Ethics: Responsibilities, Obligations, and Codes | ||
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Insurance Marketplace Standards Association (IMSA) Role of IMSA IMSA stands for Insurance Marketplace Standards Association, but for the millions of Americans who buy insurance products from IMSA member companies it spells something more: confidence. IMSA is a voluntary membership organization leading the insurance industry in promoting high ethical standards in the sale of individual life insurance, long-term care insurance and annuity products. Through its Principles and Code of Ethical Market Conduct, IMSA encourages its member companies to develop and implement policies and procedures to promote sound market practices. Insurers who have earned IMSA membership have been subject to rigorous assessments to meet the principles and codes of IMSA. Defining IMSA Insurance Marketplace Standards Association (IMSA) is an independent, non-profit organization created in 1996 to promote high ethical standards in the marketing, selling, and servicing of individually sold life insurance, annuities, and long-term care insurance. IMSA's rigorous market-conduct standards for the industry ensure that member companies, their employees, and their agents maintain financial accountability and function ethically and in the best interest of their clients. IMSA represents more than 200 of the nation's top insurance companies, representing over half of the life insurance policies written in the United States. The IMSA seal is considered a mark of excellence within the insurance industry and a guidepost for the consumer. The IMSA Principles IMSA Mission Statement is "To strengthen trust and confidence in the life insurance industry by requiring member companies to demonstrate commitment to high, ethical marketplace standards." The IMSA code is a set of principles which seeks to foster the following: Principle One Principle One involves conducting business according to high standards of honesty and fairness and to render that service to its customers who, in the same circumstances, it would apply to or demand for itself. To conduct its business according to high standards of honesty and fairness, an insurer would implement policies and procedures designed to provide reasonable assurance of that happening. Principle Two Principle Two is to provide competent and customer-focused sales and service. There seems to be a consensus on the value of having a central source for information about distributors' prior history, including disciplinary involvement. Such systems are becoming available. The NAIC Producer Database and the NASD Central Registration Depository system are examples of this type of system. Whether through these systems or others, companies should now utilize some independent source for checking on the history of distributors before entering into a relationship with them and such a source could be helpful in making decisions about continuing existing relationships. To provide for competent sales and service of covered products, a company will develop policies and procedures designed to provide reasonable assurance of this. Principle Three Principle Three refers to the engagement in active and fair competition. Focus on fair competition in the marketplace provides an opportunity to identify certain negative practices that can be targeted for attention, such as inappropriate replacement and competitor "bashing." A company's undertaking to engage in active and fair competition does not necessarily mean that such member is expected to compete in all covered product market segments or with all possible products. A company must be free to compete in limited segments or with limited products according to its own ability to serve its targeted customers and according to its own marketing plans and goals, both financially and in the marketplace. Companies are committed to competition as the most effective and efficient means of providing products and services to customers. Competition is also the most efficient regulator of activities. To maintain and enhance competition in the marketplace for covered products, a company will develop policies and procedures designed to provide reasonable assurance of this. Principle Four Principle Four provides advertising and sales materials that are clear as to purpose and honest and fair as to content. Current state laws and regulations on advertising, unfair trade practices, and sales illustrations provide a fairly detailed set of public policy requirements for advertising and sales materials. Companies should acknowledge and incorporate those ideas into their development of advertising and sales materials for covered products. To provide advertising and sales materials that are clear as to purpose and honest and fair as to content, a company will develop policies and procedures designed to provide reasonable assurance of this. Principle Five Principle Five provides for fair and expeditious handling of customer complaints and disputes. The appropriate handling of customer complaints and disputes related to sales and marketing of covered products is an important element of ethical market conduct. State laws and regulations require certain processes. Companies are also encouraged, but not required, by the Principles and Code of Ethical Market Conduct to consider additional methods of resolving complaints and disputes related to sales and marketing practices, such as Alternative Dispute Resolution or other alternatives designed to deal with disputes without requiring civil litigation. To resolve any complaints and disputes that may arise concerning market conduct, a company will develop policies and procedures designed to provide reasonable assurance of their creation and maintenance of a system of supervision and review. Principle Six Principle Six is one of the key components of the Code to maintain a system of supervision and review that is reasonably designed to achieve compliance with these Principles of Ethical Market Conduct. It addresses the maintenance of an effective system of compliance supervision. A critical element in the establishment of an effective market conduct compliance program is management support. Support from the top of an organization is a cornerstone in creating an environment within a company where compliance is an important management objective. To maintain a system of supervision and review that is reasonably designed to achieve compliance with these Principles and Code of Ethical Market Conduct, a company will develop policies and procedures designed to provide reasonable assurance of this. Companies are required to supervise their sales and marketing activities. Responsibility for supervising sales and marketing activities may be assigned to a variety of individuals within the company or delegated to independent intermediaries. However, ultimate responsibility to reasonably assure whether supervision has taken place must be borne by the company. |
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Not only are policy forms, clauses, rules and court decisions constantly changing, but forms vary from company to company and state to state. This material is intended as a general guideline and might not apply to a specific situation. The authors, LunchTimeCE, Inc., CEfreedom, and InsuranceEthics101.com, and any organization for whom this course is administered will have neither liability nor responsibility to any person or entity with respect to any loss or damage alleged to be caused directly or indirectly as a result of information contained in this course. |