Insurance agents should build trust, not abuse it
INSURANCE transactions involve a great deal of trust because of their financial nature. By agreeing to buy a policy and pay the corresponding premium, the clients are placing their trust and confidence on the insurance company that they believe will safeguard their future financial woes when the risks they are insuring against occur. However, given the complexity of the business of insurance, the establishment of this trust between the insuring public and the insurance company is generally instituted through an active facilitator of the transaction, or more commonly known as the insurance agents.
One of the main goals of insurance agents is to gain the trust of the insuring public because aside from the insurance dealings involving a nontrivial amount of money, these transactions typically entail the gathering of personal and sensitive information that the people would not otherwise disclose to anyone. Yet, such information is necessary for determining the appropriate policy and premium payment structure for the client, which is why gaining the insuring public’s trust and confidence is of utmost priority among the insurance agents.
Nevertheless, the time may come when trust could be abused or taken advantage of through the agent’s mishandling of the money supposedly to be used as the client’s premium payment or through the agent’s misrepresentations of the information shared by the client.
The government recognizes these potential challenges that may affect and jeopardize the operations of the entire insurance industry. Thus, some guidelines were laid down to describe the qualities that should not be found among the insurance industry’s agents.
This set of rules was made known through the Insurance Commission Circular Letter (IC CL) 17- 2006, which aims to further promote professionalism on the insurance industry’s sales force and to protect the insuring public other stakeholders.
The IC CL 17-2006 establishes a “negative list” of insurance agents, or those erring and non-compliant insurance agents, whether active or inactive, and whose names will be provided by all life and non-life insurance companies.
Insurance agents who find their names on the negative list are there because of pending complaints filed against them before any of the following:
– Willfully violating the Insurance Code
– Intentionally making a material misstatement in his or her application to qualify as an insurance agent
– Obtaining or attempting to obtain a license by fraud or misrepresentation
– Fraudulent or dishonest practices
– Misappropriating or converting to his own use or illegally withholding sums of money required to be held in a fiduciary capacity
– Not demonstrating trustworthiness and competence to transact business as an insurance agent in such a manner as to safeguard the public
– Materially misrepresenting the terms and conditions of policies or contracts of insurance which he seeks to sell or has sold.
There are situations when the complaint against an insurance agent is withdrawn on the company level because the complainant-client just chose to settle or compromise.
Nevertheless, to maintain the integrity and trustworthiness of insurance intermediaries in protecting the interests of the insurance public, the insurance company involved may still refer the matter to the IC, through the licensing division, for appropriate action, according to a more recent circular by the commission (IC CL 2015-45).
Furthermore, the client’s retraction does not bar or prohibit the right of the IC to assume jurisdiction over the complaint
motu propio, which means that the IC may conduct further investigations as to the matter of the complaint against the nonconforming insurance agent to ensure not just a set of competent front liners, but also to maintain the trustworthiness of the financial mediators.