Ethics & Quality Business Flashcards
4 unethical practices in the life insurance business
rebating
replacement or twisting
misrepresentation
knocking
occurs when the agent does any of the following:
-offers part of his commission to the purchaser
-accepts a smaller premium than the one stipulated in the policy
-gives the buyer of life insurance anything of significant value
rebating
occurs when the agent persuades a policy owner to discontinue or lapse a policy in order to purchase a new policy. also occurs if the policy owner is persuaded to:
surrender a contract with another company and buy a new one from the agent’s company; or
allow a policy to become paid-up or use the extended term insurance option to free up premium.
replacement or twisting
takes place in any of the following situations:
- an agent makes any written or oral statement which does not tell the exact truth about the policy’s terms or benefits (policy misrepresentation)
- an agent describes a policy by a name that does not reflect the true nature of the policy (policy misrepresentation)
- an impression is given that any illustration of dividends is a guarantee of future payments (dividend misrepresentation)
- false information is entered into the application in order to secure the issuance of the contract
misrepresentation
If an agent runs down or makes derogatory remarks about a competing policy, agent or company, it is considered _____
knocking
If an agent runs down or makes derogatory remarks about a competing policy, agent or company, it is considered _____
knocking
What is LUAP
Life Underwriters Association of the Philippines
LUAP rules
-best interest of clients
-highest standards of professional competence
-hold in strict confidence, all business and personal information
-full disclosures of all facts necessary
-refrain from conduct which would cause public to lose confidence in life insurance
-abide by all provisions of laws and regulations of the IC and the company
