| Ethics: Professional Fundamentals | |||
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Maintaining Confidentiality Client's Confidentiality Rights Professional producers will not disclose any confidential client information without the specific consent of the client unless it is in response to proper legal process to defend against charges of wrongdoing, or in connection with a civil dispute between themselves and their client. Clients have a right to expect a high level of privacy. Confidential information, discussions, and actions are part of every financial plan. Confidentiality refers to those things spoken, written, acted on, etc. in confidence, such as a secret or a confidential remark. It indicates confidence or intimacy, such as imparting private matters or a confidential tone of voice. It is having another's confidence as well as being entrusted with secrets or private affairs like a confidential secretary. An agent is bound to act in utmost good faith in the areas of handling the consumers' financial instruments (including cash) as well as their personal and medical information. The agent will occasionally be privileged to certain confidential financial and medical information regarding their clients. It is important that the agent treat this information with respect and confidentiality. If an adverse underwriting decision is made, often the agent will have to convey this information to the client. The agent should be aware of the process the consumer can use to determine the source and validity of the information on which the decision was based. Attorneys, physicians, psychiatrists, counselors, and countless other professionals have varying legal and professional responsibilities and protections for keeping their clients' and patients' information confidential. We also, as financial professionals, have a responsibility to keep any and all information that is provided to us by our clients private and confidential. This is the case whether or not divulging or sharing information actually causes harm to the client. Confidentiality with the Agent's Employer This confidentiality also extends to the agent's employers, as well. Information about the inner-workings, financial data, and information about employees or principals that is not necessary for disclosing to the agent's clients is considered in this confidentiality area. Financial professionals many times are partners or principals of financial service organizations and firms. The confidentiality expectations apply in these situations, as well. In fact, an agent should honor this while they are actively involved with their firm as well as afterwards, should they separate their employment or officer/owner role in the future. Information Sharing What happens when a situation arises where an agent is in a situation where he or she needs to share information with others or another firm in order to implement a financial transaction on behalf of the client? In those cases, the agent assumes that the client has given his or her permission to share the amount of information required to effectively follow through on the client situation to the client's advantage. Generally those firms providing transactions or services for the agent's client are also sworn to the client's confidentiality, as well. The key here is the client will have requested that of the agent and realize that the agent would not be able to provide them with the action warranted on their behalf without the ability to supply appropriate and pertinent information required by those needed to square away their requests and strategies. Compliance with the Legal Process That brings up another scenario that might require the sharing of a client's information. There may be, from time to time, some legal requirements or a legal process that requires an agent to provide information that they have or know about the client. In these situations an agent is required to comply with any legal process requirements and is not in breach of the confidentiality principle. Don't forget that in cases where the agent runs into a situation (which happens occasionally) when a civil dispute arises between agent and client, the confidentiality protection is altered. If it proceeds to a civil dispute level, the agent may have to defend him or herself against wrongdoing. In such a case, the information will be the evidence that may have to be presented to illustrate and provide answers to accusations. It is obviously a situation that no one anticipates, expects, or ever wants to have happen. But these situations do happen and the confidentiality issue comes into play in them. Safeguarding client information is one of the most significant aspects that enable agents and their clients to have a relationship based on trust and confidence. |
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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.
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