Cedric Stephens | Verifying real expertise in insurance
Today’s article was inspired by two advertisements.
One occupied a full page in the business section of The Sunday Gleaner published November 21. It was sponsored by a life insurer and featured photographs of 18 persons – eight men and 10 women. They were dressed in business attire. Their names and telephone numbers were listed. These persons were described as ‘your health insurance experts’ who were offering to conduct free ‘financial consultations’.
What struck me immediately was that the ad lacked information to prove that these individuals were indeed health insurance experts — other than the advertiser’s assertion to that effect. Incidentally, when I appeared in court a few years ago as an expert witness, I had to demonstrate in writing and orally before a judge why my testimony should be accepted as an insurance subject matter expert.
Section 146 of the Insurance Act 2001 states: “An insurance company or insurance intermediary shall not knowingly: (a) make or permit to be made any statement; or (b) issue, or permit to be issued, any advertisement, statement, circular, descriptive booklet, or other document, which is misleading or likely to mislead the public, in relation to the insurance business”.
I checked an online source to find a definition for an expert. My gut instincts are not always correct. The source said an expert is “somebody who has a broad and deep understanding and competence in terms of knowledge, skill, and experience through practice and education in a particular field”. Volume I of my Shorter Oxford English Dictionary offered the following meanings: ‘trained by practice, skilled; one whose special knowledge or skill causes him (or her) to be an authority; a specialist’.
Bestselling author of The Tipping Point and Blink, Malcolm Gladwell, in another of his critically acclaimed novels, Outliers the Story of Success, offered a theory about expertise which has since been debunked: the 10,000-hour rule. This is the number of hours of practice that is required in order to become a master of one’s craft. The insurance company ad contained no information to indicate that the 18 persons whose photographs were featured met any of the standards described in my randomly selected sources.
The second stimulus for this article was a full-page advertorial published in Fortune, a US magazine. It was about the importance that trust plays in all kinds of businesses. An advertorial, by the way, is an advertisement that gives information about a ‘product or service in the style of an editorial or an objective journalistic article’. The sponsor of the advertorial is a global company that has local offices and offers services to public and private clients. Trust is important in insurance transactions. In my piece, ‘Insurance risks and trust lessons from the pandemic’ that was published on September 25-26, I argued that the anti-vaccine segment of our population highlighted, among other things, a trust deficit in local institutions. Insurers should therefore take more effective steps to enhance their reputations if they wanted to build trust.
The opening paragraph of the advertorial was music to my ears. It read: “One thing that we see right now is how important trust has become – to conduct business, to do good business, and to stay in business. Customers, employees and other stakeholders are buying more than a product or service. They want to support purpose-driven companies that stand for something – something meaningful that goes beyond reputation, exceeds brand-building and leaves empty promises in the dust”.
Even though these words were written for consumption in North America, it is my strong belief that the expectations of local consumers are not different from those overseas when it comes to trust.
My research has found that there are no local institutions that offer specific or accredited courses in health insurance. Even though professional qualifications are the first item on the list of requirements that are described under Section 73 of the Insurance Act that applicants for a licence must satisfy, the law, in my judgement, does not place sufficient attention on training and development which helps to promote expertise. Regulation 112 speaks to the educational and experience qualifications for applicants for licences of several categories of workers “as prescribed by the regulator” but fails to specify standards.
The Financial Services Commission’s 2019 Revised Market Conduct Guidelines, which do not have the force of law, impose a duty on insurers and intermediaries “to develop, execute and maintain appropriate and up-to-date employee training policies, procedures and training manuals that are approved by the board of directors”. The guidelines, however, do not impose sanctions or penalties in the event of non-compliance.
In the United States, if you sell health insurance, you need to hold a health insurance licence. Explaining products to prospective clients, processing applications and signing clients up for policies are acts that fall under the definition of selling insurance. Becoming licensed generally requires the completion of pre-licensing education and testing and successfully passing a criminal background check.
In California, the Department of Insurance will issue an accident and health agent licence if you are at least 18 years old and have at least 20 hours of pre-licensing education. Maintaining licence means the completion of a minimum number of hours of state-approved continuing education within the licensing period.
“Trust is fragile. It can take a lifetime to earn, and a heartbeat to lose. Consumer and stakeholder expectations around trust have never been higher,” argues the advertorial. Ads about knowledge and expertise that do not offer information that persons in the streets can understand and raise questions about skills, education, and competence do not promote trust. The main page of the website of the 147-year-old professional institution, to which I belong, carries an image with the words, ‘Strengthening TRUST in our profession’.