If you watched President Obama’s State of the Union speech last night, you’ll know that although priorities may have shifted, he still supports both healthcare and financial services reform — the most recent permutation of which includes the elimination of insurers’ antitrust exemption. Unfortunately, to politicians and people in general, ”insurance,” “health insurance” and “financial services” are three dirty words that mean the same thing: bilking the public.

You might say that ever since the 1999 Gramm-Leach-Bliley Act,  banks seem to have gotten the better end of the association with insurance.  And a study released this week suggests that banks are banking on insurance — specifically, agents and brokers — more than ever. A recent report by Michael White Associates LLC shows that insurance brokerage fee income for more than 7,000 savings banks and bank holding companies hit $3.05 billion in third-quarter 2009, a 11.7% increase over last year and the highest level in the last five quarters.  These fees include commissions and other fees earned from selling insurance products, as well as referrals for credit, life, health, property-casualty and title insurance.

The top 3 gainers for brokerage fees in the first three quarters of 2009 were:

1. Wells Fargo & Co., $1.38 billion, up 5.34% from the first nine months of 2008
2. Citigroup Inc., $771 million, down 19.27% from the year-ago period
3. BB&T Corp., $699.9 million, 11.8% gain from the year-ago period.

“Not that there’s anything wrong with that,” to paraphrase Seinfeld. We’ve interviewed many agents whose businesses are affiliated with banks, and most seem very happy with the arrangement. But in the course of the last year or so, as “financial services” has become synonymous with shaft, trickery and deceit, maybe it isn’t such a good thing to be lumped into that category.

Just this week, PCI CEO David Sampson warned attendees at the group’s annual executive roundtable that property-casualty insurance could very well get caught up in the “wave of political populism” that’s crashing down on banks, health insurers and other financial services institutions. So far, agents’ enviable position as trusted advisors to their customers has helped them dodge that wave. Let’s hope it’s a position we can retain through the rough times ahead.

Businesses give plenty of lip service to ethics, but you have to wonder how many really take it seriously. Corporations are awash in sensitivity training, sexual harassment prevention workshops and other endless efforts to promote ethics. Yet many of these same businesses have also contributed to the financial mess we’re in today — by promoting salary and bonus policies that emphasize profit over common sense.

The issue of ethics, or lack thereof, is exacerbated in tough economic times. It’s no surprise that insurance fraud is up across the board for the first half of 2009, according to the NICB, or that crimes like burglaries and break-ins are on the rise in even the safest communities.  I currently serve on the national ethics committee of the American Society of Business Publication Editors (ASBPE), where the convergence of print and online content have blurred the line between editorial and advertisement – at a crucial time when advertising dollars are growing ever scarcer. When businesses are fighting for survival, the concept of ethics can seem like a quaint anachronism from a more profitable past.

Ironically, as times get tougher, ethics become more important — or should.  AA&B ran a “Last Word” editorial in April by a programs insurance broker who blamed the seemingly endless soft market for the cutthroat competition that was trumping professionalism and in-depth customer knowledge. She complained that unethical newcomers were passing themselves off as experts and using discount rates to entice formerly loyal clients, who, financially squeezed themselves, were seduced by cheaper premiums. Think of the E&O claims that await an agent or broker who doesn’t really understand a client’s risk!

On a larger scale, the lack of ethics in the financial services industry has not only put us into a global recession, but now has the Feds breathing down the industry’s neck for tighter regulation. Based on the industry’s past irresponsibility, this should neither be surprising nor unwarranted.

That’s why the CPCU Society‘s recent unveiling of “A Guide to Organizational Ethics Policy” couldn’t come at a better time.  The Society’s ethics committee collected 75 ethical codes of conduct from different insurance organizations and compiled a list of 12 steps an insurance business can take to ensure it is operating ethically.

Not surprisingly, the first and most impotant step is to “create an ethical mission of the organization,” a single sentence that broadly describes the organization’s goal. Sample statements include “Treat customers, vendors, employees, owners and regulators as we would wish to be treated,” or “Place the interests of those with whom we have business relationships above our own interests.” The other 11 steps boil down to communicating and enforcing this statement.

Does your agency have an ethics policy? Tell us about it, and why it was adopted.