The following scenario will suffice: 

Scenario

Kwesi is an Insurance Marketing Officer of ZH Insurance Company. His prospecting and sales activities are mainly within the premises of the Driver and Vehicle Licencing Authority (DVLA) Office at Kokrobite in the Greater Region of Ghana. He is often seen talking to people who come to the office to register their vehicles so he could have them obtain coverage for their motor vehicles. Typical as his schedules were, he encountered Dr Show, a veterinary Officer who wanted insurance for his newly registered SUV. He opted for a comprehensive cover which he (Kwesi) provided with accompanying insurance stickers and later with the policy certificate. 

Kwesi deliberately misrepresented details and benefits of the policy just to entice Dr Show to sign on to his motor insurance policy. For instance, Kwesi mentioned that the policy did not have exclusions that may vitiate claim payment, and in particular cited the example of theft and accident even three months after the expiry of the policy, that was to last 12 months. Dr Show was convinced and completed the proposal form and paid the premium outright after factoring in all the necessary acceptable discounts. 

He was given the assurance that the total value of the vehicle was going to be paid him in the event of even a scratch on the vehicle, while he still keeps the vehicle! Less than eight months after being on this motor policy, Dr Show was involved in an accident, thus damaging both headlights and the windscreen in the process. This was after he negligently crossed an oncoming vehicle that led him into a ditch. 

Making a claim

After the dust had settled, Dr Show, in the company of his wife, stormed the head office of ZH Insurance Company in Accra to make a claim. His understanding, and as far as the marketing officer had told him, was that the entire vehicle may not necessarily be replaced but the total initial value of the vehicle was going to be paid him. 

Sad for him, the company declined the claim, explaining that payment would be made for only the damaged parts— the two headlights and the windscreen together with other accompanying expenses incurred in the process of repairing the vehicle. 

Dissatisfied with the turn of events, Dr Show and his wife insisted that the Marketing Officer had assured him at the time of buying the policy that the slightest damage to the vehicle would attract the full payment of the vehicle at initial value while they still would keep the vehicle! Having come to terms with reality, the easiest conclusion they could draw was that the company had sent its ‘ambassadors’ with the intention to swindle customers.

Verifying from the marketing officer

After a long period of disagreement with the claimant, the claims manager of ZH Insurance decided to verify from Kwesi, via phone, whether Dr Show was right in his claims before doing the policy for him. Surprisingly, Kwesi confirmed the claim by Dr Show, but quickly added that he had difficulty trying to convince Dr Show to sign on to the policy because he thought the premium was too high; hence, his decision to ‘sweet talk’ him with such vital details with the motive to entice him.

Analysis of the scenario

Clearly, Dr Show had been misled by Kwesi into buying the policy. Perhaps, he would have declined the policy if he knew about the non-existence of such benefits on the policy. 

Thus, the Utmost Good Faith principle had been breached, in this case, by the insurer, through its employee. 

The interesting aspect is that Kwesi acted deliberately, without recourse to the future consequences. 

In this regard, the company is required, by law, to honour the claim, since its assigned falsely represented the policy to the disadvantage of the client. Indeed, the confession by Kwesi, in itself, was an indictment on both Kwesi and the insurance company. 

As sticky as it may be, at the least, the company must honour the claim in order to avoid undermining its reputation. Besides, the company may take steps to appropriately sanction Kwesi for his unethical conduct.

Advice to insurance companies

Insurance companies must live up to their responsibilities by ensuring that all their staff and assigns uphold appropriate ethical values, since the perpetuation of such unethical practices may have dire consequences for the future of both the individual companies and the industry, at large. 

Suffice it to say, misrepresentation leading to mis-selling continues to be the bane of the insurance industry, at least, in Ghana. Moreover, for the most part, the application of lesser sanctions such as cautions and suspensions has not worked! It is, therefore, imperative to adopt a harsher sanctions regime, including outright dismissals and prosecution. 

In this way, the insurance industry will be spared of agents and other assigns with ‘cancerous’ tendencies giving way to a more decent regime where assigns continually exhibit a great deal of responsibility in their dealings with the insuring public.