The news is full of tales about people who compete the wrong way: baseball players who cheat the rules, football or baseball coaches who steal signals from opponents, or those who conceal the unethical acts of players so they are not suspended. And the issues are not confined to sports. Think of investment bankers who conceal the truth about investment risks or just plain sell millions in nonexistent securities to gullible people trying to find an edge on the market. Often, the explanation for unethical competition comes down to the classic excuse: “I was unlucky enough to get caught—everybody does it.”
So what about our business of selling benefits? Are there issues in our own backyard? We’d love to say it can’t happen here, but we’re unable to do so. We know there were some well-publicized issues a few years ago—back before Eliot Spitzer had his own ethical lapse (and didn’t you enjoy him on CNN discussing the misdeeds of others?). Problems identified then included bid rigging, kickback payments, non-disclosed bonus compensation, and so on. In the insurance industry overall, the topper was the creation of poorly regulated “insurance products” (credit default swaps) that disguised risk and the true nature of the assets being purchased.
While these are big picture issues—covering millions of dollars of business—we may be lulled into thinking they have gone away and never existed in our own worlds. But think of the ways in which ethical lapses can easily fall into our world. Here are some examples:
- Disparaging a competitor unfairly (statements such as “word on the street is that [company x] has administrative issues” can be damaging and are rarely backed by anything but hearsay)
- Editing documents related to case underwriting such as census information, 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 will have identical plan provisions (when in fact there are differences)
- Altering from 5500 reports
- Creating product comparisons that are incomplete (failing to show the advantages of a competitor alongside your proposed product, 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 purchase products by overstating their value or pushing high cost, high commission products to employees
In summary, there are plenty of ways we can fall into ethical lapses in the world of selling benefits. It can be difficult to watch competitors acting unfairly without yielding to the temptation to join them. The best course of action is to stay on the high road with customers. Most employers want to do things the right 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 (and not necessarily yours), and presenting balanced, honest appraisals of the relative merits of your offering versus those of competitors.
From the February 2012 issue of Benefits Selling Magazine
