1. Ethics © 2011, National Association of Health Underwriters www.nahu.org NAHU

2. Good Ethics is Good Business Why? Maybe it’s because the Insurance Industry is so highly regulated. Maybe it’s because NAHU makes a point to promote ethical behavior. Maybe it’s because the Insurance Industry realizes that ethical practices make good sense! Whatever the reason “Insurance and Financial Services” rate at the top!

3. © 2011, National Association of Health Underwriters www.nahu.org 2001 Walker Information National Employee Benchmark Study on Integrity in the Workplace The Good News Ranking the best to the worst. Employee perception of workplace ethics rank industries as follows: 1.Insurance 2.Financial Services 3.Business Services 4.Wholesale Trade 5.Technology 6.Health Services 7.Communication 8.Manufacturing 9.Retail Trade 10.Transportation

4. © 2011, National Association of Health Underwriters www.nahu.org Ranking the Best to the Worst Marc Drizin, Vice President and Loyalty Specialist from Walker Information attributes the rating for Insurance and Financial Services to two factors: 1.“Both of these industries are regulated and have compliance requirements.” 2.“The success in these industries is dependent upon a company’s ability to build a good reputation in the marketplace.”

5. © 2011, National Association of Health Underwriters www.nahu.org The Bad News Statistics show that one out of every five employees in the insurance industry is aware of at least one ethical violation over the last two years, then we still have a long way to go!

6. © 2011, National Association of Health Underwriters www.nahu.org What Kind of Ethical Violations? Insurance and Financial Services employees were asked to: “Describe the behavior you suspect is or was in violation,”  half reported witnessing unfair treatment of employees;  four in ten reported improper/personal use of company resources;  25% reported lying or intentionally misleading customers ;

7. © 2011, National Association of Health Underwriters www.nahu.org Any Other Ethical Violations?  half reported lying on reports or falsifying records;  One out of two reported lying to their supervisors, and  Four in ten reported conflicts of interest.

8. © 2011, National Association of Health Underwriters www.nahu.org How Can We Raise The Bar? Walker Information Vice President, Jeff Marr suggests, “Integrity is clearly a top- down value. If senior leaders don’t exhibit the behaviors and decisions of high integrity, the company’s employees aren’t going to go the extra mile to do the right thing.”

9. © 2011, National Association of Health Underwriters www.nahu.org True or False? Leadership is critical if you want to build an ethical organization? (Not just C.E.O.’s an Board members) Ethical leadership can come from any of us? For a collective industry to make significant strides ethically, each employee, individually, has to commit to doing what is right? We must do it because it is the right thing to do? Our actions speak louder than words?

10. © 2011, National Association of Health Underwriters www.nahu.org Why Ethics? Consider this scenario. You are at the movies which have just ended. As the person in front of you gets up, you see him drop a twenty-dollar bill from his coat on to the floor. What would you do: take the money and run? say nothing and leave it for the cleaning crew? tap the person on the shoulder and let him know he dropped some money? Would your answer be different if it was a five-dollar bill? How about a quarter?

11. © 2011, National Association of Health Underwriters www.nahu.org The Moment of Truth You can’t put this decision off till tomorrow. The person who dropped the money is about to leave and be gone forever. There is not enough time to use a “lifeline”. You can’t call a friend or poll the audience. The decision is completely up to you! Whatever action you take or don’t take is a direct reflection of your character!

12. © 2011, National Association of Health Underwriters www.nahu.org What is Character? It is defined as “the combined moral or ethical structure of a particular person.” Character is also defined as the combined principles, values and beliefs of an individual. Some children were asked the question during a tutoring program “What is character?” one little boy stood up and said “It is the stuff inside you” – a simple but accurate answer?

13. © 2011, National Association of Health Underwriters www.nahu.org Character in Your Professional Life? “Professional ethics” is defined as “the set of principles or values we use to guide us professionally.” “Ethics” is defined as “a principal of right or good conduct; a system of moral principals or values; the rules or standards governing the conduct of the members of a (our) profession.”

14. © 2011, National Association of Health Underwriters www.nahu.org Why Ethics Are Important to Our Industry? Ethics provide guidance when we are confronted with a new or unfamiliar situation. Ethical behavior is critical in maintaining trust between an insurance or financial services professional and the clients he or she serves. A “Code of Ethics” provides guidance beyond just doing what is a legal or regulated practice.

15. © 2011, National Association of Health Underwriters www.nahu.org NAHU Code of Ethics To hold the selling, service and administration of health insurance and related products and services as a professional and public trust and do all in my power to maintain its prestige. To keep paramount the needs of those whom I serve. To respect my clients' trust in me, and to never do anything which would betray their trust or confidence. To give all service possible when service is needed.

16. © 2011, National Association of Health Underwriters www.nahu.org NAHU Code of Ethics (Continued) To present policies factually and accurately, providing all information necessary for the issuance of sound insurance coverage to the public I serve. To use no advertising which I know may be false or misleading. To consider the sale, service and administration of health insurance and related products and services as a career, to know and abide by the laws of any jurisdiction Federal and State in which I practice and seek constantly to increase my knowledge and improve my ability to meet the needs of my clients.

17. © 2011, National Association of Health Underwriters www.nahu.org NAHU Code of Ethics (Continued) To be fair and just to my competitors, and to engage in no practices which may reflect unfavorably on myself or my industry. To treat prospects, clients and companies fairly by submitting applications which reveal all available information pertinent to underwriting a policy. To extend honest and professional conduct to my clients, associates, fellow agents and brokers, and the company or companies whose products I represent.

18. © 2011, National Association of Health Underwriters www.nahu.org A Review of Prohibited Practices Rebating – Splitting a commission or paying a client for his business. Prohibited except in Florida and California and punishable by loss of license. Twisting – Convincing a prospect to let a policy lapse or to surrender a policy so that a competitive company can sell him a new policy which is not in the best interest of the prospect.

19. © 2011, National Association of Health Underwriters www.nahu.org More Prohibited Practices Churning – Convincing a prospect to replace a policy with a new policy from the same company, which is not in the best interest of the prospect. Misrepresentation – When during an insurance transaction an agent unintentionally makes statements or presents misleading or false information to the prospect. To avoid misrepresentation, an agent must thoroughly understand the product or service he or she is selling. Many states require the delivery of a “Buyer’s Guide” to protect the prospect.

20. © 2011, National Association of Health Underwriters www.nahu.org More Prohibited Practices Fraud – Intentionally misrepresenting any information in an insurance transaction. Punishable by fines and/or imprisonment. Failure to Remit Premiums – It is unacceptable for an agent to hold a premium for an unreasonable length of time. Premiums should be submitted to the insurance company at the earliest opportunity.

21. © 2011, National Association of Health Underwriters www.nahu.org Looking for Guiding Principles Some say if it’s legal it’s ethical. Building long-term relationships means going well beyond what is legal. You have to do what is “right” for the client. Your sense of right and wrong probably came from your family. It is from our families that we, hopefully, learned the basic rules for building relationships and getting along with people.

22. © 2011, National Association of Health Underwriters www.nahu.org Searching for Principles That Support Long Lasting Relationships The first step is to look back at the Twelve Great Character Lessons of Youth: 1.Cheaters never win 2.Do the best you can 3.Forgive and forget 4.Be thankful for what you have 5.Sisters are people too (so are brothers) 6.Always tell the truth 7.Be sure to say “please” and “thank you” 8.Don’t forget to clean up after yourself 9.What goes around comes around 10.To give is to receive 11.If you don’t have something nice to say, then don’t say anything at all 12.Treat other people the way you would like to be treated

23. © 2011, National Association of Health Underwriters www.nahu.org Translating Personal Character Lessons Into Business Principles The second step is to translate our list of personal character lessons into a list of business principles. Translations: 1.Cheaters never win – Don’t deceive or mislead to get ahead. 2.Do the best you can – Always do what is in the client’s best interest. 3.Forgive and forget – Don’t let anger or frustration influence your future actions.

24. © 2011, National Association of Health Underwriters www.nahu.org Translations (Continued) 4.Be thankful for what you have – Clients come first; prospects come second. 5.Sisters are people too – Clients, co-workers and competitors deserve to be treated with dignity and respect. 6.Always tell the truth – Always tell the truth. 7.Be sure to say “please” and “thank you” – Conduct yourself in a professional manner.

25. © 2011, National Association of Health Underwriters www.nahu.org Translations (Continued) 8.Don’t forget to clean up after yourself – If you make a mistake, go back and fix it. 9.What goes around comes around – Your professional success and reputation are the result of the way you conduct your business. 10.To give is to receive – If you provide a valuable service, you will be rewarded.

26. © 2011, National Association of Health Underwriters www.nahu.org Translations (Continued) 11.If you don’t have something nice to say, then don’t say anything at all – Before you speak, think about being considerate and respect your client’s confidentiality. 12.Treat other people the way you would like to be treated – Clients, co-workers and competitors deserve to be treated with respect, dignity and compassion, just as you want to be treated.

27. © 2011, National Association of Health Underwriters www.nahu.org Case Study #1 An agent is working on a large life case with an older couple. All of the preliminary meetings with the clients have gone well, and the agent has scheduled a meeting to complete and sign the application. During this meeting, the clients say that they would like to have their son review the proposal. The agent fears that this sort of third-party involvement could cause the clients to become confused and possibly delay the whole process. The agent convinces the clients to sign the application. He then submits the case to underwriting with the understanding that he will send the proposal to the clients’ son for his review….

28. © 2011, National Association of Health Underwriters www.nahu.org Case Study #1 (Continued) The agent does send the information to the clients’ son, though not right away. Unfortunately, when the clients’ son calls the agent to discuss the proposal, the agent is unavailable and a little slow in getting back to him. By the time the agent and son finally discuss the proposal, it is too late to make any changes because the policy has already been issued. How should the agent have handled this situation? Here are two suggestions.

29. © 2011, National Association of Health Underwriters www.nahu.org Case Study #1 (Continued) Suggestion#1 – When the clients’ bring up their desire to have their son review the proposal, the agent should STOP the application process immediately and schedule an appointment with the clients’ and their son. Preferably, the agent should set the appointment before the end of this meeting. Keep in mind that the son represents another prospective relationship to develop. If the proposal the agent has presented is in the clients’ best interest and you openly share your thoughts and expertise with the son, you will create the foundation for a new relationship.

30. © 2011, National Association of Health Underwriters www.nahu.org Case Study #1 (Continued) Suggestion #2 – The agent can avoid this situation by asking one simple question early in the relationship with the prospective clients. Are they any other advisors you would like to have involved in this decision- making process? This question demonstrates a commitment to the clients’ best interest as well as a willingness to be a partner with the clients’ “circle of advisors”. Remember, your success is dependant upon your ability to build great business relationships; consequently, you should always be looking for opportunities to meet and serve new people. Always do what is in the clients’ best interest.

31. © 2011, National Association of Health Underwriters www.nahu.org Case Study #2 Agents “A” and “B” are both independent agents working in the group health market. Agent “A” has found himself in a competitive situation with agent “B” three times over the last six months. In each case, when agent “A” has met with the prospective clients, it becomes apparent that agent “B” has misrepresented the features and benefits of the plans offered by the XYZ Insurance Company. Agent “A” knows this because he also represents XYZ Insurance Company and is familiar with their plans. In two of the three cases the clients have enrolled with agent “B” with what agent “A” believes is an unrealistic view of the plan’s benefits. This is very frustrating for agent “A” because not only has he lost the business, but also he believes that agent “B” has misled the clients. What should agent “A” do?

32. © 2011, National Association of Health Underwriters www.nahu.org Case Study #2 (Continued) The appropriate action is not as clear as it may seem. If we keep our focus on building relationships, however, here are some possibilities. First, let’s consider the prospective client. Even though agent “A” is not the “writing agent”, that doesn’t mean he can’t offer information. Remember, if you provide value, you will be rewarded. Agent “A” could present the client with marketing materials from company XYZ and highlight the commonly misunderstood features or benefits. This information would be valuable to the benefits administrator.

33. © 2011, National Association of Health Underwriters www.nahu.org Case Study #2 (Continued) Second, agent “A” could also make himself available as a resource for future questions or issues. Both of these actions would demonstrate the agent’s commitment to the client’s best interest and develop the agent’s relationship with the prospective client, thus positioning agent “A” for next year’s renewal. Next let’s consider agent “A’s” possible actions with respect to company XYZ and agent “B”.

34. © 2011, National Association of Health Underwriters www.nahu.org Case Study #2 (Continued) If agent “A” assumes that company XYZ and agent “B” share his desire to serve the client’s best interest, and if agent “A” is committed to maintaining the integrity of industry he works in, here are a few possible actions. First, agent “A” could contact the local sales representative for company XYZ and suggest additional training may be needed for agent “B” with regard to their company’s plan designs. This action demonstrates that agent “A” values his relationship with company XYZ and is committed to help the company maintain its reputation in the field.

35. © 2011, National Association of Health Underwriters www.nahu.org Case Study #2 (Continued) Second, to raise the level of commitment to professionalism in the industry, agent “A” could send agent “B” information regarding the professional development opportunities provided by local, state or national trade associations (Like NAHU). By inviting agent “B” to participate in these activities, agent “A” is helping to create a healthy and competitive environment committed to serving the client’s best interest.

36. © 2011, National Association of Health Underwriters www.nahu.org Case Study #3 Life and health agent John Q. Salesman receives a phone call from Bob K., an employee of ABC Corporation. John has worked with ABC Corporation as their group health agent for several years, and occasionally the benefits administrator has referred employees directly to him for assistance. Bob (the employee) asks a few questions regarding COBRA, and during the course of the conversation, he discloses, in confidence, that he is considering resigning from his current job. A few days later John (the agent) gets a call from the benefit administrator about a rumor in the office that Bob (the employee) was thinking about quitting. The benefit administrator wanted to know if John (the agent) new anything about it.

37. © 2011, National Association of Health Underwriters www.nahu.org Case Study #3 (Continued) Question ? What should John (the agent) do?

38. © 2011, National Association of Health Underwriters www.nahu.org Case Study #3 (Continued) As life and health insurance agents we are trusted and confidential advisors. We have a responsibility to the clients we serve to keep their best interest in mind and to hold sensitive information in confidence. This is even more critical in light of HIPAA privacy regulations regarding patient privacy. While this information regarding Bob’s future employment may not be considered protected health information, John still has a responsibility to keep information disclosed to him confidential

39. © 2011, National Association of Health Underwriters www.nahu.org Case Study #3 (Continued) It would be appropriate to make the following statement to the benefits administrator, “ As a Life and Health agent, I have an obligation to maintain client confidentiality and take that responsibility very seriously. This responsibility extends to all the people with whom I consult, including the employees of my corporate clients. My professional reputation is dependent on my ability to develop the trust and confidence of the people I serve, and I hope you can appreciate my commitment to the principle of confidentiality.”

40. © 2011, National Association of Health Underwriters www.nahu.org Case Study #3 (Continued) This statement works to develop the relationship with the benefits administrator by emphasizing John’s commitment to conduct himself in a professional manner while maintaining the confidence Bob (the employee) has placed with him. Remember: “If you don’t have something nice to say, then don’t say it.”

41. © 2011, National Association of Health Underwriters www.nahu.org Other Ethical Issues for the Insurance Professional Conflicts of Interest As an agent in the insurance and financial services industry, you have to identify and disclose any conflicts of interest. A conflict of interest can best be described as a situation where you, the agent, find yourself in a position where you are representing or advising “clients” who have opposing needs, goals, or interests. To best serve the clients you represent, you need to identify and disclose, as soon as possible, any conflict of interest you discover.

42. © 2011, National Association of Health Underwriters www.nahu.org Examples of a Conflict of Interest 1.You serve on a board or committee, for a friend’s company, that has the authority to make purchasing decisions for the products you sell. Their accountant recommends key man insurance. You are a decision-maker and you represent a life insurance company that could fill this need. Conflict of Interest!

43. © 2011, National Association of Health Underwriters www.nahu.org Examples of a Conflict of Interest 2.You feel pressure to get a client’s case underwritten. Your client indicates that he wants to move to another carrier because of increased costs. The owner says if costs don’t come down he’ll discontinue the insurance. In reviewing the applications you suspect medical information has not been disclosed. You are caught between your obligation to provide accurate information to the carrier and the client’s desire to reduce cost. Conflict of Interest!

44. © 2011, National Association of Health Underwriters www.nahu.org Examples of a Conflict of Interest 3.You feel pressure to sell a product even if it is not in the client’s best interest because your agency is looking for a big bonus from XYZ company; but to get that bonus a certain number of cases have to be placed with XYZ company. The XYZ company’s product does not meet the needs of your client but you are encouraged to sell it anyway. Conflict of Interest!

45. © 2011, National Association of Health Underwriters www.nahu.org Resolving Conflicts of Interest First, recognize that the conflict exists. Second, disclose the conflict to the people involved. Finally, search for a solution that does not compromise your professional integrity.

46. © 2011, National Association of Health Underwriters www.nahu.org Corporate Governance For the purpose of our discussion, a corporation is any entity created by an individual or group of individuals for the purpose of engaging in or developing the insurance industry. Within our industry there are many different types and sizes of corporations. In all cases, large or small, it’s people who lead and govern these corporations –people whom we (the consumers, employees, agents, vendors and stockholders) count on to provide us with direction and ethical standards. While issues, objectives and opportunities are different from one corporation to another, there are two common goals that all corporate leaders should consider to ensure ethical practices.

47. © 2011, National Association of Health Underwriters www.nahu.org Corporate Governance (Continued) Goal/Challenge #1 – Balancing the Needs of All Stakeholders All corporations serve the needs of multiple stakeholders, defined as any individual or group of individuals who interact with and benefit from the activities of a particular corporation.

48. © 2011, National Association of Health Underwriters www.nahu.org Corporate Governance (Continued ) Common stakeholders include: SStockholders EEmployees RRepresentatives CCustomers VVendors NNeighboring communities

49. © 2011, National Association of Health Underwriters www.nahu.org Corporate Governance (Continued) The common element for all stake holders groups is that, in each and every case, the stakeholder is in a mutually beneficial relationship with the corporation:  Stockholders provide capital in exchange for profits.  Employees provide labor in exchange for compensation.  Customers provide payment in exchange for products and services.  Vendors provide products and services in exchange for payment.  Communities provide public services in exchange for economic development.

50. © 2011, National Association of Health Underwriters www.nahu.org Corporate Governance (Continued) A corporate leader interested in building an ethical business must keep each of these stakeholders’ interests in mind at all times. Impossible? Keep in mind that these relationships are “mutually beneficial.” That is to say, “benefits to one group of stakeholders should by design be benefits to all of the other stakeholder groups as well.

51. © 2011, National Association of Health Underwriters www.nahu.org Corporate Governance & Ethics Invariably ethics and integrity come into play when corporate leaders take actions and set policies that exploit one stakeholder group for the benefit of another. For example:

52. © 2011, National Association of Health Underwriters www.nahu.org Corporate Governance & Ethics (Continued)  Using inferior materials in an effort to cut costs and boost profits for the benefit of stockholders without regard to the needs of the customer.  Offering excessive bonuses and stock option plans to employees without regard to the impact on stockholder return on investment.  Damaging or polluting the local community’s environment in an effort to maintain current price levels for customers on the other side of the world.

53. © 2011, National Association of Health Underwriters www.nahu.org Corporate Governance & Ethics (Continued) Goal/Challenge #2 – Balancing Long Term vs. Short Term Objectives Actually this is an extension of the first challenge…. “to balance the needs of all stakeholders” because it is the long and short term needs of each stakeholder group that come into question. The ethical breach usually occurs when the pressures associated with meeting short-term demands cause corporate leaders to take actions or set policies that undermine the company’s or stakeholders’ long-term objectives. A classical example of this indiscretion is “cooking the books” in order to achieve a quarterly profit or influence a lender when cash is tight.

54. © 2011, National Association of Health Underwriters www.nahu.org Corporate Governance & Ethics (Continued) A corporate leader’s resolve and integrity is critical in these situations! To govern effectively, corporate leaders must give careful consideration to long and short term objectives, avoiding the temptation to do what is less confrontational or convenient, always standing firm for what they believe is right. Clearly corporate leaders set the tone for the ethical behavior within the companies they govern. This responsibility is critical to the company’s success especially in the insurance and financial services industry where trust and confidence are the cornerstones for long-term success.

55. © 2011, National Association of Health Underwriters www.nahu.org Health Care Morality vs. The Free Market System Striking a balance between providing access to quality healthcare and managing the day-to-day concerns of a company in a competitive marketplace may be the most difficult issue for the insurance professional. On the one hand, consumers have asked the insurance carriers to keep the cost down. One of the ways to accomplish this goal is to establish contractual relationships with providers and encourage patients to use the specified healthcare providers in exchange for a discount on services provided.

56. © 2011, National Association of Health Underwriters www.nahu.org Health Care Morality vs. The Free Market System (Continued) BUT when a person is involved in a medical emergency, the idea of delaying care solely for economic reasons doesn’t make sense. Consequently, the insurance professional finds himself stuck in the middle of a conflict between healthcare moralities and the demands of the free market system. We spoke earlier about the responsibility of balancing the needs of all stakeholder groups. In this case the healthcare and financial needs of a customer are juxtaposed against the insurance company’s desire to provide a competitively priced product with a good return on its investment for its stockholders.

57. © 2011, National Association of Health Underwriters www.nahu.org Looking for the Answers About Conflict A Five-Step Process for recognizing, managing and resolving conflict: 1.Recognition – The first step in resolving conflict is to recognize its presence. Conflict resolution involves acknowledging that there is conflict and then making a commitment to resolve it. 2.Disclosure – Once recognized, all parties must be aware of it and understand it thoroughly which creates the positive environment necessary for finding solutions.

58. © 2011, National Association of Health Underwriters www.nahu.org The Five-Step Process in Conflict Resolution (Continued) 3.Solution – Corporate leaders are responsible for searching out creative solutions and then building a consensus among the parties involved on the best course of action. 4.Communication – Once the parties have identified a solution and a course of action, effective communication and training are the keys to the successful implementation of any change.

59. © 2011, National Association of Health Underwriters www.nahu.org The Five-Step Process in Conflict Resolution (Continued) 5.Feedback – Since it is difficult to anticipate all of the potential effects of a change in policy, procedure or value system, corporate leaders should seek out feedback from all parties involved in the original conflict. Careful attention must be paid to ensure that everyone is making progress.

60. © 2011, National Association of Health Underwriters www.nahu.org The Five-Step Process in Conflict Resolution (Continued) While the responsibility of managing the inherent conflict between Health Care Morality and The Free Market System falls on corporate leaders, all insurance professionals have an obligation to contribute to this process. Through the collective efforts of all insurance professionals effective solutions can be designed and implemented.

61. © 2011, National Association of Health Underwriters www.nahu.org Social Responsibility As life and health insurance agents, we possess information and expertise (VALUE) the average person does not possess. We are the trusted advisors when it comes to insurance and financial matters. Consequently, we have an individual and collective responsibility to always look out for our clients’ best interests, share our good fortune and offer our expertise within the communities we work.

62. © 2011, National Association of Health Underwriters www.nahu.org Three Suggestions for Social Responsibility 1.Education – Our own education should be one of our primary responsibilities. We possess information the average prospect/client needs and typically does not understand. Unfamiliarity with everything from terminology and operating procedures to their rights and responsibilities can be very intimidating and frustrating for today’s consumers.

63. © 2011, National Association of Health Underwriters www.nahu.org Efforts in Social Responsibility (Continued) Consider several opportunities to relieve this prospect/client stress through the following opportunities: One-on-one meetings with benefit administrators or owners. One-on-one conversations with a client’s employees, your neighbor or colleague. Writing a newsletter for prospects and clients.

64. © 2011, National Association of Health Underwriters www.nahu.org Efforts in Social Responsibility (Continued) Accepting an invitation to speak at a local church, service club, Rotary, public or civic organization. Putting on a seminar for the local chamber of commerce. If we consider education as one of our primary responsibilities, opportunities to educate and share our expertise appear all around.

65. © 2011, National Association of Health Underwriters www.nahu.org Efforts in Social Responsibility (Continued) 2.Sharing your time, talent and treasure – Consider this: As an agent who benefits from the work of trade associations, like NAHU and other industry groups it is in our best interest to support their efforts with our time, talent and treasure. Join NAHU Volunteer to serve on a committee Become an advocate for the development and preservation of our industry Get involved!

66. © 2011, National Association of Health Underwriters www.nahu.org Efforts in Social Responsibility (Continued) 3.Be a Humble Expert – As the result of our ongoing training and daily activity, insurance agents become the providers of important advice to our clients. While our efforts to educate clients and the general public certainty help to create informed consumers, we will always have more expertise than the average person has; consequently, they will view us as an advisor.

67. © 2011, National Association of Health Underwriters www.nahu.org Efforts in Social Responsibility (Continued) In order to be socially responsible, the agent must accept this responsibility. This means we must maintain a constant eye on the client’s best interest and never use our expertise as a source of power to manipulate a client for personal benefit. As we continue to develop knowledge and expertise we also take on the additional responsibility of conducting our business with integrity expected of a trusted advisor.

68. © 2011, National Association of Health Underwriters www.nahu.org Efforts in Social Responsibility (Continued) Beyond our professional obligation, being socially responsible also provides the opportunity to bring meaning to the work we do. Selling products and making a commission is on the first level of success. Making a difference in the lives of the people we serve and for the communities in which we work and live is what makes the complete insurance professional.

69. © 2011, National Association of Health Underwriters www.nahu.org Privacy HIPAA As life and health insurance agents, we are exposed to and trusted with personal medical information from the clients we work with. It has always been good business practice to view this type of information as confidential. In 1996, however, the federal government passed the Health Insurance Portability an Accountability Act (HIPAA) that provides specific rules for how we must protect personal medical information. It is no longer an option.

70. © 2011, National Association of Health Underwriters www.nahu.org Privacy (Continued) Who is required to comply with HIPAA? 1.Covered Entities – A Covered Entity includes health plans, healthcare clearing houses and most health care providers. (Includes employer group health plans).

71. © 2011, National Association of Health Underwriters www.nahu.org Privacy (Continued) 2.Business Associates – A Business Associate includes a business or an individual who works with a Covered Entity and creates, uses, receives or discloses protected health information. 3.Employer and Other Sponsors of Group Health Plans – Includes all employers that receive protected health information as well as other organizations that sponsor group health plans e.g. a union plan.

72. © 2011, National Association of Health Underwriters www.nahu.org Privacy (Continued) Protected Health Information HIPAA defines as any individually identifiable health information that is created or received by a healthcare provider, health plan, employer or healthcare clearinghouse. (PHI includes a person’s name and address.)

73. © 2011, National Association of Health Underwriters www.nahu.org Privacy (Continued) HIPAA requires that a group health plan does not disclose this information except for the following permitted or required disclosures: Permitted Disclosures – To the Individual. To carryout treatment, payment or healthcare operations. With a valid authorization.

74. © 2011, National Association of Health Underwriters www.nahu.org Permitted Disclosures (Continued) Under limited circumstances, when the individual has the opportunity to agree or object to the use or disclosure. For defined “public good function” and for very limited “marketing” purposes. Disclosure of protected health information to business associates, with satisfactory assurance that the business associate will adequately safeguard the information.

75. © 2011, National Association of Health Underwriters www.nahu.org Privacy (Continued) Required Disclosures – To an individual seeking to access their protected information. To an individual seeking an accounting of disclosures of their protected health information. When required by the Secretary of HHS to investigate or determine the health plan’s compliance with the regulation.

76. © 2011, National Association of Health Underwriters www.nahu.org Privacy (Continued) Business Associates – As life and health agents, we fall under the definition of a “Business Associate”; consequently we are required to enter into to a “BA” contract with the health plans with which we work. These contracts are required to have the following provisions:

77. © 2011, National Association of Health Underwriters www.nahu.org Business Associate Contract Provisions Establish the permitted uses and disclosures of protected health information. Provide that the business associate will not use or further disclose the information other than as allowed under the contract or required by law. Provide that the business associate will use appropriate safeguards to prevent the unauthorized disclosure of information.

78. © 2011, National Association of Health Underwriters www.nahu.org Business Associate Contract Provisions (Continued) Require the business associate to report to the health plan any unauthorized uses or disclosures of the information. Ensure that any agents or subcontractors to whom the business associate discloses protected health information agrees to these same restrictions. Provide the business associate will make protected health information available for inspection.

79. © 2011, National Association of Health Underwriters www.nahu.org Business Associate Contract Provisions (Continued) Provide the business associate will make protected health information available to amend and that the business associate has the capacity to make amendments. Provide that business associates can provide for an accounting all of their disclosures of protected health information.

80. © 2011, National Association of Health Underwriters www.nahu.org Business Associate Contract Provisions (Continued) Require that the business associate agrees to make its internal practices, books and records available to the Secretary of HHS for inspection, if necessary. Provide that the business associate agrees to return or destroy, if feasible, all information and limit future uses and disclosures to those purposes that make its return or destruction infeasible. Authorize the termination of the contract if the business associate has violated a material term of the contract.

81. © 2011, National Association of Health Underwriters www.nahu.org Privacy (Continued) GLBA (Gramm-Leach-Bliley Act of 1999) – This law put into place privacy requirements for the protection of consumer’s non-public, personal financial information. It is specifically designed for and directed at professionals working within the financial services industry. Your first step in determining the impact of GLBA on you business is to determine if you receive information that is protected by the law.

82. © 2011, National Association of Health Underwriters www.nahu.org GLBA (Continued) The types of information that GLBA protects is: 1.Information from an individual seeking to obtain an insurance product. 2.Information that is financial in nature. 3.Information that relates to a personal, family or household product or service. 4.Information that is non-public. 5.Information that identifies the individual.

83. © 2011, National Association of Health Underwriters www.nahu.org GLBA (Continued) Each individual state’s government has the job of enforcing the GLBA requirements within the insurance industry. While efforts have been made to promote consistency from state to state, the reality is that each state’s compliance measures can be different. As a life and health agent or broker it is our responsibility to familiarize ourselves with the compliance measures for each state in which we do business.

84. © 2011, National Association of Health Underwriters www.nahu.org F.Y.I. The information presented in both the HIPAA & GLBA sections of this presentation are not intended to be complete descriptions of these regulations. In the context of this ethics course, the intent of this discussion on HIPAA & GLBA was to present an overview of this important legislation. As insurance professionals, it is our responsibility to conduct our business in accordance with state and federal laws.

85. © 2011, National Association of Health Underwriters www.nahu.org Ethics – A Three Question Test When you find yourself in a situation where there are more than one possible courses of action and you are having trouble deciding which action would produce the most ethical result, consider these questions: 1.Is the action legal? If there is any question as to the legality of a potential act, we need to seek legal counsel.

86. © 2011, National Association of Health Underwriters www.nahu.org Ethics – A Three Question Test (Continued) 2.Would I want an account of my actions published in the local newspaper? If the thought of a public review of your actions creates any reservations or concern, the action you are considering is probably not the best solution. Continue to search for better alternatives – the alternatives you would be proud to share with your family, friends and community.

87. © 2011, National Association of Health Underwriters www.nahu.org Ethics – A Three Question Test (Continued) 3.Does this action support my commitment to building long-term relationships? If the action your considering creates a win/win situation for everyone involved, then move forward. If there’s a chance that your action will damage a relationship, reconsider your position and look for better alternatives. Remember: for this discussion, “action” includes both the actions we take AND the actions we don’t take. A lack of action can be damaging and to do nothing is still a choice you make.

88. © 2011, National Association of Health Underwriters www.nahu.org Putting It All Together Nature of Learning If our end goal is to develop better and more productive business relationships, it makes sense that we act differently in the future than we have in the past. If we continue to do what we’ve always done, we continue to get the same results. What we are talking about is learning new behaviors. How do we learn? What’s the process?

89. © 2011, National Association of Health Underwriters www.nahu.org Nature of Learning (Continued) Four categories of information: 1.Information you don’t know and have absolutely no idea that you don’t know it. We are completely oblivious to it. 2.Information you don’t know but realize you don’t know it. 3.Information you know about. 4.Information that you thoroughly understand and have mastered.

90. © 2011, National Association of Health Underwriters www.nahu.org Nature of Learning (Continued) Simply stated, learning is what we call it when our mastery of information moves from one category to the next. As you explore this process, consider four valuable insights to teaching and learning.

91. © 2011, National Association of Health Underwriters www.nahu.org Nature of Learning (Continued) Four Insights to teaching and learning: 1.There is a big difference between knowing about a piece of information and really understanding it. Most of us know that French fries are bad for us, but we still eat them. The next time you catch yourself saying, “They should know better” or “I should know better,” remember that they and you do know better; you just haven’t gotten it.

92. © 2011, National Association of Health Underwriters www.nahu.org Nature of Learning (Continued) 2.The only way you can move a piece of information from something you know about to something you get is through personal experience. You get it through trial and error, or through practice.

93. © 2011, National Association of Health Underwriters www.nahu.org Nature of Learning (Continued) 3.Learning is cumulative. Each time you move a piece of information through this process and just when you think you are beginning to really understand, you look up and out on the horizon, and there it is. Is it possible that there are levels beyond our current level of understanding that we are not aware of? Absolutely! Learning is not only cumulative but a life long process.

94. © 2011, National Association of Health Underwriters www.nahu.org Nature of Learning (Continued) 4.When a person has one of these break through experiences and a piece of information moves into the realm of something they really get, their whole world changes. What used to seem impossible becomes effortless. What used to take forever now can happen in an instant. What used to be unthinkable becomes a reality. “Getting it” is the difference between knowledge and wisdom.

95. © 2011, National Association of Health Underwriters www.nahu.org Moment of Truth Everyday we confront circumstances or situations about which we have to make choices – choices on what to say, what to do and how to act. These situations become our moments of truth, moments in which our character shines through. It is these moments that provide us with the opportunity to learn and grow.

96. © 2011, National Association of Health Underwriters www.nahu.org Putting It All Together (Final) Behind our titles, business objectives and our professional identities we are just people, your clients are just people and people are just people. If you want to build great business relationships, start with the great character lessons of your youth, the basic principles for getting along with others. Translate these lessons into business principles and then use them to guide your actions in the business world.

97. © 2011, National Association of Health Underwriters www.nahu.org Where Do We Go From Here? If you’re interested in building or developing your business relationships: 1.Surround yourself with people who understand and live by these relationship-building principles. 2.Take on the task of teaching these relationship-building principles. 3.Start practicing them today! The only way to move these concepts and ideas, on ethics, from information you know about to information you live by is through practice, trial and error.

98. © 2011, National Association of Health Underwriters www.nahu.org Review National Association of Health Underwriters (NAHU) Code of Ethics: To hold the selling, service and administration of health insurance and related products and services as a professional and public trust and do all in my power to maintain its prestige. To keep paramount the needs of those whom I serve. To respect my clients' trust in me, and to never do anything which would betray their trust or confidence. To give all service possible when service is needed.

99. © 2011, National Association of Health Underwriters www.nahu.org NAHU Code of Ethics (Continued) To present policies factually and accurately, providing all information necessary for the issuance of sound insurance coverage to the public I serve. To use no advertising which I know may be false or misleading. To consider the sale, service and administration of health insurance and related products and services as a career, to know and abide by the laws of any jurisdiction Federal and State in which I practice and seek constantly to increase my knowledge and improve my ability to meet the needs of my clients.

100. © 2011, National Association of Health Underwriters www.nahu.org NAHU Code of Ethics (Continued) To be fair and just to my competitors, and to engage in no practices which may reflect unfavorably on myself or my industry. To treat prospects, clients and companies fairly by submitting applications which reveal all available information pertinent to underwriting a policy. To extend honest and professional conduct to my clients, associates, fellow agents and brokers, and the company or companies whose products I represent.

101. © 2011, National Association of Health Underwriters www.nahu.org Thank You