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Ethics: Constraint or Advantage?

Publication date: September 7, 2017 | Last update: April 26, 2020

When asked about the legalities in their profession, only 57% of the agents, brokers, and claims adjusters1 spontaneously mention their code of ethics. Deontological ethics often have a negative image of being associated with obligations, constraints, and costs. However, ethics are just as useful for representatives as for the firms where they work. Following is an overview of the advantages associated with integrating ethics compliance into company culture and professional practise.


Professional liability lawsuits can be avoided by explaining the exclusions laid out in the insurance contract when it is underwritten2 and by providing insured individuals the necessary explanation3 to help them understand the settlement of a claim and the services provided to them. “Ethics brings together the rules of practise that delineate the professional duties of damage insurance representatives and expertise in claims adjustment,” explains Ms. Jannick Desforges, ChAD Director of Institutional Affairs and Compliance. “They dictate appropriate and inappropriate behaviour. For example, the Code of Ethics prohibits representatives from using false representation, engaging in conflicts of interest, and negligence.”

Ethics must be at the core of the daily concerns of all professionals. To facilitate integration, the ChAD has created a commented version of its Codes of Ethics (for representatives and for claims adjusters) to which its members are subjected.


The perceptions Quebeckers with regard to professionals are positively influenced by the quality of service they offer and their human qualities4. By framing the relationships of professionals with their colleagues, the insurers, the clients, the public, and the regulatory bodies, ethics contributes to increasing professionalism and consequently, the degree of trust in the industry. “Certified professionals should not only have specialized knowledge, they should also demonstrate their morality and trustworthiness so that the public can rely on them,” states Louise Hamel, Claims Adjuster and Unit Claims Manager, Internal Indemnity at Intact Insurance.

Bernard Chagnon, Damage Insurance Broker and President of Univesta Insurance and Financial Services, adds: “Ethics allows us to establish clear, uniform guidelines throughout the industry. It therefore reassures the public by protecting them and providing them with benchmarks of the expectations it could have with regard to the integrity, probity, fairness, and confidentiality of professionals, all of which are prescribed in the Code of Ethics.”

Ethics also represents an intrinsic element of protecting the public by the responsibility that it gives professionals. As criminologists say, one of the biggest fears of fraudsters is being caught. However, the negative consequences (damage to reputation, loss of assets, etc.) have a greater negative effect on professionals than on the company. This is one of the findings from the conference on credible deterrence, organized by the Autorité des marchés financiers in November, 2015. Upholding and enforcing ethics obligations and consequently, the importance of individual responsibility, are essential when it comes to protecting the public5. These are also essential aspects for the representatives who hold integrity at the centre of their profession6. Moreover, these ethical obligations are the same for everyone, no matter the company that certified professionals work for. The firms are therefore at an advantage if they implement and promote a culture of compliance with these professional practises.


For Ms. Hamel, “ethics is the opportunity to improve employees’ skills and maintain a professional mindset that can only benefit the company.” The requirements for keeping permits, follow-ups and production reports are not only an obligation, they can also improve firm practises. “For example, it is possible to produce information capsules addressed to the employees reminding them of internal procedures and the ethical obligations they have,” she adds.

Moreover, “nowadays, consumers are more aware of what resources they have when it comes to disputes and denunciation,” continues Ms. Hamel. “It is good that they are informed and it also leads to the companies acting with more caution if they want to protect their reputations.” Reputation plays an important role for both clients7 and competition .8 Ethics could also have an impact on employee recruitment and retention9. Therefore, it is to the company’s advantage to trust in ethics.


Sometimes firms see compliance as a set of costs. However, “investment in ethics generates indirect savings,” says Mr. Chagnon. It’s true that companies have to pay for their employees to be trained. However, it also “generates more appropriate behaviour in employees and automatic reflexes that enable them to protect the individuals and the company against inappropriate actions. By reducing the number of complaints filed, the company can also prevent an increase in the cost of its professional liability insurance premiums.”

“It all depends on the size of the company and its resources but it does seem essential to appoint an ethics officer, either as a part-time or full-time position,” continues Mr. Chagnon. “Firms that do not have the opportunity to benefit from ChAD inspections can hire an external company to carry out regular audits of their practises.” According to Chagnon, all firms will benefit from an ethics audit and should receive recommendations about what measures to implement, if necessary. “It would be advisable for the ChAD to offer this type of inspection,” suggests Mr. Chagnon. It could include advice aimed at improving practises at the firms, such as an ombudsman service. In fact, the Society of Corporate Compliance and Ethics recently wrote that the best way for companies to prevent and reduce certain individual and institutional risks was to have a compliance program and a staff awareness program about the importance of integrating this culture into the company.10

For firms, the pros of complying with the Code of Ethics largely outweigh the cons. As a result, they build and promote a culture of compliance amongst their employees and in their day-to-day activities.

1. Study of ChAD members, Léger/ChAD telephone survey of 1,000 certified professionals from the damage insurance sector in Quebec carried out in February 2015.
2. Code of Ethics for Damage Insurance Representatives, commented version, Article 37(6)
3. Code of Ethics for Claims Adjusters, commented version, Article 6
4. Perception of the damage insurance industry, Léger, 2011.
5. See specifically “Yates Memorandum” from the American Ministry of Justice published in September 2015, which reiterates the importance of individual responsibility in the fight against fraud.
6. Express survey on professionalism taken by the ChAD with Survey Monkey in 2015.
7. Gustavson Brand Trust Index, Université de Victoria
8. Les occasions que présente la réglementation, Deloitte Canada
9. Also see Pratiques d’attraction, de mobilisation et de rétention de la main-d’œuvre, Emploi-Québec Mauricie, 2012
10. Frank Sheeder. “DOJ’s pursuit of individual liability for corporate misconduct: The Yates Memo,” Compliance & Ethics Professional, nov. 2015, p. 71-76.