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10/2 W01/March 2017 Award in General Insurance

Introduction

In this chapter we will explain the role and importance of ethics in the insurance industry, and outline
the core principles set out in the Chartered Insurance Institute’s Code of Ethics. We will go on to consider
‘fit and proper’ requirements, which affect the management of insurance companies and seek to embed
a values-led culture. Finally, we will look at how having an effective internal control system in place
helps companies to ensure that objectives are established, achieved and monitored.

Key terms
This chapter introduces the following terms and concepts:
CII Code of Ethics Complaints procedure Compliance and audit ‘Fit and proper’
requirements
Integrity Internal control system Knowledge and experience Risk management
framework
Soundness of judgment Unsuitability

A Ethical standards

The CII is at the forefront of insurance education

In the insurance market, the Chartered Insurance Institute (CII) has been at the forefront of insurance
education and professionalism for over 100 years. Over that time, membership has grown to more than
125,000 and includes professionals from over 150 countries worldwide.

The CII’s examination programmes and membership services ensure that members are equipped with
the knowledge and understanding of insurance needed to perform their roles effectively. The CII’s
activities are extensive and include:
• setting a high standard for members in its Code of Ethics; Reference copy for CII Face to Face Training
• promoting professional growth;
• offering a range of qualifications and the means to study for these;
• specialist societies for continuing education and development;
• faculties for different professional interest groups;
• training in technical subjects;
• library and information services;
• specialist publication production;
• careers information service;
• insurance education development overseas; and
• local institute educational and social programmes.

All professional bodies have a code of conduct which is binding, to a greater or lesser extent, on its
members.
• A code may be binding on members in honour only; its only means of punishment may be the
disapproval of fellow professionals and a withdrawal of their co-operation in professional
transactions.
• In some cases, breaches may be punished by official censures, fines or expulsion from the
professional body itself.
• Only where it is a legal requirement to be a member of a professional body in order to conduct
business does expulsion from a profession prevent an individual from practising.
10 • Where the State regulates a profession, breaches of a statutory code of conduct are not matters of
professional misconduct; they are criminal offences punished by fines, imprisonment or the
Chapter Professional competence
withdrawal of the right to practise.

Professional bodies are linked to those whose job is in a particular sector. They set appropriate
examinations, often at different levels, in order to provide a progression towards their highest
qualification, which is typically Fellowship.