The news is full of tales about people who compete the wrongway: baseball players who cheat the rules, football or baseballcoaches who steal signals from opponents, or those who conceal theunethical acts of players so they are not suspended. And the issuesare not confined to sports. Think of investment bankers who concealthe truth about investment risks or just plain sell millions innonexistent securities to gullible people trying to find an edge onthe market. Often, the explanation for unethical competition comesdown to the classic excuse: “I was unlucky enough to getcaught—everybody does it.”

So what about our business of selling benefits? Are there issuesin our own backyard? We’d love to say it can’t happen here, butwe’re unable to do so. We know there were some well-publicizedissues a few years ago—back before Eliot Spitzer had his ownethical lapse (and didn’t you enjoy him on CNN discussing themisdeeds of others?). Problems identified then included bidrigging, kickback payments, non-disclosed bonus compensation, andso on. In the insurance industry overall, the topper was thecreation of poorly regulated “insurance products” (credit defaultswaps) that disguised risk and the true nature of the assets beingpurchased.

While these are big picture issues—covering millions of dollarsof business—we may be lulled into thinking they have gone away andnever existed in our own worlds. But think of the ways in whichethical lapses can easily fall into our world. Here are someexamples:

  • Disparaging a competitor unfairly (statements such as “word onthe street is that [company x] has administrative issues” can bedamaging and are rarely backed by anything but hearsay)
  • Editing documents related to case underwriting such as censusinformation, type of business operation an employer runs,experience reports, eligibility standards, etc.
  • Misrepresenting policy terms and definitions, coverage dates,age or benefit limits, underwriting limits
  • Promising that a takeover of benefits from another carrier willhave identical plan provisions (when in fact there aredifferences)
  • Altering from 5500 reports
  • Creating product comparisons that are incomplete (failing toshow the advantages of a competitor alongside your proposedproduct, for example)
  • Concealing a superior quote from a prospect for selfish reasons(examples are higher compensation and convention trips)
  • In voluntary enrollment, enticing employees to purchaseproducts by overstating their value or pushing high cost, highcommission products to employees

In summary, there are plenty of ways we can fall into ethicallapses in the world of selling benefits. It can be difficult towatch competitors acting unfairly without yielding to thetemptation to join them. The best course of action is to stay onthe high road with customers. Most employers want to do things theright way, and will respect you for competing the right way,presenting accurate information to them and your carriers,presenting product solutions that are in their best interests (andnot necessarily yours), and presenting balanced, honest appraisalsof the relative merits of your offering versus those ofcompetitors.

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