Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: MONDAY, August 7, 1995                   TAG: 9508070073
SECTION: MONEY                    PAGE: A-8   EDITION: METRO 
SOURCE: JANE BRYANT QUINN WASHINGTON POST WRITERS GROUP
DATELINE: NEW YORK                                LENGTH: Medium

INSURANCE INDUSTRY FINALLY ADDRESSES ETHICS

So I'm happy to report that the Life Underwriter Training Council in Bethesda, Md., has put together a training text for insurance agents that directly confronts the self-deceptions that underlie dishonest sales. The book, called ``Piecing Together the Ethical Puzzle,'' has been used to train some 55,000 agents so far, said its editor, Gregory Dean.

Until recently, the industry chose to ignore this issue. Then the big public scandals hit: the lies told about policies, rape of customers' cash values, the disregard of people's trust. And involving big names: Metropolitan Life, John Hancock, Prudential, New York Life. ``The industry was dumbfounded,'' Dean says.

So they pulled their heads out of the sand and agreed to a more honest discussion of the problems. The major ethical issues, as the council sees them, include these:

Agents aren't identifying their customers' real needs.

As a result, they sell unsuitable policies that don't provide the security you seek. The council sees three reasons for unsuitable sales: (1) The agent doesn't know enough. (2) The agent has a policy with attractive features and knows it can be an easy sale. So he sells it, suitable or not. (3) The agent goes for the policy that will pay him or her the highest commission.

Agents are not properly identifying themselves or their products. They hide behind other titles, such as ``financial planner'' or ``special retirement representative.'' They duck the word ``insurance,'' and they may misrepresent their policies as a college- or retirement-savings plan.

Agents fail to deal objectively with clients. In the worst cases, involving fraud, they put personal gain above a client's interests, the council says.

The only weakness in the industry's rediscovery of ethics is the narrowness of its focus. Everyone talks about the misdeeds of the agents who tell you fibs while sitting in your living room. But the executives of the insurance companies are equally responsible for allowing, even encouraging, deceptive sales. The council's next book should be an ethics course for executives and their actuaries, too.