Code of conduct

Preface

When the new 'Charter and Bye-Laws' was published in 1998 it deliberately omitted a Code of Conduct for members. Instead it was decided to produce separately the fundamental principles of professional conduct together with some specific guidance notes. These are now incorporated in this document which we have called 'Guide to Professional Conduct'.

1 INTRODUCTION

1.01 Throughout this Guide the term "member' includes all categories of membership as detailed under article 4 of the Charter. To simplify the language, the male pronoun is used throughout except at the first reference in each section when the words "or she" are added to make it clear that the text refers to all members regardless of gender. The same technique is employed when possessives are used for the first time.

1.02 In addition to the duties owed to the public and to his or her client or employer a member of the Institute is bound to observe high standards of conduct which may on occasion be contrary to his personal self interest. This Guide is an aid to members in the identification of occasions upon which they might be at risk of failing to recognise or conform to any of those standards.

1.03 One of the principal objects of the Charter (Charter Article lb) is to maintain high standards of professional practice and conduct by all members. The Charter renders members liable to disciplinary action if, in the course of carrying out their professional duties or otherwise, they have committed any act or default likely to bring discredit to the member, the Institute, or the loss adjusting profession.

1.04 The Council of the Institute believes that a high standard of conduct is best maintained by general provisions; nonetheless Council considers it necessary to be more explicit in certain areas.

1.05 Guidance is given in the form of:

• Fundamental principles
• Specific guidance notes

1.06 The fundamental principles are drawn from the duties owed by each member whether in practice as an independent loss adjuster or otherwise and from the requirements of the Charter.

1.07 The specific guidance notes deal with what is expected of members in certain circumstances.

1.08 Whilst it is impossible to anticipate every contingency, the approach taken, in addition to setting out general principles, is designed to be helpful in giving guidance in specific situations with the specific guidance notes.

1.09 Members should be guided not merely by the terms but also by the spirit of this guide and the fact that particular conduct is not dealt with by a specific guidance note does not prevent that conduct from amounting to misconduct.

1.10 Specific guidance notes will be added from time to time as and when required.

1.11 The fundamental principles apply to all members.

2 ENFORCEMENT OF STANDARDS OF PROFESSIONAL CONDUCT

2.01 The power of the Institute to enforce professional standards is entrusted to Council. Council in turn has appointed the Charter and Etiquette Committee to consider complaints about the conduct of members and to report with recommendations to Council.

2.02 If, having considered the facts before it and any representations made by the member, the Charter and Etiquette Committee is of the opinion that in all the circumstances those facts amount to misconduct it will refer the complaint with a recommendation to Council.

2.03 Article 16 of the Charter deals with disciplinary action and states that a member of the Institute may be expelled or his or her membership may be suspended for such period as Council may determine or may be reprimanded or be required to pay a fine by resolution of Council. Such resolutions require a Special Meeting to be called at which twelve members including the President or Deputy President shall be a quorum. Such resolutions need to be carried by three fourths of those present and entitled to vote.

3 FUNDAMENTAL PRINCIPLES OF PROFESSIONAL CONDUCT

3.01 A member should behave ethically and with integrity in all professional and business relationships. Integrity implies not merely honesty but fair dealing and truthfulness.

3.02 A member should strive for objectivity in all professional and business judgements.

3.03 A member shall act impartially when acting on instructions from an insurer in relation to a policyholder's claim under a policy issued by that insurer.

3.04 A member should conduct himself with courtesy and consideration with all people with whom he comes into contact during the course of performing his or her work

3.05 A member should not accept or perform work which he is not competent to undertake unless he obtains some advice and assistance as will enable him to carry out the work competently.

3.06 A member should carry out his professional work with due skill, care, diligence and expedition and with proper regard for the technical and professional standards expected of him as a member.

3.07 A member shall keep up to date with all developments relevant to his professional practice.

3.08 A member should encourage others to obtain the professional qualifications of the Institute and participate in supporting their endeavours.

3.09 A member shall at all times have a proper regard for and comply with all relevant law.

4 SPECIFIC GUIDANCE NOTES

4.01 BENEFICIAL INTERESTS IN SHARES AND OTHER INVESTMENTS

4.02 A member's objectivity may be threatened or appear to be threatened where he or she holds a material interest in the shares or other forms of investment in:

• a company or Organisation from whom loss adjusting instructions are received
• an insured entity whose claim or claims he has been appointed to deal with.

4.03 CONFLICTS OF INTEREST

4.04 Where the acceptance or continuance of an engagement would materially prejudice, or could be seen to materially prejudice the interests of any interested party, the appointment(s) should be declared to all parties concerned and instructions sought in accordance with paragraph 4.05 below.

4.05 As soon as a conflict of interest is identified, the member should notify all interested parties immediately and request instructions as to whether any party is uncomfortable with the continuance of any appointment.

4.06 IMPROPER DISCLOSURE

4.07 Information confidential to a client or employer or policyholder acquired in the course of professional work should not be disclosed except where consent has been obtained from the client, employer, policyholder or other proper source or where there is a legal right or duty to disclose.

4.08 IMPROPER USE OF INFORMATION

4.09 A member acquiring or receiving confidential information in the course of his or her professional work should neither use nor appear to use that information for his personal advantage or for the advantage of a third party.

4.10 From time to time members in dealing with commercial organisations will come across confidential information that could be extremely price sensitive as far as that company or some other company's shares are concerned. In such circumstances the member must not deal in the shares of the company or cause or (so far as he is able) allow any dealings to take place which might be regarded as "insider dealing".

4.11 It may be a criminal offence in certain circumstances to use confidential information for an improper purpose (by way of example see the Company Securities Insider Dealing Act 1985).

4.12 ADVERTISING AND PROMOTION

4.13 A member may seek publicity for his or her services, achievements and products and may advertise his services achievements or products in any way consistent with the dignity of the profession. A member should not project an image inconsistent with that of a professional person bound to high ethical and technical standards.

4.14 All advertising and promotional material (which includes letterheads, invoices and similar documents) must comply with the relevant Codes of Advertising and Sales Promotion applicable to the territory in which they operate. In the absence of local codes the relevant code is deemed to be the British Code publicised by the Committee of Advertising Practice in association with the Advertising Standards Authority.

4.15 The key principles enshrined in the Code are:

• All advertisements, announcements and other promotional material should be legal, decent, honest and truthful.
• All advertisements should respect the principle of fair competition generally accepted in business.
• Primary responsibility for observing the Code falls on the advertiser.
• The Code is applied in the spirit as well as in the letter.

The following extracts from the Code are considered particularly relevant but are not exhaustive (full compliance with paragraphs 4.14 and 4.15 is required at all times).

4.16 Substantiation
Before submitting an advertisement for publication, advertisers must hold documentary evidence to prove all claims, whether direct or implied, that are capable of objective substantiation.

4.17 Matters of Opinion
Advertisers may give a view about any matter, including the qualities or desirability of their products, provided it is clear that they are expressing their own opinion rather than stating a fact. Assertions or comparisons that go beyond subjective opinions are subject to "Substantiation" above.

4.18 Truthfulness
No advertisement should mislead by inaccuracy, ambiguity, exaggeration, omission or otherwise

4.19 Testimonialsand Endorsements
Advertisers should hold signed and dated proof, including a contact address, for any testimonial they use. Testimonials should be used only with the written permission of those giving them. Testimonials alone do not constitute substantiation and the opinions expressed in them must be supported, where necessary, with independent evidence of their accuracy. Any claims based on a testimonial must conform with the Code.

4.20 Comparisons
Comparisons can be explicit or implied and can relate to advertisers' own products or to those of their competitors; they are permitted in the interests of vigorous competition and public information.Comparisons should be clear and fair. The elements of any comparison should not be selected in a way that gives the advertisers an artificial advantage.

4.21 Denigration
Advertisers should not unfairly attack or discredit other businesses or their products (or services).

4.22 Imitation
No advertisement should so closely resemble any other that it misleads or causes confusion.

4.23 Examples of areas leading to complaints which have generally been upheld are where comparisons are claimed about quality or size unsupported by substantiation.

• It is impossible to know whether a claim to be 'the largest firm' in an area is a reference to the number of staff, the number of instructions, the number of offices or the amount of fee income.
• A claim to be 'the best' firm or for members either individually or as a group to describe themselves as being superior to their fellow members is subjective, incapable to being substantiated and must be avoided.

4.24 PROVIDING HOSPITALITY

4.25 Members must not provide presents, hospitality or other benefits of a kind or scale or value to employees of client companies which are inconsistent with the dignity of the profession and which do not project an image of a professional person bound to high ethical and technical standards.

4.26 RECEIVING HOSPITALITY

4.27 Objectivity may be threatened or appear to be threatened by acceptance of goods, services or hospitality from a client or a policyholder or from a company or Organisation seeking to offer services to the member.

4.28 Goods or services should not be accepted by a member unless the value of any benefit is modest. Acceptance of undue hospitality poses a similar threat.

4.29 RESPONSIBILITIES OF MEMBERS IN BUSINESS

4.30 References in this guidance note to an "employed member" mean those members who are engaged in work relevant to their qualification as a member otherwise than as an independent loss adjuster. For example such a person as might work within and represent the interests of an insurance company or other Organisation.

4.31 An employed member owes certain legal duties towards his or her employer. In addition to any other duties and obligations which he may owe towards the Institute a members owes ethical duties towards the Institute and in particular should observe the same fundamental principles, and the same standards of behaviour and competence as apply to all other members.

4.32 The concept of impartiality, which is central to the role of the loss adjuster in practice, has no direct relevance to the employed member. The requirement for objectivity and integrity, however, is of equal application for all members. Not being fully independent of his employer, it is all the more important that the employed member should strive constantly to maintain objectivity and integrity in all aspects of his work.

4.33 An example might be of an employed member being asked to produce a report on the recoverability or otherwise of, say, a business interruption claim presented by a claimant. Whilst the report may properly present only the counterview to the representations made by the claimant and may present that view to its best advantage, the report should be accurate, truthful and, within its scope, both complete and balanced. It should be objective and justifiable and should not be based on unreasonable assumptions.

APPENDIX

Copies of the British Code of Advertising referred to in Paragraphs 4.15 to 4.24 are available from:

Advertising Standards Authority
2 Torrington Place
London
WC1E 7HW

Tel: 020 7580 5555
http://www.asa.org.uk

ADDENDUM

RESPONSIBILITIES OF MEMBERS ACTING FOR POLICYHOLDERS

1. To avoid misunderstandings, it is recommended that prior to, or as soon as possible after engagement the member sets out in writing to the client, the terms on which the case is taken. This letter should include the financial terms of the contract together with any other factors the member believes could give rise to later misunderstanding.

2. Members must disclose at the outset any financial interest in any contractor, adviser or supplier recommended to the policyholder. Failure to do so could lead to allegations of receiving secret commissions.

3. The CILA Charter requires an Independent Loss Adjuster to act impartially when dealing with instructions from an Insurer in relation to a policyholder’s claim. However, whilst not specifically required to act impartially when representing a policyholder, the member should always maintain objectivity in all aspects of his/her work.

4. Members may, from time to time, encounter clients whose integrity they do not feel able to vouch for. The requirement to behave ethically and with integrity as set out in Fundamental Principle 3.01 of the Guide to Professional Conduct should always be adhered to.

5. When presenting a claim to Insurers or their representatives, members must be satisfied the claim is justifiable and not based on unreasonable assumptions.

6. It is recommended that members hold adequate professional indemnity insurance.