Joshua is insured with InsureCo through its agent, Olivia. He has an automobile and a commercial property policy with InsureCo. Joshua's son Harry, who lives at home, is driving the insured vehicle. He loses control and hits a guardrail causing $4,500 damage to the vehicle. Joshua asks Olivia for advice. Olivia knows that InsureCo's guidelines state that one at-fault accident, whether a claim is paid or not, results in an automatic premium increase of twenty-five percent. If Joshua pays for the damage himself the insurer may never know about the accident.

Olivia's decision is to advise InsureCo of the accident. Which one of the following decision-making tools is Olivia most likely using when she makes her decision?

Select one:

A. People-based decision making

B. Ethics-based decision making

C. Rules-based decision making

D. Situation-based decision making

Life insurance producer Mack is aware that his company has replaced an inferior life insurance product with a superior policy. The sales commission on the new product is lower than the commission on the policy it is replacing. He is therefore eager to sell more of the inferior products while they are available due to the higher commission. He is aware the new product is better for the insured and is faced with an ethical dilemma. Mack convinces himself that he should market the old product as being unique and one that is the customer's last chance to have the opportunity to purchase the product. Although his resolution may be wrong, Mack's decision, from an ethical decision-making standpoint, is

Select one:

A. Situation-based.

B. Rules-based.

C. People-based.

D. Function-based.

Rhonda and her sister Karen both work for Insurance Company in a production-oriented environment. Rhonda is quite capable of issuing 20 or more auto applications a day while Karen struggles to complete fewer than a dozen most days. Twice a year, employees must prove competency, and underwriting reviews are conducted to ensure compliance to standards of at least 15 applications per day. Therefore, twice a year, Rhonda goes to Karen's desk on her lunch hour for two weeks during the review period and issues applications for Karen to ensure that she meets the company standards. Rhonda recently took an ethics course and has begun to wonder whether this arrangement is ethical. Which one of the following statements is true?

Select one:

A. If Rhonda cannot find an ethical canon that specifically addresses her issue, then she can be assured that her conduct is ethical.

B. If Rhonda applies rule-based decision making, then she will consider the situation from Karen's perspective.

C. If Rhonda applies situation-based decision making, then she may realize that in the long-run her employer suffers because its review process is being compromised.

D. If Rhonda applies people-based decision making, then she will have to determine whether any of her supervisors created a rule prohibiting her conduct.

Underwriting supervisor Kristine has learned that one of her employees is not only breaking the rules by looking at her own insurance policies but she is reviewing the policies of her co-workers and telling them how to "get around the system" to reduce their premiums. Kristine has reviewed the situation and considered the ethical issues and is at the stage she must make a decision. Her decision is almost immediate but now she must monitor the effects of her decision and evaluate the effectiveness of anticipated outcomes. By analyzing the positive and negative results of her decision, Kristine can

Select one:

A. Improve the decision-making process for future ethical dilemmas.

B. Completely eliminate future unethical behavior on the part of the employees involved in these activities.

C. Enhance the reputation of the organization and protect its stakeholders.

D. Change the company policy to remove any ambiguity.

When faced with an ethical dilemma, an insurance professional can often look to the organization's code of ethics as a guide.Which one of the following features of the code of ethics can be particularly helpful in the decision-making process?

Select one:

A. The shared responsibility of all stakeholders

B. The incorporation of people-based decision making

C. The use of examples of situations and possible resolutions

D. The published documentation of the organization's principles