Insurers in the UK now have new guidelines on the instruction and use of private investigators. While the guidelines have a relatively wide scope, they are a little vague on a number of key ethical issues. This leaves insurers with important questions to address when managing suppliers of private investigating services. In this post, I’ll look at two ethical issues that insurers need to think more carefully about, and in a subsequent post, I’ll outline some key dimensions to the ethics of private investigation.
The guidelines were published last week by the trade body for insurers in the UK, the Association of British Insurers. They’re a response to questions raised by the Financial Conduct Authority and the Information Commissioner’s Office, about insurers’ use of private investigators (PIs).
So, if you’re an insurer weighing up how best to adopt these guidelines, what ethical issues may need more careful attention? Here are two that stand out:
Conflicts of interest
The guidelines make no substantive comment about the way in which PIs are remunerated. This is surprising, given that renumeration can introduce significant conflicts of interest into the customer / PI / insurer relationship. The way in which PIs are paid, and the way in which claims people contracting them are rewarded, needs to be addressed, if not via the guidelines, then in how the insurer aims for the ‘highest ethical standards’ often talked about in relation to surveillance work.
And those high ethical standards will prove very elusive if the insurer doesn’t tighten up on the guideline’s reference to a contract being only ‘strongly recommended’. Without a contract, the many sensible suggestions put forward by the guidelines begin to look like ‘castles in sand’. Due diligence, performance assessment, privacy, systems and controls: all quickly look rather hollow if the insurer and PI firm agree nothing in writing. Contracts should be mandatory.
The guidelines talk about most investigations being carried out with the knowledge of the claimant, this being set out for customers at their policy’s inception and for third parties at the point of making the claim. So how much consent comes with that ‘knowledge’? The signing of a declaration by the customer is, in ethical terms, explicit consent to a generic course of action. Generic consent, even if explicitly given, does not give an insurer or PI firm carte blanche permission to access a claimant’s private data, property, accounts and the like (to do that, you need specific consent, explicitly given). The reason why it doesn’t has to do with what the claimant has been told, what they understand from that information and what they understand about the implications of the actions for which consent is being sought.
The insurance sector has suffered reputationally from claims surveillance because it has had at times the bad habit of turning a blind eye to consent. An insurer applying these new guidelines needs to introduce some clear parameters and controls for claims staff and PI firms, so that consent is given proper consideration at each stage of an investigation.
It’s important to remember that the way in which private investigations are carried out for insurers is not just experienced by those suspected of claims fraud. The ripples carry much wider and the impressions that are left influence the wider public’s sense of trust in the insurance sector. So claims fraud is a coin with two sides: important that it is confronted, important in the way it is confronted. Each needs to act in support of the other.