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Considering what happens at the top of any organization, it is easy to conclude that employees will often emulate its leaders. This is evident when considering a particular airline whose employees are fun and helpful and comparing that airline to another whose employees seem not to care. It starts at the top. As the leadership goes, so goes the organization. So it is with insurance companies.

American Family is involved in an unethical business practice in Arizona. That business practice involves American Family rewarding its employees with legal titles they have not earned. For instance, Arizona law is clear: a representative of an insurance company can adjust claims, but the person adjusting claims may not claim the title of “adjuster” without passing an examination and submitting to an exhaustive background check. Specifically, the law states:

A person shall not act as or claim to be an adjuster unless licensed under this article.

To obtain a license as an adjuster a person shall apply to the director for the license and use the forms prescribed and provided by the director. The director shall issue the license to qualified persons on payment of the license fee prescribed in sections 20-167.

To be licensed as an adjuster, the applicant shall meet all of the following qualifications:
Be a person who is at least eighteen years of age.
Be a resident of this state or a resident of another state that allows residents of this state to act as adjusters in the other state.
Take and pass an examination given by or under the supervision of the director that reasonably tests the applicant’s knowledge of insurance and legal responsibilities as an adjuster and otherwise complies with section 20-321.02.”

Several years ago, a letter was written to American Family detailing the fact that American Family Claim Representatives could not use the title of adjuster just as a paralegal cannot call himself or herself an attorney, even though that person can participate in the legal process, or a nurse can-not call himself or herself a doctor despite being able to practice some medicine.

American Family’s response was to retain a lobbyist to allow claim representatives to use the adjuster title. Subsequently, a lawsuit ensued, designating the practice of an unlicensed adjuster purloining an adjuster title with consumer fraud. That lawsuit was settled out of court, and American Family has continued this practice.

Claim representatives of American families know they should not call themselves “adjusters.” This can create a climate of deception within the entire business. If a lie is promulgated at the top of an organization, it will filter itself down the entire chain of command.

In comparison, Chubb Insurance Company is a premier insurance carrier. The parent company of Chubb Insurance Corporation is Ace Ina Holdings, one of the largest insurers in the world.

An example of how Chubb Insurance Company handles claim losses would include accepting insurance claims being pursued by claimants. Most insurance policies include provisions that unequivocally state that perils resulting from “acts of war” will not be honored. It was the consensus at the time of September 11, 2001, that insurance companies most likely would deny claims based on act-of-war exclusions. If they did not deny claims, they would risk opening up serious dialog regarding issues as simple as defining those with commercial policies as reinsurers.

This entire act-of-war exclusion became a non-issue when Chubb Insurance became the first insurer to accept coverage. Chubb said it would not invoke act-of-war exclusions. Because Chubb leaders have set ethical standards that are a model in the insurance world, their employees act accordingly. Leaders of the organization set attitudes that filter throughout the organization. The organization's ethics is the environment created by the organization’s leadership.