In 1996, the life and health insurance industry founded the Insurance Marketing Standards Association (IMSA) to strengthen consumer trust and confidence in the marketing of its products. The organization is voluntary and requires its members to meet certain standards, particularly in sales practices.
The early days of IMSA were a bit bumpy and I–along with others–was very critical of the way it was executing its mission, and I said so in this column. I attended one of the first classes to train IMSA assessors, the group that was to monitor companies' adherence to their published standards. My early criticism centered on the fact that most of the criteria for company membership in IMSA dealt with internal procedures and processes relating to policyholder service. Slow service may be aggravating, but it would have to get awfully bad before it would be regarded as unethical.
The primary target where ethics plays a part is the sales process, which includes advertising content, training of producers, sales material and supervision. In the training session I attended, almost all of the prospective assessors in attendance were employees of accounting firms. Based upon the questions and comments coming from them, it did not appear that they had any knowledge of what took place in the field–where company and consumer actually meet, usually through an agent intermediary. How can you judge what you don't understand? I believe these were valid concerns, and at the time I was critical, it was justified.
More recently, at a meeting with Brian Atchinson, IMSA president, and Friar Fitzgerald, executive vice president for corporate relations, I was delighted to learn that many, if not all, of these concerns have been addressed. In particular, assessors must now have industry experience to be approved by IMSA. It was clear to me from their comments that use of accounting firms in monitoring the sales process had not been successful. In reviewing the material they left with me, it would appear that today IMSA is a more forward-thinking organization than it was 10 years ago and is focusing on the critical areas where ethical standards are needed. To wit–the marketplace.
Brian and Friar were kind enough to ask if I had any input to further improve the organization. My primary input was to congratulate them for the progress they had made and to urge continued emphasis on sales practices–not just at the agent level, but all the way up the corporate ladder. Too often when abuses occur at the point of sale, the culprit singled out is the agent, and that is the end of it. More attention should be given to who trained the agent to do the "the wrong thing" and what role the top brass played in either encouraging or tolerating the practice.
A situation that exists today will, I believe, illustrate my point and will also show the way issues in our business evolve.
