acting contrary to accepted social mores.
To which kind of ethics should an ad-
juster ascribe? Some rules are absolutes
and must be followed. Those rules are
often incorporated in laws such as the
Unfair Claims Settlement Practices Act
cited in most state insurance codes. It is,
for example, a violation to commit with
such frequency as to constitute a “general
business practice … not attempt[ing]… in
good faith to effectuate prompt, fair, and
equitable settlement of claims submitted
in which liability has become reasonably
The Code implies absolutism, but the
rule is hardly “absolute” in the way it must
be followed. How frequent is “frequent”?
What is meant by “attempt”? What is
“faith”? We cannot act in “good” faith with-
out understanding what “faith” means un-
der the law. How fast is “prompt”? What is
meant by “fair and equitable”? Equitable
means even; a settlement must be “even”
between both the insured and the insurer.
When is liability “reasonably clear,” and
what type of “liability” is meant? What is
the ethical position in such cases?
For adjusters, complying with an insurance code full of ambiguous terminology,
is difficult. Underwriters who compose the
wording of insurance policies have the same
difficulty; courts frequently find policy language ambiguous, and any ambiguity in
a contract will be ruled against the party
that wrote it. It was the 16th century case of
Gybbons v. Martin, et al, in London’s Chancellery Court that first applied this rule.
The case involved the definition of “a year.”
When our words and actions have integrity, the wholeness of coverage, liability and
damages, we stand a better chance of avoiding disputes and staying out of litigation.
Ken Brownlee, CPCU, is a former adjuster
and risk manager based in Atlanta, Ga. He
now authors and edits claims-adjusting
For Adjuster Ethics, The “I’s” Have It!
In his Introduction to Winning by the Rules, Ethics and Success in the Insur- ance Profession, the Iconoclast identi- fies a number of words, each beginning
with the letter “I,” that are often associated
with ethics: Integrity, (implying Incorruptibility), Information (which requires
Intelligence), Initiative, Ingenuity, Imagination, Individualism, and for those involved with insurance claims or coverage,
While these words might at first seem
obvious, when closely examined, one
finds that each is unique, requiring effort
and study; that is mandatory.
The text explains ethics in many ways.
Some, such as Peter Drucker, suggested
that there is but one standard applicable
to all. Thus, the law is incorruptible and
must be ethically followed in every situation. This is absolute ethics, and many adhere to that principle. It is the Ten Commandments, the “Thou shalt not…” rules,
perhaps akin to Sharia Law in Islamic
countries. The rules become inviolate; but
“law” is the minimum standard of behavior; ethics is the maximum standard.
There is another form of ethics: situational ethics. Aristotle suggested that ethics involved “conflicts in morality.” In the
21st century, many ethical decisions can
only be made based on the situation and
consideration of all optional responses.
Can one response be more “ethical” than
another? One must also consider the consequences of each decision. Most of us
make such situational decisions daily.
Integrity – Wholeness
We hear much about a person’s “integrity,”
but what does that mean? It is a term that
comes from mathematics. An “integer” is
a whole number. Two plus two must equal
four. When one tries to make it equal
something else, the result lacks integrity.
A person of integrity will act and respond in the same way in almost all situations. He or she is no different at work
than at home. If Joe is the model employee, helpful, accurate and energetic at
work, but at home becomes a drunken
slob, yelling at his wife and children without any thoughtfulness, he lacks integrity.
If Joe cheats on his income tax, he’ll eventually cheat on the boss.
Some would call it a lack of conscience;
psychologically it is a form of sociopathic
behavior. Joe may give lip service to honesty, but this is like mumbling prayers in
a worship service and then going out and
Editor’s Note: This is the first article in a six-part series on adjuster ethics.