A Question of Ethics

Eric A. Wiening, CPCU, ARM, AU, AAI, API, is currently an independent consultant and adjunct professor of insurance at the American College. Wiening is a member of the CPCU Society’s Ethics Committee and a former Ethics Counsel for the American Institute for CPCU.

Do CPCUs Have a Responsibility to Exercise Independent Judgment?

Some years ago, my wife Betsy had an eye problem and consulted Dr. A., an ophthalmologist. Dr. A. recommended laser surgery, and it sounded a bit frightening to consider zapping her retina and permanently destroying some of the cells in her central vision. I suggested she get a second opinion before proceeding. Betsy then met with another ophthalmologist, Dr. B., to get his opinion. Upon hearing that she had already seen Dr. A., Dr. B. gave his advice: "Do whatever Dr. A. suggests." It seemed Dr. B. was afraid to second-guess Dr. A. Then he sent his bill. Our health insurance would have covered Dr. B’s fee. However, I refused to submit the bill and instead returned it to Dr. B along with a letter explaining why his bill would not be paid. My letter made it very clear that "Do whatever Dr. A. suggests" did not, in my opinion, qualify as a second opinion.

We later learned that Dr. A. is one of the more prominent doctors in his field, and perhaps that explains Dr. B’s reaction. But it does not justify it. At some level, Dr. B. apparently agreed with my critique that he had not given a second opinion. He never gave a second bill either.

What, you might ask, does this personal anecdote involving my nonpayment of a bill have to do with the ethical life of a CPCU? It relates more directly than you might think. The Code of Professional Ethics of the American Institute for CPCU includes a rather obscure guideline, G6.4, which reads as follows, "Like other professionals, a CPCU should maintain the knowledge and skills necessary to exercise independent judgment in the performance of his or her professional services." Even though this is a guideline and not an enforceable rule, the message is clear: Independent judgment is a CPCU’s professional responsibility. Guideline G6.4 falls under Canon 6 of the Code, which deals with professional relationships: "CPCUs should strive to establish and maintain dignified and honorable relationships with those whom they serve, with fellow insurance practitioners, and with members of other professions."

What’s Expected of CPCUs

We expect other professionals to exercise independent judgment. When a Certified Public Accountant reviews a corporation’s financial records, we do not expect his or her report to read, "Because this is what the corporation submitted, I believe it to be true." Rather, we expect the CPA to audit and verify corporate records and to apply his or her own judgment and skills in rendering a sound opinion on which others can rely.

It is easy, perhaps, to acknowledge the independent judgment required of medical professionals and accountants. It might be more difficult to recognize the independent judgment required of insurance and risk management professionals. Yet, our judgment is challenged every time we are asked for an opinion, and sometimes when we aren’t.

I’ve never forgotten one business meeting in which a top executive began a statement with the phrase, "I’m sure we’d all agree that . . . " When he finished the statement, one employee bravely piped up, "No, I don’t agree." The discussion that followed led to a new way of examining the issue at hand.

Insurance and risk management professionals are constantly asked for their opinions:

• Is this the right price for this risk?

• Is this exposure classified correctly?

• Which of these policies best meets our needs?

• How much is this claim worth?

• Should we pay this claim or defend it?

• Does this action meet legal requirements?

• What is the right thing to do?

These questions, and many, many others, call for independent professional judgment. Often, they are loaded questions, especially when raised by a superior who is seeking affirmation rather than an opinion. It’s easiest and safest to agree with the boss. However, Guideline G6.4 argues against affirming an opinion that clashes with the professional’s personal judgment. A professional’s second opinion might or might not agree with that of others, but it should be the professional’s own opinion.

G6.4 says a CPCU "should maintain the knowledge and skills necessary to exercise independent judgment." The depth and breadth of the CPCU program, as well as our continuing education activities, expose CPCUs to knowledge that sometimes enables us to view issues from different perspectives, to see beyond the obvious, to recognize the relationships, to be aware of viable alternatives, and to offer second opinions that are rational, intelligent, workable, and ethical.

Seek Other Opinions

This is not to suggest that CPCUs know it all (we don’t) nor that we should act like obnoxious know-it-alls. Guideline G6.4 goes on to say, " . . . a CPCU should always be mindful of his or her personal limitations. A CPCU should not hesitate to seek the counsel of other professionals, therefore, not only at the request of those whom the CPCU may serve but also on the CPCU’s own initiative, particularly in doubtful or difficult situations or when the quality of professional service may otherwise be enhanced by such consultation." At first glance, this seems to present a conflict. A CPCU, it seems to say, should both exercise independent judgment and seek the judgment of others. Closer examination makes it clear that we seek others’ judgment because we recognize our limitations. Given the theme of this article, I feel obligated to point out the importance of seeking others’ independent judgment, not just their affirmation.

We all know people who are unwilling to accept criticism. They do not want to hear how their work could be improved. We also know people who seek out constructive criticism and actively look for ways to improve their work. It hardly seems necessary to ask which approach produces the better long-run result.

What Can You Do?

Educated, well-meaning individuals often propose dramatically different ways to address the same problem. This occurs even when they are presented with the same objective information. If evidence is needed, we need only to reflect on the recent presidential campaign that dealt with a wide range of political, economic, and global issues, and an equally wide range of opinions. The CPCU Society operates in a world that is only a little smaller. We are a global association of insurance and risk management professionals that collectively possess a wealth of knowledge, experience–and opinions. Yes, we do have opinions, and it is our professional responsibility not only to exercise independent judgment in voicing them but also to seek out and respect the judgment and opinions of our fellow professionals. We need to listen to our fellow professionals even when their second opinions do not affirm our own. Sometimes that’s when we need to listen the hardest. And when it’s hardest to listen.

Some of the strengths of the CPCU Society lie in the experience, the ethics, and the common level of education necessary to qualify for membership. Another strength lies in our diversity. I’m not referring here to the work of the Diversity Task Force, although it is relevant, but rather to the fact that CPCU Society members represent a broad functional cross-section of our entire industry. We view things from many different perspectives, and as a result, we have many different and informed professional opinions. We become a richer organization when we not only voice our independent opinions but also listen to the independent thinking of other professionals, realizing that their opinions might differ from ours. The differences can be especially strong when issues involve questions of ethics, especially with ethical situations that, like many CPCU essay exam questions, have more than one right answer.

As individual CPCUs, as CPCU chapter members, and as members of a national CPCU Society, we face the difficult challenge of promoting ethics while recognizing that many ethical issues have more than one right answer. Often, we address these issues most effectively when each of us is willing not only to express an independent opinion but also to ascertain and understand the needs and opinions of others. We may limit ourselves if we try to force a consensus or believe our richly diverse organization must speak with a single voice.

That’s my opinion. What’s yours?

In upcoming issues of CPCU News, the authorship of the "Questions of Ethics" column will rotate among members of the CPCU Society’s Ethics Committee. If you have suggestions for upcoming articles or comments about the "Question of Ethics" column, please contact Sonya Marie Hope, CPCU, Ethics Committee chairman, at shope@albertrisk.com. Please note the opinions expressed in this column are those of the author and do not necessarily reflect the views and opinions of the CPCU Society membership.