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The Institutionalization of Deceptive Sales in Life Insurance: Five Sources of Moral Risk

Posted: 29 Feb 2008  

Richard Ericson

University of Toronto - Centre of Criminology (Deceased)

Aaron Doyle

Carleton University - Department of Sociology and Anthropology

Date Written: November 2006

Abstract

Interview and ethnographic data are used to show how deceptive sales practices are rife and institutionalized in the life insurance industry. The data are analysed using the concept of 'moral risk': the paradoxical tendency of the structure and culture of the insurance institution to facilitate and encourage risky behaviour on behalf of the various players in the insurance relationship, in this case behaviour by insurance companies and their agents that puts consumers at risk through deceptive selling. We give empirical evidence of five key sources of moral risk that are part of the enduring structure and culture of life insurance sales. Although moral risk has been pervasive in life insurance sales since the birth of the industry, it articulates with key contemporary social tendencies: the responsibilization of the individual consumer, the erosion of the social safety net, fragmentation, individualism and the attenuation of family ties, the growth of a 'flexible' labour force, and the downloading of regulatory responsibility from the state. Deceptive sales practices corrode trust and promote yet more individualism, erasing the potential of insurance as a mechanism of social solidarity.

Suggested Citation

Ericson, Richard and Doyle, Aaron, The Institutionalization of Deceptive Sales in Life Insurance: Five Sources of Moral Risk (November 2006). The British Journal of Criminology, Vol. 46, Issue 6, pp. 993-1010, 2006. Available at SSRN: https://ssrn.com/abstract=1097912 or http://dx.doi.org/10.1093/bjc/azl066

Richard Ericson

University of Toronto - Centre of Criminology (Deceased)

Robarts Library
130 St. George Street, Room 8001
Toronto, ON M5S 1A5
Canada

Aaron Doyle (Contact Author)

Carleton University - Department of Sociology and Anthropology ( email )

Ottawa, Ontario
Canada

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