What defines a conflict of interest in insurance sales?

A conflict of interest in insurance sales is fundamentally about the motivations and actions of the insurance producer. The situation arises when a producer prioritizes personal gain over the best interests of their clients. This can lead to unethical practices, such as recommending products that may not be suitable for the client just to earn a higher commission or bonus. Having a conflict of interest undermines the trust that customers place in their insurance producers, as clients rely on these professionals to provide them with unbiased advice that aligns with their needs and interests.

In contrast, providing accurate policy details, supporting colleagues, and helping customers understand their rights are all actions that contribute to ethical practice and do not inherently create a conflict of interest. These actions are viewed positively and reflect a commitment to transparency and professionalism, which are essential elements of ethical behavior in the insurance industry.