A conflict of interest in insurance sales occurs when?

A conflict of interest in insurance sales occurs when an agent prioritizes personal gain over customer interests. This situation arises when an agent makes decisions or recommends products that benefit themselves, such as earning higher commissions or bonuses, instead of focusing on what would be best for the client. Ethical insurance practices require agents to act in the best interests of their clients, ensuring that their recommendations are based on the clients’ needs and financial well-being rather than the agent's potential personal profit.

While promoting the company over customer needs, failing to disclose policy details, or lacking knowledge of licensing laws may reflect poor practices or ethical lapses, they do not inherently represent a fundamental conflict of interest in the same way prioritizing personal gain does. Such actions may still lead to negative consequences for clients and potentially damage the agent's reputation, but they lack the direct self-serving aspect that defines a conflict of interest. The essence of a conflict of interest lies in that juxtaposition between a professional duty to clients and the temptation to serve one's interests first, which is why prioritizing personal gain stands as the clearest example.