Doing the right thing: now more than ever, the insurance industry needs to be a model of corporate ethics. (Property/Casualty: Underwriting Insight).

No sooner did the dust from the Enron scandal begin to settle than another shock wave rippled through the business world. WorldCom admitted concealing $3.8 billion in accounting expenses, resulting in the largest bankruptcy in U.S. history.

As if this wasn't enough to shake the already unsteady stock market and weakened faith in corporate America, more news followed. Adelphia executives were publicly arrested for hiding $2.3 billion in debt and misusing company funds. Even media giant AOLTime Warner Inc. has been under investigation for improperly inflating revenues.

Fallout from recent fraudulent activities has been great: the constant media frenzy; stock market jitters, tougher federal legislation for white-collar crimes, and lost 401(k)s. But the largest loss and the hardest to repair may be the public's growing lack of faith in American corporations and their ability to play by the rules.

Perhaps after hitting rock bottom, a renewed sense of corporate responsibility and dedication to ethical behavior will be on the rise. However simple this may seem, it's time to get back to basics and restore faith in our ability to do what is right.

The recent focus on ethics may be a new concept for some, but ethics has been a core value of the CPCU Society since 1945. Fortunately, insurance companies have been ahead of the curve for a long time through support of their employees' involvement with the society. This commitment has created a valuable payoff for employers, because being an advocate of the Chartered Property Casualty Underwriter designation means standing behind high ethical standards.

Society members take their commitment to upholding high ethical standards very seriously. Members promise to follow a code of professional ethics, which is closely monitored by the society. Additionally, CPCU members are encouraged to participate in ethics-related activities throughout the year. At any given time, there is sure to be a CPCU chapter or members giving a presentation on ethics or incorporating this topic into their activities.

There is no dispute that the need for corporate reform is real, and the need to follow through is urgent. The business world needs to take a realistic look at how it incorporates ethics into everyday business, and there are some simple ways to do this. For instance, make an example of ethical behavior, and create a zero-tolerance policy for violations against basic moral guidelines. Presidents and chief executive officers need to demonstrate solid moral principles and create a corporate culture based upon this. Many educational resources on ethics exist, and pursuing as many of these as possible promotes the importance of ethics.

Another means to implement corporate ethics is to set guidelines or rules that help create a standard for moral behavior. Excerpts from the CPCU Society's code of professional ethics offer some basic concepts: Place the public's interest above your own; obey all laws and regulations; assist in maintaining and raising the professional standards of the insurance business; and strive to maintain dignified and honorable relationships with those whom you serve. If we abide by these types of ethical guidelines as an industry, we can set a positive example.

Guidelines can be useful, but at times the logistics of dealing with a conflict and resolving it in an ethical manner can be tricky. The Institute for Global Ethics outlines how to deal with one ethical challenge, the moral temptation of choosing right over wrong. Asking the following questions can help: Is it legal? Does it meet professional standards? Does it meet the gut-feeling test? Would it be OK to see this on the front page of a newspaper? Would my role model do it? Taking the tune to think through an ethical dilemma with questions such as these can help establish a baseline for dealing with troublesome situations.

As president of the CPCU Society, I am proud of the value that the organization places on ethics and our commitment to making it a part of what we do. Our 28,000-plus members, who represent all parts of the property and casualty industry, including claims, risk management, underwriting and more, set a positive example every day through their ethical behavior. CPCUs, or any other insurance industry professional, are not immune to the moral challenges of the business world. But by remaining dedicated to doing what is right, we as an industry can strive to be a model of corporate ethics.

James R. Nau, the president of the CPCU Society, is general manager, residual markets, for the National Council on compensation Insurance, Boca Raton, Fla. He can be reached at [e-mail].