character of a business is dependent upon its management. The CSR listens to the rhetoric but hears the actions. If a manager says we must use extreme care to keep our clients’ information private, but the CSR overhears the manager sharing private information with others inside or outside the office, the CSR is likely to find it easier to bend the rules and share with others also.

Walking the talk is critical. What values does management reward? Do they match what is said? All of us have an obligation to take corrective action if incorrect information is going out. If an organization sets unrealistic sales and profit goals, for example, the employees may get the message that it is okay to commit dishonest or unethical acts as long as the goals are met.

Managing the ethical risk

Sometimes a test of ethics occurs when you have to choose one right course of action against another right course of action. One example is truth and loyalty—two ethical qualities. Many CSRs have faced the dilemma of knowing a client outside the office and seeing that individual provide information that is not completely accurate to the insurance company. The ethical choice here is that you may feel a need for loyalty and privacy to the individual as well as a need to be loyal to the company by providing the accurate information.

Insurance companies require information, and they have the right to accurate information. Sharing information between companies should be restricted to those who have a need to know.

Everyone is dealing with the technology issues of e-mail and the Internet. With e-mail, it is easy to transfer information to numerous people at the same time. A CSR must realize that once information is transferred by e-mail, it is no longer private. Information is sometimes accidentally forwarded to others. Once sent, it cannot be retrieved. In any comprehensive office procedures policy, there should be a provision that alerts the employees to the fact there is no “expectation of privacy” when they use the company’s e-mail or Internet.

The Institute for Global Ethics says two trends, globalization and technology, are requiring us to rethink our ethics codes because the ethics codes of the 20th century are not going to get us through the 21st century. If companies and agents misuse information, they will get regulation and legislation whether they want it or not. It is important to be judicious in using the information. We do not own our information, but we are entitled to some protection. Information should not be used in an improper, discriminatory way or be disseminated in an unscrupulous, irrelevant, unfair way.

A study of the “Future Competitive Leader” identified four specific characteristics. First, the leader was a business thinker. Second, the leader was a market builder. Third, the leader was a change champion. Fourth the leader was an ethical role model.

As CSRs, we can apply these concepts to our own behavior to achieve ethical results.

1. Be a business thinker. Work ethically with your client base and this will encourage customer loyalty.

2. Be a market builder. Work ethically with your company partners (underwriters, adjusters, etc.), as this will foster bridges, not walls, to your successful retention of markets.

3. Be a change champion. Seek ways to improve the character of yourself and your organization.

4. Be an ethical role model. You can teach more by what others see in your actions and attitudes than in all the training materials that are available.

The author
Cleva Moore, CIC, CRM, CPCU, AIS, AU, APA, has worked in the insurance industry as a customer service representative, agent, and producer. Cleva is an adjunct professor of insurance and risk management at Missouri Southern State University and is a member of The National Alliance faculty teaching at the Dynamics of Service program. For more information on Dynamics of Service or the CISR program, call (800) 633-2165 or go to www.TheNationalAlliance.com.