Abstract
As a service-providing business that deals with the customers directly, the progress of the life insurance industry depends highly on the behavior of the salesforce. Unethical salesforce behavior can be attributed as one of the prominent reasons for the life insurance lower penetration rate and higher lapse rate prevail in Sri Lanka. Therefore, the main objective of this study is to identify the factors affecting salesforce unethical behavior in life insurance industry. To investigate the factors, 152 life insurance agents in Badulla district were surveyed. Quantitative research design along with snowball sampling were employed to collect the data. Using multiple regression analysis, results indicate that selling pressure and competitive intensity have a significant positive relationship with salesforce unethical behavior. Thus, practitioners and regulators are suggested to reduce sales pressure by means of reducing sales targets and discouraging anti-competitive behavior via code of conduct and provision of guidelines for fair competition.