Which one of the following best distinguishes between morals and ethics?

Select one:

A. Ethics provides guidance when a law is not applicable.

B. Ethical situations involve distinction between right and wrong.

C. Morals may be a set of standards held by a group.

D. Morals provide a codified set of acceptable behavior.

Ethics are best distinguished from morals and laws because

Select one:

A. Ethical decisions require distinctions between laws and codes of behavior.

B. Ethical decisions require distinctions between values and laws.

C. Ethical decisions often require decisions among multiple correct responses.

D. Ethical decisions require decisions between right and wrong.

Which one of the following best describes business ethics?

Select one:

A. Business ethics are, in reality, applied ethics.

B. Business ethics are applied legal obligations.

C. Business ethics are rooted in the profit motive.

D. Business ethics primarily concern decisions of right versus wrong.

Professional associations and societies are

Select one:

A. Effective in setting ethical standards within their specialties.

B. Most helpful when the groups include many different job types.

C. Most effective when organized at the national level.

D. Relatively expensive at the local level.

To be considered a professional,

Select one:

A. An insurance practitioner need not understand the implications of risk and its effect on individuals and society.

B. An insurance practitioner can rely on experience to provide valuable insight about the real world, and need not obtain any other form of continuing education.

C. An insurance practitioner must act with integrity, be honest and trustworthy, have a sense of equity and fairness, and accept personal accountability.

D. An insurance professional must be altruistic, which means focusing on his or her employer's needs.

A professional needs to exhibit which one of the following in his or her conduct?

Select one:

A. Physical use of skills to solve problems

B. Power of intellect to solve problems

C. Extraordinarily high intelligence quotient (IQ)

D. Athletic ability to solve problems

Which one of the following statements is correct?

Select one:

A. The financial services sector is not regulated in any way by the United States Department of Homeland Security.

B. Fiduciary duties arising from statutory rules and regulations, and court rulings and interpretations, require insurance professionals to act with the utmost good faith in all dealings.

C. Economic activity in a state, past catastrophic occurrences, and the state's basis of law do not impact its insurance regulatory requirements.

D. Current financial services regulation prohibits banks from acquiring or operating insurance agencies.

Having employees with high ethical standards allows an organization to

Select one:

A. Increase expenses for employee benefits.

B. Focus on its core business goals.

C. Focus on short-term revenue.

D. Avoid purchasing directors and officers (D&O) liability insurance.

The activity that best reflects the social responsibility aspect of ethical behavior is

Select one:

A. Establishing rate structures that encourage loss prevention.

B. Supporting legislation that would increase insurer profitability.

C. Offering insurance to a client because it is required by law.

D. Contacting claimants within three months of a notice of claim.

Bernice is a claim adjuster with Insurance Company (IC). She has been assigned a liability claim against IC's policyholder, Garth. The claimant, Calvin, alleges that while at a party hosted by Garth, he became uncharacteristically intoxicated due to the strength of the drinks Garth was mixing and serving. As a result of his intoxication, he fell down the stairs at Garth's house, breaking his back. The injury has left Calvin paraplegic. In Bernice's opinion, Garth is fully liable under state law for Calvin's disability. Which one of the following statements best describes Bernice's responsibilities in this situation?

Select one:

A. She should consider and evaluate Calvin's pain and suffering, and make a fair offer in settlement of the loss.

B. She should discuss the claim with Garth and determine how he would like to see it handled in terms of settling or going to court.

C. She should pay Calvin enough to prevent him from filing suit and causing the insurer to incur extensive legal expenses.

D. She should consider the case from the perspective of IC, which wants the claim resolved for the least amount possible.

Demonstrating high ethical standards by explaining coverage and the duties of the policyholder is best carried out by

Select one:

A. A premium auditor.

B. A broker.

C. An underwriter.

D. A loss control specialist.

An insurance professional who focuses on the goals of society instead of his or her own goals is best serving the needs of which one of the following groups?

Select one:

A. Policyholders

B. Insurers

C. Government

D. The public

Anil is a commercial insurance producer who specializes in large, complex accounts. Anil is approached by the risk manager from Altor Systems, a company that specializes in developing special-purpose computer operating systems for use in such things as communications satellites, space vehicles, and military applications. Because of the nature of its business, Altor often finds it difficult to obtain insurance coverage, much less to obtain it at a cost the company sees as reasonable. Based on his experience, Anil is aware of two companies that might provide coverage for Altor. One, licensed in the client's home state, has very stringent underwriting guidelines and relatively high premiums. The second is a nonadmitted insurer, not licensed in the client's home state. This second insurer has much more flexible underwriting guidelines, and Anil is certain that the premiums charged would be much lower, as would be the commission Anil would earn on the account. After examining stakeholders, and motivations, which one of the following should be Anil's next course of action?

Select one:

A. To recommend that his client deal with the non-admitted insurer

B. To examine his own feelings about the case

C. To consider how his colleagues might handle the situation

D. To examine any laws, regulations, and guidelines governing the situation

Charles is a loss control representative with ABC Insurance Company. He has been with the company for eighteen years and is experienced and knowledgeable. Charles is also very involved in a number of activities outside of work, and is well thought of by the groups in which he is involved. He is active in his church's outreach program, he is a Scout leader, and he coaches softball in the summer and hockey in the winter. Charles knows that his supervisor is due to retire in the next year or two and he is hoping to be able to take over the position. He has had several frank discussions with his supervisor about this. His supervisor has been supportive but has also pointed out that the job would require him to work long hours and to take work home with him as well. Charles would need to give up many of his extracurricular activities in order to keep up with the demands of the job. This poses an ethical dilemma for Charles. Which one of the following types of ethical conflicts does this situation most clearly represent?

Select one:

A. Truth versus loyalty

B. Long-term versus short-term

C. Individual versus community

D. Justice versus mercy

Daniel is in the process of resolving an ethical dilemma. He believes he has identified all stakeholders in the situation. Daniel's next step in the process is best characterized by

Select one:

A. Determining who is responsible for resolving the dilemma.

B. Notifying the stakeholders of the situation.

C. Identifying the stakeholder most affected by the dilemma.

D. Gathering accurate information on the stakeholders.

Elmer is a commercial underwriter at ABC Insurance Company. Elmer and one of his co-workers, Jeff, play golf together regularly at the local public course. One weekend, Jeff suggests that instead they play at an expensive private club. He explains to Elmer that the owner of a new commercial account Jeff recently wrote gave Jeff a membership to the club. The situation makes Elmer uncomfortable because he knows that ABC has a strict policy about not accepting gifts from policyholders. Elmer has an ethical dilemma and is torn about whether to inform his employer about the gift or not. Which one of the following types of ethical conflicts does this situation most clearly represent?

Select one:

A. Truth versus loyalty

B. Individual versus community

C. Long-term versus short-term

D. Justice versus mercy

Laura is an internal auditor for an insurance company. She has uncovered proof of an agency receiving commissions and other benefits in excess of those normally allowed. Laura recognizes that she is presented with an ethical dilemma and decides that she must first identify stakeholders. Which one of the following statements regarding her situation is true?

Select one:

A. She must not only identify stakeholders but also their rights.

B. Only those who participated in unethical activities can be stakeholders.

C. The agency is not a stakeholder because its actions are the root of the problem.

D. The insurer will not be a stakeholder unless there is proof that the insurer had an unearned benefit.

Erin is an insurance producer dealing with a renewal of her largest and most important client. This client was responsible for bringing Erin into the insurance business and for her personal and financial success. The client tells her that he is very close to purchasing another company that would have troublesome liability exposures. He asks Erin not to reveal any information at this time. Erin knows that after renewal, if the client closes the purchase, insurers will have to automatically cover the new liability exposures for a period of time. This ethical dilemma is best identified as

Select one:

A. Justice versus mercy.

B. Long-term versus short-term.

C. Truth versus loyalty.

D. Individual versus community.

Joseph is struggling with an ethical dilemma. He does not have a firm handle on what he should do. During a recent continuing education class, Joseph was introduced to the concepts of a systematic approach to resolving ethical dilemmas. Following the process, he has identified the stakeholders and the motivations of those involved. To complete the systematic approach and come to a conclusion Joseph should now

Select one:

A. Separate facts from feelings.

B. Consider only objective information.

C. Identify the relevant ethical issues.

D. Identify the rights of the stakeholders.

Harold is a commercial lines underwriting manager with Insurance Company (IC). Selina, a top-notch member of Harold's underwriting unit, is married to Martin, an insurance producer at a brokerage with which IC has an agency agreement. During an underwriting audit, IC's head office audit team notices that Selina has been consistently underpricing accounts for the brokerage at which Martin works. The underpricing has not had an adverse affect on either the brokerage's or IC's loss ratio. The audit team brings the matter to Harold's attention and asks that he resolve it as he sees fit. This presents an ethical dilemma for Harold. He is concerned about the apparent favoritism Selina is showing, but he feels she is a skilled underwriter and so far the loss ratios have not suffered. Which one of the following best identifies one of the principal stakeholders or group of stakeholders in this dilemma?

Select one:

A. The underwriters in units other than Harold's

B. The human resources department of IC

C. The members of the head office audit team

D. The other brokerages that Selina underwrites

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

B. Change the company policy to remove any ambiguity.

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

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

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.

Erma travels on company business frequently. Her travel expenses are paid by the company but she must fill out an expense sheet to be reimbursed for her meals. Knowing that receipts are not required for meals under $25, Erma always submits expenses for three expensive meals when traveling even though she often stays at facilities that provide free breakfasts and inexpensive lunches. This falsification and padding of expenses is an example of wrongly applied

Select one:

A. Altruism-based ethical decision making.

B. Situation-based ethical decision making.

C. Rules-based ethical decision making.

D. Function-based ethical decision making.

Burt's young son belongs to a scouting organization. A father of a fellow scout has volunteered to be the group's treasurer. Burt, as a bond underwriter, knows from an application he had rejected that the other father had been in trouble for embezzlement, but Burt's employer has a policy against disclosing publicly that which is learned in the course of underwriting. Burt is contemplating whether he should reveal to the scouts that which he knows. His dilemma could probably be resolved by

Select one:

A. Analyzing whether any laws, regulations, or standards apply to the situation.

B. Realizing that the scouts are a not-for-profit organization to which no ethical duty is owed.

C. Considering that his employer may someday want the rejected account.

D. Recognizing that the issue is one of practicality and not ethics.

Underwriting supervisor Tom has been receiving reports from his employees that Pam, who works in his unit, has an evening job as a waitress in a nearby town. While this is not a direct conflict of interest, his employees are upset because Pam calls in sick on most Fridays and then works her second job. This is a potential ethical dilemma for Tom and he must be aware of unethical situations that may arise. The first step in addressing this problem is for Tom to

Select one:

A. Search for any applicable code, standard, or regulation that may apply to Pam's situation.

B. Consider the personal impact of the decision such as alienation, isolation, or other negative effects.

C. Identify the conflict or ethical problem, if he is using a flow chart or checklist approach.

D. Complete the background work and then identify the appropriate decision maker.

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. People-based.

B. Rules-based.

C. Situation-based.

D. Function-based.

Newman is a claim representative who is investigating coverage for a new claim. He quickly realizes that the policy sold to the insured was not the one the insured believes he purchased. There would be coverage if the right policy was provided, but as it is, there is no coverage. Newman could honor the claim as if it were brought under the policy the insured expected. Otherwise, the agent could face an error and omissions claim. If Newman considers all the possible decisions and outcomes for each and bases his final decision on who will be helped and who will be hurt, and to what degree, he is practicing

Select one:

A. Checklist-based decision making.

B. Situation-based decision making.

C. People-based decision making.

D. Rules-based decision making.

Thomas, an insurance agent, has the opportunity to quote coverage on a home valued at two million dollars. If he obtains the business at a reasonable rate, the client will insure his commercial business, with annual net revenue of three hundred million dollars, with Thomas. Thomas knows that if he is able to insure both the home and commercial risk with his top insurer, he will become eligible for a substantial bonus. However, the insurer surcharges premium for any risk with wood as a primary heating source. The client's home is heated with a combination wood/electric furnace.

Which one of the following decisions would most likely be considered a situation-based decision for Thomas?

Select one:

A. Insure the risk with the insurer without disclosing that the primary heating is a wood/electric furnace.

B. Insure the risk with an insurer who does not provide bonuses but also does not surcharge wood heating.

C. Advise the client that he is unable to obtain the coverage and the client should find another broker.

D. Discuss the situation with his top insurer and ask for an exception due to the potential commercial policy.

Sally works for Insurance Company in the underwriting department where she implements policy changes. In reviewing a policyholder's address change, Sally realizes that the policyholder deserves a refund because her policy was being improperly rated at the old address. To make the correction according to company procedures and legal requirements, Sally would have to refund the difference in premium for the last ten renewals and would have to calculate interest on each period. She decides to simply make the address change and save the insurer some time and money instead. Sally's decision is clearly unethical under an analysis that is

Select one:

A. Situation-based.

B. People-based.

C. Function-based.

D. Rules-based.

Administrative barriers may prevent an insurance professional from making ethical decisions. Administrative barriers occur under which one of the following conditions?

Select one:

A. When key documents have been destroyed.

B. When witnesses are unavailable

C. When the processes are complicated and procedures are cumbersome

D. When insufficient guidance is available regarding ethical behavior

Ethical decision making becomes challenging when the outcomes are harmful, when others disagree with a decision, or when

Select one:

A. The alternatives involve illegal procedures.

B. Factual information is readily available.

C. The decision process is obstructed.

D. Legal or political aspects are obscured.

A restraint or a restriction to access is an example of which one of the following types of barriers to ethical decision making?

Select one:

A. A moral barrier

B. A procedural barrier

C. An administrative barrier

D. A physical barrier

John is an employee of an adjusting firm. He is applying for financial aid to help with tuition for his daughter's education. John does not reveal all of his assets so that financial aid will be greater. John's action

Select one:

A. Does not involve the Code of Professional EthicsEthical Guidelines for Insurance Professionals in any way.

B. Violates the purpose of the Code of Professional EthicsEthical Guidelines for Insurance Professionals.

C. Must be self-reported to his employer.

D. Is of no concern as it is not insurance related.

Vanessa is a marketing representative with Insurance Company (IC). Her territory is a large metropolitan area. In her territory, she has organized the Risk Management Club. She and several of IC's loss control representatives meet monthly with the risk managers of IC's major clients in the area. The group shares ideas about risk control, and talks about what the clients need in terms of loss control services. Vanessa sometimes arranges for outside experts to attend and give presentations.

Canon 4Diligent Performance of the Ethical Guidelines for Insurance Professionals states: Insurance professionals should be diligent in the performance of their occupational duties and should continually strive to improve the functioning of the insurance mechanism. Which one of the following best describes how Canon 4 applies in this case?

Select one:

A. Canon 4 only applies to those insurance professionals who are involved in product development, research, or regulation.

B. Vanessa is in compliance with Canon 4 because she is helping improve the insurance mechanism in her territory.

C. Vanessa is in violation of Canon 4 because she is having loss control representatives and outside experts do her job.

D. Canon 4 does not apply because this type of activity is outside of Vanessa's normal duties as a marketing representative.

Question 35

ID# 5853966

Points: 1

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Zack is a producer who routinely fails to provide all the necessary information requested on applications for insurance. Underwriters will often have to contact Zack to fill in missing information. Using the Ethical Guidelines for Insurance Professionals to evaluate Zack's actions, which one of the following is the most accurate evaluation of his actions?

Select one:

A. Zack is not assisting in improving the public understanding of insurance.

B. Zack's actions do not likely constitute legal conduct.

C. Zack is not placing the public's interest above his own.

D. Zack is not diligently performing his occupational duties.

Question 36

ID# 5849145

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John is a sole proprietor of an independent adjusting firm. An insurer e-mailed an assignment to him to adjust a property loss for John's church. Which one of the following is the best altruistic response for John?

Select one:

A. Inform both the church and insurer of his affiliation, adjust the loss, and request an audit of the loss.

B. Inform the insurer of his affiliation and decline the assignment.

C. Inform the insurer of his affiliation and adjust the loss.

D. Inform both the church and insurer of his affiliation and adjust the loss.

Question 37

ID# 5849392

Points: 1

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Grace is a commercial lines producer at Midtown Insurance Brokers. She submitted an application to Insurance Company (IC) on behalf of a client. The underwriter at IC, Dave, is concerned that the building is located in an undesirable, higher-risk area of town. Dave explains his concerns to Grace and asks her to personally inspect the client's premises and take photographs to send to IC. Grace inspects the premises and finds that the building is in poor repair, and the adjacent buildings on both sides are old, wood-framed, and vacant. There is evidence that street people are living in one. Grace carefully takes photographs of the most flattering views of her client's building and sends them to Dave. She feels she wants to do the best she can for her client, so she does not tell Dave that the building is in poor repair or even mention the adjacent buildings.

Canon 3Legal Conduct of the Ethical Guidelines for Insurance Professionals states: Insurance professionals should obey all laws and regulations, and should avoid any conduct or activity that would cause unjust harm to others. Which one of the following statements best describes how Canon 3 applies in this case?

Select one:

A. Grace's actions have harmed IC and as a result she has contravened Canon 3.

B. Grace has done nothing illegal and so is not in contravention of Canon 3.

C. Grace's intention is to do the best she can for her client so she is in compliance with Canon 3.

D. Grace has complied with Canon 3 because she did as Dave requested her to do.

Question 38

ID# 5849192

Points: 1

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Producer Bill has discovered that a producer from another firm has made serious errors in providing coverage to four of his clients. Bill is soliciting these clients and could easily obtain their business by denigrating the other producer's work. To be in compliance with the ethical canon titled Professional Relationships, Bill should

Select one:

A. Report the other producer to the insurance regulator.

B. Report the other producer to the appropriate insurance companies.

C. Present his own coverage proposal to the prospective clients.

D. Request legal advice on the matter from his attorney.

Question 39

ID# 5849390

Points: 1

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Frank is a commercial lines producer at Insurance Brokers (IB). Five years ago, he obtained an insurance designation. Completing the courses for the designation was a challenge for Frank and he had to work very hard to earn it. Since then Frank has not taken any courses or attended any insurance-related seminars even though IB actively encourages its employees to do so. Frank's feeling is that he has earned a designation and that should be enough. Which one of the following statements best describes how Canon 2Continuing Professional Development of the Ethical Guidelines for Insurance Professionals applies in this case?

Select one:

A. Frank has no obligations under Canon 2 because it applies only to those insurance professionals who have not obtained any designation.

B. Frank has complied with Canon 2 by obtaining a designation and is not obliged to participate in further professional development.

C. Frank is in contravention of Canon 2, which states that insurance professionals must attend courses and seminars required by their employers.

D. Frank is in contravention of Canon 2 because changes in the legal, economic, and social environment require continuous learning.

Question 40

ID# 5854136

Points: 1

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Frances is an underwriter for an insurance company. She received an application from a producer seeking coverage for her husband's employer. Although she believed that the insurance company should write the coverage, she asked another underwriter to handle the application to avoid any appearance of a conflict of interest. Which canon from the Ethical Guidelines for Insurance Professionals is most reflected by her actions?

Select one:

A. Placing the public's interest above her own

B. Seeking continually to maintain and improve her professional knowledge

C. Assisting in improving the public understanding of insurance

D. Raising the professional and ethical standards in the insurance business

Question 41

ID# 5849394

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Carl is an underwriter holding several insurance designations. He has studied the Code of Professional EthicsEthical Guidelines for Insurance Professionals and feels strongly that ethics are important in both his personal and professional lives. Carl finds that one of the ethical canons that is most appealing to him concerns the duty to maintain and raise professional standards. Which one of the following activities that Carl could undertake would best meet the letter and the spirit of that canon?

Select one:

A. Taking regular professional development courses and attending insurance-related seminars

B. Observing his coworkers and reporting any apparent impropriety to his employer

C. Participating in educational activities that assist others in their professional development

D. Conducting his business activities in a manner that will inspire other practitioners to do likewise

Question 42

ID# 5856334

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Herman is a supervisor who has been instructed to choose one of his three employees for layoff.

Employee Edward is a fair worker. He is a single parent with several young children. He would not find new work easily.

Employee Betty is a marginal worker. She has health issues that interfere with her ability to perform well. Herman admires her fortitude.

Employee Marisa is a solid worker whom he would like to retain. She is highly paid and dismissing her would help Herman meet his annual budget. She could find a new job without difficulty. Herman's boss hinted that he should layoff Marisa because she did not play ball with him.

Herman recognizes that there will be ethical components to his decision making. He decides to apply an ethical dilemma decision-making flow chart. The first thing Herman should do is to

Select one:

A. Gather information.

B. Consider whether there is a duty or loyalty to uphold.

C. Look for an applicable code or standard.

D. Identify the conflict or ethical problem.

Question 43

ID# 5849120

Points: 1

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An underwriter has realized that most of the potential insureds in the poor section of town will not qualify for homeowners insurance because of below-standards roofing. This disturbs her and she is using an ethical dilemma decision making flow chart to decide whether there is an ethical obligation to underwrite their properties anyway. If she is concerned with the perspective of the potential insureds, then she is at which one of the following steps of the flow chart?

Select one:

A. Determining which values and principles are at stake

B. Analyzing whether the issue is hers to resolve

C. Reviewing the dilemma from the three decision (rules-, situation-, and people-based) perspectives

D. Considering whether an application of a professional standard will resolve the issue

Question 44

ID# 5854406

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Insurance Company (IC) is concerned about its reputation of being an employer without diversity among its higher-ranked employees. IC has been asked by the local business association to provide a dozen of its employees to march in an Independence Day parade, which would be good publicity for IC. IC's vice-president of sales believes that the top twelve sales people should march, arguing that they have earned the privilege based on merit. The human resources director points out that there are no minorities among that group, and advocates that at least half of the marchers be members of minority racial groups. The sales vice-president and the human resources director are equally adamant in their stands. The company president must break the logjam. In using an ethical dilemma decision-making flow chart, the president should do all of the following, EXCEPT:

Select one:

A. Determine how IC's actions will be seen by others

B. Invite the public to take an Internet poll on the issue

C. Analyze the positive and negative impact on stakeholders

D. Evaluate the dilemma from various perspectives

Question 45

ID# 5849113

Points: 1

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Christine, an underwriter working for Insurance Company, placed a telephone call to Olivia, an agent, to complain that many of the applications submitted by Olivia and accepted by Christine lately represent poor quality risks. Christine told Olivia that she will be enforcing underwriting guidelines more strictly in the future. Olivia said she will do better, and then mentioned that no one is using her ski chalet next weekend and Christine and her family are free to use it. Christine would love to accept, but wonders whether that would create an ethical conflict.

If Christine uses an ethical dilemma decision-making flowchart, she will

Select one:

A. Determine whether application of a professional standard/code will resolve any conflict.

B. Determine that the circumstance is really a business conflict rather than an ethical one.

C. Recognize that no values or principles will be compromised by accepting Olivia's friendly gesture.

D. Realize that there are no ethical issues that need to be resolved.

Question 46

ID# 5849050

Points: 1

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Saba, an experienced claim representative for Insurance Company (IC), had been assigned a claim brought by a client of Attorney Delmelon. She had visited Delmelon's office to obtain medical records, and learned that Delmelon is also an arts and entertainment lawyer with connections with publishers. Saba mentioned to Delmelon that her husband is an author who has been trying to have his first novel published. Delmelon replied that if Saba does right by his client, he'll provide contacts that would help her husband's cause. Saba decided to treat the claim as any other, but to nevertheless follow up with Delmelon concerning her husband's manuscript at the conclusion of the claim.

Saba sought what she believed was reasonable settlement authority. Her supervisor said, Saba, I'll give you the authority you requested, but I'm a little surprised that you place such a high value on the claim. You seem to see only the positive aspects of claimant's case, and none of the mitigators. Saba wonders whether a desire to help her husband has affected her judgment. Which one of the following statements is true?

Select one:

A. Saba should review the situation and realize that she has yet to receive anything from Attorney Delmelon and any ethical issues are purely speculative.

B. Because Saba has identified an ethical issue, she should review the Code of Professional EthicsEthical Guidelines for guidance.

C. Because Saba's supervisor has provided the settlement authority she requested, it is the supervisor and not Saba who is responsible for any ethical issues.

D. Saba should consider that her husband's writing career is important and that she does not think she overvalued the claim, and conclude that her claim evaluation was derived ethically.

Question 47

ID# 5849105

Points: 1

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Insurance Company's (IC's) field claim personnel were invited to play softball against the members of a large law firm that has many clients with claims against IC and IC's insureds. IC's supervisors saw it as a friendly way to foster good-fellowship among professionals who are often adversaries. Afterwards, both teams retired to the same tavern. The senior partner at the law firm pulled out his firm's credit card and announced that everyone's snacks and drinks would be paid for by the firm. All of the following statements are true, EXCEPT:

Select one:

A. By paying the bill for the claim personnel, the law firm is assisting is establishing an honorable relationship between professions.

B. The claim personnel may have a conflict of interest if they accept food or beverages paid for by the law firm.

C. IC's employees who accept snacks and drinks paid for by the law firm have a duty to tell IC's management that they did so.

D. IC's employees should be aware that the law firm may be looking for something other than good-fellowship.

Question 48

ID# 5849102

Points: 1

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Claim representative Marta has a good relationship with Fatima, a defense attorney used by her employer. Marta and Fatima have met for coffee on their own time, and have common interests outside of their professional lives.

The insurance company for which Marta works has a policy prohibiting the receipt of holiday gifts from vendors. Fatima wants to send a fruit basket from her firm to Marta anyway. She sent an e-mail to Marta asking for her home address so that she can send the gift as a token of friendship and avoid any scrutiny from Marta's employer. Marta would like a free fruit basket, but is uncomfortable with the suggested arrangements. Which one of the following is a useful step she can take?

Select one:

A. Marta should request that the gift be accompanied by a written s