Performance-Based Incentives?

Is it ethical for insurance professionals to be subject to performance-based incentives, and would disclosure to those who are served by the professional avoid any potential problems created by the incentives? That was the question posed in my last column on May 21. The original suggestion for this question came from an independent adjuster and expert witness who believes that such performance-based incentives are indeed unethical. He also provided a copy of a California insurance regulation that makes compensation based on any one file or group of claim files illegal. There are at least four challenges in addressing these two questions. • First is the broad-based nature of the question. It applies not only to the company employee adjuster (the subject of the original question) but also to public adjusters, plaintiff’s attorneys, agents, brokers, underwriters, premium auditors, loss control representatives