Zalma on Insurance
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October 08, 2022
The Compact Book on Ethics for the Insurance Professional

How Ethical Doctrines from the Beginning of the Written Word to the Present Resulted in the Incorporation of the Covenant of Good Faith

New Book from Barry Zalma
The Compact Book on Ethics for the Insurance Professional

Read the full article at https://lnkd.in/gCVTzc2C and see the full video at https://lnkd.in/gERBXeD3 and at https://lnkd.in/ghU3vDaC and at https://zalma.com/blog plus more than 4300 posts.

Posted on October 8, 2022 by Barry Zalma

How Ethical Doctrines from the Beginning of the Written Word to the Present Resulted in the Incorporation of the Covenant of Good Faith
Every Person Involved in the Business of Insurance Must Act Ethically in the Business of Insurance

Insurance is, by definition, a business of the utmost good faith. This means that both parties to the contract of insurance must act fairly and in good faith to each other and do nothing that will deprive the other of the benefits the contract of insurance promised.

Without the covenant of good faith and fair dealing, and ethical people who work in the insurance industry applying and fulfilling the covenant, effective insurance to spread the risk of loss to a large community of insurance professionals, is impossible. One cannot act fairly and in good faith without being a person with a well-formed ethical compass.

In 1776, Lord Mansfield acting as an appellate judge serving in the House of Lords of Britain (the predecessor of the United Kingdom) for the first time referred to the covenant of good faith and fair dealing. In the case designated: Carter v. Boehm S.C. 1 Bl. Burr 1906, 11th May 1766. 593, 3 Lord Mansfield in the British House of Lords stated the rule of uberrimae fide (Latin for utmost good faith).
Ethics & Ethical Behavior are Essential to Every Insurance Professional

Good faith forbids either party by concealing what he privately knows, to draw the other into a bargain, from his ignorance of that fact, and his believing the contrary.

Insurers, when deciding to insure or not insure a risk, rely on the information provided to them by the insured. As Lord Mansfield instructed, the insured must provide the information requested thoroughly, honestly and in good faith.

The implied covenant is simply stated by explaining that no party to a contract of insurance should do anything to deprive the other of the benefits of the contract.

The implied covenant of good faith and fair dealing imposes obligations on all parties to the contract of insurance. It not only applied to claims by an insurer, a first party property insured, a third party liability policy insured, the insurer, the insurer’s employees, underwriters, and claims personnel.

Since at least 1766, the business of insurance is a business of the utmost good faith. Each party to a contract of insurance must deal with each other ethically. This book will consider and explain different ethical concepts from the Code of Hammurabi more than 3000 years ago to modern ethical philosophers.

The general duty of good faith and fair dealing incorporated by reference into every policy of insurance requires a complete understanding of ethics and ethical behavior. For Example, the California Supreme Court noted that: “In every insurance contract there is an implied covenant of good faith and fair dealing that neither party will do anything which will injure the right of the other to receive the benefits of the agreement.” [Gruenberg v. Aetna Insurance Co., 9 Cal.3d. 566, 108 Cal. Rptr. 480 (1973)].

The covenant is mutual, and the principles of good faith and fair dealing impose an affirmative obligation on the insured to cooperate as much as it requires the insurer to treat the insured fairly with regard to every claim presented.

This is a duty imposed by tradition, by the need to deal fairly and by court precedent and statutory law, not one arising from the terms of the contract itself.

The duty to deal fairly and in good faith is nonconsensual in origin rather than consensual. It is an unwritten, but essential part of every insurance contract.

It is imposed to fulfill the spirit, as well as the letter, of the insurance relationship and the implied covenant of good faith and fair dealing.
The Covenant of Good Faith and Fair Dealing is a statement of the ethical basis of the insurance business.

Without the covenant of good faith and fair dealing, and ethical people who work in the insurance industry applying and fulfilling the covenant, effective insurance to spread the risk of loss to a large community of insurance professionals, is impossible. One cannot act fairly and in good faith without being a person with a well-formed ethical compass.

In 1776, Lord Mansfield acting as an appellate judge serving in the House of Lords of Britain (the predecessor of the United Kingdom) for the first time referred to the covenant of good faith and fair dealing. In the case designated: Carter v. Boehm S.C. 1 Bl. Burr 1906, 11th May 1766. 593, 3 Lord Mansfield in the British House of Lords stated the rule of uberrimae fide (Latin for utmost good faith):

Good faith forbids either party by concealing what he privately knows, to draw the other into a bargain, from his ignorance of that fact, and his believing the contrary.

Insurers, when deciding to insure or not insure a risk, when deciding to honor or reject a claim, rely on the information provided to them by the insured. As Lord Mansfield instructed, the insured must provide the information requested thoroughly, honestly and in good faith.

The implied covenant of good faith and fair dealing imposes obligations on all parties to the contract of insurance. It not only applied to claims by an insurer, a first party property insured, a third party liability policy insured, the insurer, the insurer’s employees, underwriters, and claims personnel.Since at least 1766, the business of insurance is a business of the utmost good faith. Each party to a contract of insurance must deal with each other ethically.
What is The Purpose of the Book

This book considers and explains different ethical concepts from the Code of Hammurabi more than 3000 years ago to modern ethical philosophers.

The book covers, at least:

What is Insurance?

Ethics & Ethical Behavior.

Ethical Insurance

The Development of the Implied Covenant of Good Faith & Fair Dealing.

The Tort of Bad Faith

The Ethical Insurance Professional

Applying Ethics to the Work of the Insurance Professional

Sarbanes Oxley & the Ethical Insurance Professional

What Happens When a Cort Creates an Ethical Conflict When None Exists?

Ethics and Insurance Fraud

Ethics in the Insurance Industry

Case Studies of Ethical Breach

The general duty of good faith and fair dealing incorporated by reference into every policy of insurance requires a complete understanding of ethics and ethical behavior.

It is imposed to fulfill the spirit, as well as the letter, of the insurance relationship and the implied covenant of good faith and fair dealing.

The Covenant of Good Faith and Fair Dealing is a statement of the ethical basis of the insurance business.

The book is available as a Kindle book, a Paperback or a Hardcover
Who Needs This Book?

If you employ people in the business of insurance your business will be improved if every one of your employees reads and applies the ethical concepts described in the book.

If you are an insurance claims professional, an adjuster, supervisor, claims manager, defense counsel, or insurance coverage counsel the book will provide the knowledge necessary to apply the ethical concepts described in this book.

If you are a person insured or about to be insured you need this book to understand your ethical obligations to the insurer and the insurer’s ethical obligations to you.
The Author

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com

and [email protected] and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe.Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome.

Now available Barry Zalma’s newest book, The Tort of Bad Faith, available here. The new book is available as a Kindle book, a paperback or as a hard cover.

Write to Mr. Zalma at [email protected]; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com.

Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library

00:12:07
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Post 5196

See the full video at and at and at https://zalma.com/blog and more than 5150 posts.

You Plead Guilty You Must Accept the Sentence

In Commonwealth Of Pennsylvania v. Mark D. Redfield, No. 20 WDA 2025, No. J-S24010-25, Superior Court of Pennsylvania (September 19, 2025) the appellate court reviewed the case of Mark D. Redfield, who pleaded guilty to third-degree murder for killing April Dunkle with malice using a rifle.

Affirmation of Sentence:

The sentencing court’s judgment was affirmed, and jurisdiction was relinquished, concluding no abuse of discretion occurred.

Reasonable Inference on Trigger Pulling:

The sentencing court reasonably inferred from the guilty plea facts that the appellant pulled the trigger causing the victim’s death, an inference supported by the record and consistent with the plea.

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September 25, 2025
Prelitigation Communications Privileged

The Judicial Proceedings Privilege
Post 5196

Posted on September 25, 2025 by Barry Zalma

See the full video at and at

Judicial Proceeding Privilege Limits Litigation

In David Camp, and Laura Beth Waller v. Professional Employee Services, d/b/a Insurance Branch, and Brendan Cassity, CIVIL No. 24-3568 (RJL), United States District Court, District of Columbia (September 22, 2025) a defamation lawsuit filed by David Camp and Laura Beth Waller against Insurance Branch and Brendon Cassity alleging libel based on statements made in a letter accusing them of mishandling funds and demanding refunds and investigations.

The court examined whether the judicial proceedings privilege applieD to bar the defamation claims.

Case background:

Plaintiffs Camp and Waller, executives of NOSSCR and its Foundation, sued defendants Insurance Branch and Cassity over a letter alleging financial misconduct and demanding refunds and audits. The letter ...

00:07:56
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September 24, 2025
Untrue Application for Insurance Voids Policy

Misrepresentation or Concealment of a Material Fact Supports Rescission

Post 5195

Don’t Lie to Your Insurance Company

See the full video at and at https://rumble.com/v6zefq8-untrue-application-for-insurance-voids-policy.html and at https://zalma.com/blog plus more than 5150 posts.

In Imani Page v. Progressive Marathon Insurance Company, No. 370765, Court of Appeals of Michigan (September 22, 2025) because defendant successfully established fraud in the procurement, and requested rescission, the Court of Appeals concluded that the Defendant was entitled to rescind the policy and declare it void ab initio.

FACTS

Plaintiff's Application:

Plaintiff applied for an insurance policy with the defendant, indicating that the primary use of her SUV would be for "Pleasure/Personal" purposes.

Misrepresentation:

Plaintiff misrepresented that she would not use the SUV for food delivery, but records show she was compensated for delivering food.

Accident:

Plaintiff's SUV was involved in an accident on August ...

00:07:48
September 09, 2025
The Dishonest Chiropractor/Physician

How a Need for Profit Led Health Care Providers to Crime
Post 5185
Posted on September 8, 2025 by Barry Zalma

See the full video at https://lnkd.in/gePN7rjm and at https://lnkd.in/gzPwr-9q

This is a Fictionalized True Crime Story of Insurance Fraud from an Expert who explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers.

The Dishonest Chiropractor/Physician

How a Need for Profit Led Health Care Providers to Crime

See the full video at and at

This is a Fictionalized True Crime Story of Insurance Fraud from an Expert who explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the ­­­Perpetrators than any Other Crime.

How Elderly Doctors Fund their ...

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September 08, 2025
The Dishonest Chiropractor/Physician

How a Need for Profit Led Health Care Providers to Crime
Post 5185
Posted on September 8, 2025 by Barry Zalma

See the full video at https://lnkd.in/gePN7rjm and at https://lnkd.in/gzPwr-9q

This is a Fictionalized True Crime Story of Insurance Fraud from an Expert who explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers.

The Dishonest Chiropractor/Physician

How a Need for Profit Led Health Care Providers to Crime

See the full video at and at

This is a Fictionalized True Crime Story of Insurance Fraud from an Expert who explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the ­­­Perpetrators than any Other Crime.

How Elderly Doctors Fund their ...

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September 03, 2025

Barry Zalma: Insurance Claims Expert Witness
Posted on September 3, 2025 by Barry Zalma
The Need for a Claims Handling Expert to Defend or Prove a Tort of Bad Faith Suit

© 2025 Barry Zalma, Esq., CFE

When I finished my three year enlistment in the US Army as a Special Agent of US Army Intelligence in 1967, I sought employment where I could use the investigative skills I learned in the Army. After some searching I was hired as a claims trainee by the Fireman’s Fund American Insurance Company. For five years, while attending law school at night while working full time as an insurance adjuster I became familiar with every aspect of the commercial insurance industry.

On January 2, 1972 I was admitted to the California Bar. I practiced law, specializing in insurance claims, insurance coverage and defense of claims against people insured and defense of insurance companies sued for breach of contract and breach of the implied covenant of good faith and fair dealing. After 45 years as an active lawyer, I asked that my license to practice law be declared inactive ...

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