ETHICS
DETERMINING WHO WE ARE
Much has been written on ethics in all professions. The legal profession and the medical profession continue to wrestle with some conflicting ideas still. For example, is it ethical to assist another person who wishes to commit suicide? We are lucky that our questions of ethical behavior in the insurance field are less complex although many of these legal and medical questions will be addressed, at some point, by the insurance industry since they do affect some parts of it.
Most of us are simply navigating through life trying to do the best that we can. Our "moral compass" has the ability to guide us past most of the risks we come in contact with if we are willing to look beyond ourselves. Our "moral compass" deals daily with personal outlook, principles, values, priorities and goals. It is the "voice" behind our daily choices.
In some respects, we do not entirely choose our moral compass. It is jointly built by our parents, teachers, friends, and coworkers. It is an accumulation not only of what they taught us, but also of what they failed to teach us. However, this is not a reason to remove ourselves of personal responsibility. At some point in our lives, we become totally responsible for our actions. Of course, many in our courts of law would like us to believe otherwise. To some degree, we are falling for this legal manipulation. The truth is, however, that each of us has free choice.
Greed seldom, if ever, has a place among ethics. Wall Street has often been targeted as a greedy, self-serving entity, especially in the 2016 presidential race. While it would not be fair or ethical to condemn everyone on Wall Street, there have certainly been strong examples of unethical behavior in the investing world.
Ethical issues in financial vehicles may affect everyone adversely when it is part of many people’s lives. Numerous people lost their homes, for example, in the housing scandal. Loans were made to people who clearly would fail, yet those making the loans did not care because the mortgages were a commodity that was bought and sold in the markets. These issues affect everyone because even if a particular person did not lose his or her home, they are consumers and consumer issues affect all of us.
People have always known that lender fraud existed. The FBI began warning the public that an epidemic of mortgage fraud existed as early as 2004. Of course, it existed prior to that too, but not in the high numbers we began to see then.
There were some inventive methods created to create mortgages; the goal was always to get as many mortgages on the books as possible. During this time the term NINJA loans came into use. It is an acronym for “No Income, No Job, No Assets, No Problem.” Clearly that is not a sound basis from which to issue a mortgage loan.
Borrowers were encouraged to borrow sums they could never hope to repay. The issuance of these loans involved numerous people from the loan originators to appraisers who inflated property values. On the surface this information might not seem to belong in an insurance education course, but actually it affected insurers too, because many insurers invested policyholder funds in what they thought were sound investments. Banks like Goldman Sachs packaged what was later referred to as “garbage securities” into collateralized debt obligations for hedge fund managers. These were sold to their own customers and allowed the hedge funds to bet against them. This is considered fraud.
One might believe that this fraud has been permanently and forever stopped, but that does not appear to be the case. Although not as wide spread today (at least as far as we know), the largest financial institutions continue to pay huge bonuses to top management for promoting questionable mortgage activity. Of course, there is no single cause for perhaps the greatest widespread fraud in history, unless we consider greed. Greed was the one factor that all who participated in the mortgage crisis had in common.
Insurers accept risk when they issue a policy on real estate. Mortgage holders require property owners to have a homeowner’s policy. Therefore, besides the element of investment, insurance companies become involved even when the borrower will not be able to pay their mortgages. In some cases, desperate homeowners make poor choices. They might be tempted to commit arson as a way out of their mortgage obligation or they might simply walk away. There is no easy answer. Even very moral and ethical people can disagree on moral issues. Some types of ethics tend to be universal, which means that they apply to all people in all countries. An example of a universal moral law is the Golden Rule (Always do unto others as you would have them do unto you).
A German philosopher who lived during the eighteenth century, Immanuel Kant, believed that a moral compass could be reduced to one universal law governing all morality. He called this law a categorical imperative. He stated it this way: "Act so that you can simultaneously will that the maxim of your action should become universal law." What he meant by this statement is that you should not do anything unless you would want anyone else in the same circumstances to do exactly the same thing. Immanuel Kant is saying, for example, that it must be wrong to lie because we would not want lying to be practiced universally. It must be wrong to misrepresent an insurance policy because we would not want such contracts to be universally misrepresented.
Some believe that "right is right, at all times and in all places" whereas others believe that moral truth is relative to culture, personal ideals and legal aspects. Even one's economic situation can have a bearing on their perception of what is ethical. For instance, if your child was hungry, it might seem acceptable to steal food. In fact, who would not steal food to feed their hungry children? Certainly, it is not ethical to allow a child, any child, to suffer. Which ethical standard is more important: not stealing or feeding your child? Using the Universal Moral Law aspect, we certainly would not wish everyone to steal universally, nor would we want children to be allowed to go hungry universally.
Individuals tend to feel strongly that their interpretation of "ethical" or "moral" is right and others are wrong. Yet, when it comes to ethical behavior, there certainly are areas that vary greatly with neither side being either totally right or wrong.
Many of our beliefs are tied to tradition. For example, Judeo-Christian biblical commitment to God and his laws are a matter of tradition. Many of our present day traditions evolved from the Greek culture that pressed for excellence, emphasizing cultivation of virtue and character. These two traditions overlap as does the Utilitarian tradition, which strives for the pursuit of happiness for the greatest number of people. In other words, the individual must consider the group needs above his own individual needs. Many of our cultures, past and present, play a part in forming our traditions. Even the Eastern philosophy of Zen and Zoga have overlapped into the other forms. Our own Native-Americans (Indians) have contributed a great deal to our present set of ethics, especially where the environment is concerned. The Native-American culture pressed for environmental ethics through teaching respect and dignity for the entire earth. One might say that our Native-Americans were generations ahead of the general population when it came to understanding the environmental necessities.
Despite all the traditional differences in ethical conduct, all moral traditions examine the same basic questions:
What is the purpose of our lives?
How do we determine the moral thing to do?
Is it possible to be ethical or moral and still meet the financial goals we have set for ourselves and our families?
We are not able to provide the answers to those questions. Nor can anyone else provide you with those answers. Your moral compass must direct you to the ultimate answers. Aristotle suggested that moral good came from acting in moderation, never in the extreme. The Italian philosopher, Saint Thomas Aquinas, taught that moral good can only be achieved with behavior that is motivated by love. How you define your own moral course will depend upon the quality of your ethical compass.
How you define your own ethical conduct (what is ethical?) is perhaps the most important decision you will ever make. It will determine the choices you make throughout your entire lifetime. It will affect whom you marry, whom you choose for friends and coworkers, how you earn your living and how you raise your children. It will, to some degree, also determine how others think and act towards you. Since it does affect so many areas of your life, your ethical behavior will, in the end, also determine your state of happiness.
As a child, such decisions seem relatively simple. If it hurts, don't do it. If it feels good, it must be OK. As we mature, our lives become much more complicated. Every day of your life, your choices are endless. Some you make without conscience effort. Others require great pondering.
Some have argued that the end justifies the means. It is the Robin Hood approach of robbing from the rich to give to the poor. In fact, in a matter of speaking that is exactly what Marilyn Louise Harrell did. As a private escrow agent for the federal government's Department of Housing and Urban Development, she diverted funds (illegally) from H.U.D. to feed, clothe, and shelter the poor in the suburbs of Washington, D.C. While there is little doubt that her misguidance of $5.5-million in H.U.D. funds was to help others, not herself, can such deception ever be ethical? If you were the "rich", would you appreciate being robbed, even if it were to aid the poor?
An insurance agent used this story as an illustration for financial planning:
"If you were planning a trip to Hawaii it would be important to determine how you planned to travel there from the mainland. Simply jumping in your car and heading down the road would not be very prudent. When you hit the ocean, you had better have flood-wheel drive!
It is never prudent to go blindly to your destination. Rather, it is important to plan the roads you will travel and thoughtfully choose the vehicle you will ride in."
We bring up this financial planning advice because it ties into another moral or ethical thought: How you can get there determines where you go.
This moral compass determines how we obtain what we desire. Indian leader, Mahatma Gandhi, desperately wanted India's freedom from England. However, he also strongly believed that the only way to reach the goal of freedom was through nonviolence. Explained Gandhi: "I would not kill for freedom, but I am willing to die for it."
Many of us are more concerned with how we live our lives than we are about how we can acquire material goods. In addition, we have heard many stories of poor parents who made a point of impressing education and personal dignity on their children above all else. We are also well aware that these values are not always rewarded by society.
Viktor Frankl, author of Man's Search for Meaning, put it another way when he talked about aiming for success: "The more you aim at it and make it a target, the more you are going to miss it. For success, like happiness, cannot be pursued; it must ensue, and it only does so as the unintended side-effect of one's personal dedication to a cause greater than oneself or as the by-product of one's surrender to a person other than oneself."
Another philosophy often heard expressed is if it's legal, it must be moral. Again, we only have to look at our country's past history to know that this is not necessarily true. The fact that slavery was, in some places, legal did not make it right. While laws are intended to have a strong connection to morality, we know that this is not always the case.
It is certainly necessary to teach our children to respect the law. It is necessary to not only respect the law, but in most cases, to follow it as well. Otherwise, our country could not prosper. However, not every law reflects what is moral. In the past, laws have allowed slavery, segregation, sexism and other injustices. As Martin Luther King, Jr. said, "Any law that uplifts human personality is just. Any law that degrades human personality is unjust."
We have often heard that "doing good things" will make us feel good ourselves. While this is true, feeling good can also lead to selfishness. After all, it feels good to always get your own way, too. Behaving ethically has to go deeper than merely feeling good. There has to be a commitment to that which is simply the right thing to do.
Moral inconsistency does appear to be a part of our human nature. Even good people will be tempted when in the right (or should we say wrong?) situation. When you are buying an article and the clerk charges you too little, when credit is given where credit is not due or when you would gain a sale by allowing a false assumption to remain with the consumer, temptation has visited. How you react to that temptation says a great deal about who you are.
It is possible to buy many things in life, but it is not possible to buy how other people perceive you. Certainly, we may be less likely to tell the rich man what we actually think, but that lack of assertiveness does not change what we think of him. You may tell the truth 99 times, but that one time that you lied will always remain with the person you lied to. Most people feel that treating others ethically is a form of respect, not only for them, but for ourselves as well.
Ethics may sometimes require tough choices. Sticking to one's ethical convictions often means traveling a rougher road. Choices between right and wrong are not always easy to identify. Individuals must make what they perceive to be the best choice.
We are often told to follow our conscience, yet studies show that we often do not do so. While nearly everyone will state that cheating is wrong, researchers Edward Diener and Mark Wollbom found that 75 percent of the students in college would cheat when the opportunity presented itself. This is true outside of college as well. In a National Opinion Research Survey of adult Americans, 75 percent said stealing was wrong, although most of them admitted they would steal anyway.
There are many reasons why people do not follow their conscience. Perhaps the most obvious reason is a lack of personal control. When it seems unlikely that any punishment or embarrassment will result, many people simply do not have enough self discipline to do what they know is right. Many people ignore their consciences because of outside influences such as loyalty, friendship and the desire to fit in with the group. That is why it can be very important for agents to carefully consider the agency they work with.
It should be pointed out that a moral dilemma is a struggle to determine what is right, while a conflict occurs when you know what is right, but you do not particularly wish to do the right thing. For example, among friends, relatives or colleagues it can be difficult to take an unpopular stand even if you feel strongly on the issue. Interestingly, studies have shown that individuals are more likely to take a stand on political issues than on morality issues. Perhaps it is more socially acceptable to disagree on politics than it is on moral conflicts. Ethnic jokes are often told even when feelings might be hurt as a result. If a colleague is telling an ethnic joke that you feel is wrong, are you strong enough to voice your feelings? Chances are, if you are like many people, you may avoid the joke-teller, but you are not likely to voice your opinion unless others in the group first object.
Lack of involvement has become a common complaint. Bystanders have no moral commitment to risk their lives to rescue someone else, especially if it is a stranger. A study was conducted to see what type of person would help a stranger. The most striking thing to come out of the study had to do with the "safety in numbers" concept. You are more likely to receive help from a stranger if that stranger is the only person or one of only a few around. The larger the crowd, the less likely you are to receive help from a stranger. It appeared that people were afraid to step out and be noticed by others who might judge them.
Fear and moral conflict do often tend to paralyze people into doing nothing. In addition, most people try to avoid anything that might embarrass them or make them look weak or unattractive. Perhaps if we better understand why good people can stand by and do nothing, we can then break out of our paralysis and forcefully act. It is easy to say that we would certainly do the right and moral thing if the situation presented itself, but the truth is that most people stay with the group and fear acting individually.
People who step forward and act possess moral certainty. They strongly believe in their views and act upon those views, even when it is not popular. It does not necessarily mean that they are right in their views, but they are certain personally that their views are correct. Two separate studies have shown that a strict religious upbringing substantially contributes to a person's moral certainty. This may be because there is no ambiguity about what is right or wrong. There are straightforward definitions of right and wrong; good and bad. Another study revealed that when a person is presented with multiple choices and ideas of what is right or wrong, the more likely that person is to be indecisive. Apparently, it is more difficult to narrow down multiple choices of what is right or wrong.
We could continue to study the issues of morality, which is simply acting ethically, indefinitely. We could cloud issues with multiple views and supporting facts. The topic of ethics is a complicated and complex issue. Basically, however, ethics is simply a matter of doing what we perceive to be right. Acting ethically is not a difficult thing, but it can be a struggle. People do not act ethically for multiple reasons ranging from simple laziness to indifference to ignorance.
Too often the simple question of: "What's in it for me?" comes up. The answer: "It will make you feel good" is seldom adequate for such people. In fact, ethical actions do simply make sense. As long as we need other people for aid, comfort and ordinary necessities, it is simply practical to treat each other ethically. While there are always exceptions, in general, people tend to return the same kind of treatment that they receive. Treating others in the manner you wish to be treated simply means that you will receive better treatment yourself.
Certainly, ethical behavior is practical from the legal standpoint. To behave unethically means that you may find yourself in a legal dilemma. Unethical behavior may also mean legal action against an insurance agent, the represented agency and the insurance company.
A twelve-year-old from Ohio wrote, "If everyone did their share, no one would have to save the entire world." This statement makes an amazing amount of sense. If each of us acts responsibly, everyone benefits. This is especially true in the insurance world.
We would all like to be able to take credit for some noble act such as saving a life. In truth, few of us will be involved in anything that dramatic. However, every time we tell the truth (when concealment would benefit us financially), every time we are honest (when dishonesty would be easier or more comfortable), every time we refrain from hurting another (possibly another agent), or every time we take a moral or ethical stand that is possibly unpopular, we are noble. Collectively, small actions add up to big differences in our communities, in our government, and in our personal lives.
For hundreds of years’ philosophers have talked about ethics. All of our lives, we have heard others talk of ethical behavior. This is not new information, although some of the concepts or thoughts may be new to the individual who has not studied them. Family members, religious teachers, and various educators have expressed the need for morality in our country and universally. Ethics give us simple principles by which to live peacefully.
There are no clear or easy answers to many of the moral dilemmas in our lives. Most of the ethical choices we have are not complicated, however. We, as insurance agents, know what is legal and what is not. We, as insurance agents, know if we have concealed necessary information from the consumers (our clients). We, as insurance agents, know if we have lied or been truthful. Each of us has personal shortcomings of some type, but ethical behavior is something that we do clearly have control over. With free choice comes responsibility. This course is not attempting to give you guiding answers, but it is attempting to make you think a little more often about what you do.
First of all, each of us must, as the saying goes, Wake Up and Smell The Coffee. We must make a commitment to ethical behavior. Simply stating our desire to be ethical is not enough. We must make a commitment to acting ethically immediately. If this means getting additional education (being competent is part of your ethical responsibility), if it means speaking out, if it means changing the firm we work for, then that is what our commitment must include. Remember also that there are times to be tolerant of those we disagree with and times to be intolerant. Kindness is always a part of ethical behavior. Kindness sometimes means tolerance.
We must, as human beings, think before we act. Rash statements or actions can get us into trouble both legally and morally. You will make your best ethical decisions if you are informed. Again, that may mean additional education or it may simply mean a moment to reflect on the facts at hand.
Being ethical means simply doing the right thing. It may not be the easiest thing. You will have a "gut" feeling for what is right in many circumstances. Each day brings multiple opportunities for behaving ethically or unethically. Often the choices are clouded by temptations to better yourself at someone else's expense. This means overcoming greed, laziness, indifference, temptation and perhaps even fear. We all will come face to face with temptations. The truly committed ethical or moral person will have personal convictions by which they live. These convictions didn't happen by accident. They were convictions that were fully adopted and forcefully abided by.
It is easy to be moral and ethical when it makes us look good or noble. It is easy to behave ethically when others will be observing us. The difficult part comes when there will be no recognition for our convictions, when we may even be unpopular or have to face another who is acting illegally or unethically. Doctor Martin Luther King, Jr. said a person's worth is "not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy."
Ethical standards also require that you be kind and loving to yourself. When setting up your convictions, do not also set yourself up as better than others. Humility is also a virtue worth pursuing. Realize that you will not be perfect. There will be times when you stumble. Do not let that be a reason to abandon your principles.
In the end, who you are will be established by your convictions, your principles, your actions and your words. It will not matter how many material things you have, what you look like or who you know. You will be defined by what you do and what you say. who you are is the only thing that no one can take away from you. It is your final statement about yourself.
We had hoped to end this course on some grand statement that you would carry with you throughout your lifetime. In the process of researching this material, however, it became evident that each person will come to their own grand conclusions. For in the end, we each make our own choices and our own directions. We choose our own mishaps, our own miseries, our own troubles. We also choose our own principles, our own victories, our own happiness, and our own ending statement about ourselves.
Perhaps the greatest challenge is not philosophical knowledge, but rather moral understanding. The challenge is not your financial goal, but rather your moral living. The financial goal will come on its own.
End of Chapter 21
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