Insurance agents have code of ethics too!

I discovered that insurance agents are also bound by a code of ethics after reading this letter in the ST Forums.

Insurance professionals sell policies on basis of client's needs

We refer to the articles "Many Singaporeans don't have the right insurance cover" (ST, Nov 11) and "More turning to term insurance plans" (Sunday Times, Nov 12).

The statements in the articles - "there is a high chance that whatever product is sold depends on the commissions derived" and "agents did not push such (term insurance) plans aggressively given the lower commissions" implied that all insurance advisors sell products that give the highest commissions and not based on the customer's needs.

The Insurance and Financial Practitioners Association of Singapore (IFPAS) feels that such an implication is highly unfair to the many professionals in the insurance industry who sell products based on clients' needs.

Each type of coverage, be it participating whole life and endowment, investment-linked plans or term insurance, has its own product attributes that cater to specific needs.

For example, the cash values accumulated in participating whole life plans can be used to pay premiums should the policy owner run into financial hardship and cannot afford to make premium payments. On the other hand, the cover for term insurance will cease once premium payment is not made.

Though one can argue about the merits of "buy term and invest the rest", the purpose of this letter is to rebut the highly biased statements in the articles.

IFPAS represents over 4,500 insurance and financial practitioners in the industry and we are proud that our members have to adhere to its Code of Ethics, which IFPAS enforces strictly to ensure a high standard of professionalism and to protect the public's interests.

The Code of Ethics is appended below:

An IFPAS member shall:

- Always place the best interest of his clients before his own.

- Hold in the strictest confidence, and consider as privileged, all business and personal information pertaining to the client's affair.

- Make full and adequate disclosure of all facts necessary to enable the client to make a intelligent decision.

- Not conduct his profession to cause the public to lose confidence in the Association or the insurance and financial services industry.

- Not indulge in unethical practices which may be detrimental to the client or the insurance and financial services industry.

- Abide by and conform to all rules and regulations of the Association.

The mark of the IFPAS membership signifies professionalism and ethical practices. Consumers can rest assured that our members will sell products based on client's needs.

Ting Chee Kheong
Council Member (Chairman, PR Committee)
2006/2007 Executive Council
Insurance and Financial Practitioners Association of Singapore

It is good to hear that there is a code of ethics that agents have to abide by. Very similar to what doctors have.

However when was the last time you heard of insurance agents found guilty of unethical practices? Eg advising clients on policies based on what the agent's interests are vs the client's?

It is one thing to have the code of ethics and all. It is another to actually enforce it and catch the offenders.

Frankly, I am sad to say I do not have the confidence that the IFPAS has acted and will act on agents. For the matter it is unlikely anyone ever goes out to catch any such offeding agents.