The effect of multisystem cultural framework on the ethical conduct of the agency in select life insurance companies in the Philippines

This research paper takes a look at what the Philippine life insurance industry and select life insurance companies are doing to preserve and enhance corporate integrity and conduct and how those policies and practices are reflected in the way agents practice their profession. The focus is on the agencies, since they are the primary distribution channel that sells the life insurance companies products and services to the public at large. A summated rating scale was used to evaluate the application of a multi-system cultural framework (MCF) among the top 10 life insurance companies in the way they adopt and implement formal and informal systems to give rise to proper ethical conduct in the agency. Multifactor evaluation (MFE) was employed to surface attributes that contribute to ethical misconduct. The MCF analysis reveals an overall satisfactory rating among respondents. The formal and informal systems components in the MCF are consistently used by the respondent companies to effect ethical conduct. However, there are areas of concern that need to be addressed. It was also surfaced that companies with more assets tend to have better MCF scores. There is an existing mechanism at the regulatory level to monitor and report ethical misconduct cases. This tracking mechanism, called the Negative List report of the Insurance Commission (IC), enables the industry and companies to implement corrective actions in terms of recruiting and hiring agents. Multi-System Cultural Framework. Companies with more agents and higher premiums tend to have more cases of ethical misconduct. There are also certain agency attributes that lead to committing ethical misconduct. The process of identifying them needs to be refined for more conclusive results