In an industry where trust is paramount, Gallup’s 2023 Honesty and Ethics poll revealed that only 12 percent of Americans rated the honesty and ethical standards of insurance salespeople as “high” or “very high.” In contrast, nurses topped the chart at 78 percent, while car salespeople came in just above insurance at 8 percent.
As trusted advisors to businesses and individuals, this gap in public perception is concerning. If ethics and integrity are at the heart of what we do as an industry, why is there such a disparity between how we view our own standards and how clients perceive them? This is precisely why ethics continuing education (CE) matters. It’s not merely a formality—it’s an essential tool for building trust, reinforcing professionalism, and demonstrating that the promises we make as an industry are matched by ethical practice.
The Importance of Ethics in Insurance
Ethics in professional settings refers to the principles and standards of conduct that go beyond compliance with laws. It focuses on fairness, honesty, integrity, and responsibility to clients, colleagues, and the public. In the insurance profession, these values are not only vital to everyday business operations and client interactions but also form the foundation of an industry built on promises: a promise to pay when needed, and to support clients during times of crisis.
Ethics is not just about complying with regulations; it serves as a constant reminder of what defines us as professionals and offers an opportunity to strengthen public confidence in our work. From how we sell coverage and promote our services to addressing grey areas in policies and supporting clients in times of need, the conversation about ethics is central to the practice of insurance.
The Current State of Ethics CE in the U.S.
Every U.S. state requires licensed insurance professionals to complete continuing education, and nearly all include a specific requirement for ethics. Typically, the standard is three hours of ethics training every two years, as part of a broader 24-hour CE cycle.
For example, California mandates three hours of ethics, including one hour of fraud education, per license term. Texas similarly requires three hours focused on ethics or consumer protection. Even states like Pennsylvania, which previously resisted such measures, have now introduced ethics training requirements, with Pennsylvania’s new three-hour rule coming into effect in 2024.
Although there are variations in the requirements from state to state—New York, for instance, only requires one hour of ethics within a more targeted 15-hour biennial framework—one thing remains clear: ethics education is non-negotiable.
For insurance professionals, this means ethics training is an integral part of the ongoing license renewal process. States enforce compliance seriously, imposing fines for missed credits and even suspending or refusing to renew licenses if the ethics requirement is not met. As Kim Skarren, Director of Continuing Education at the Risk & Insurance Education Alliance, asserts, “Ethics CE is not an ‘extra’; it is central to maintaining a license.”
The History of Ethics CE
The concept of continuing education (CE) for insurance professionals was introduced to ensure that agents, brokers, and other licensed professionals remained up-to-date with the latest industry mandates and policies. This training guarantees that clients receive advice based on the most current and relevant knowledge, helping to mitigate the risk of underinsured or misinformed clients.
In the 1980s and 1990s, however, lawsuits related to deceptive life insurance sales practices led to massive settlements against major insurers. As public concern grew and industry scandals came to light, regulators realised that keeping professionals informed about technical updates was not enough. The addition of ethics training to CE requirements emerged as a necessary reform.
The 1999 Gramm-Leach-Bliley Act, which focused on financial privacy and disclosure, further catalysed the adoption of uniform licensing systems across states, with ethics training becoming a central component. By the early 2000s, major scandals, such as the bid-rigging case involving a large insurance broker, reinforced the need for stronger ethics education, ultimately leading to near-universal adoption of ethics CE requirements.
By the end of the 2000s, ethics CE had become an industry standard. More recent changes, like Pennsylvania’s 2024 adoption of the three-hour rule, have closed the final gaps. Ethics CE has evolved from a regulatory obligation to a central pillar of trust-building and professionalism within the industry.
Does Ethics Education Make a Difference?
Sceptics often question whether ethics education can truly influence behaviour. Research suggests that it does.
A study by MIT and Notre Dame (Egan, Matovos, Seru, 2019) found that financial advisers who took an exam with more ethics content were 25 percent less likely to commit misconduct over the next decade. Notably, this impact was most significant among early-career professionals, suggesting that ethics training at key points in a career can have long-lasting effects on behaviour.
Further studies back this conclusion. Research by Kaptein (2015) in The Effectiveness of Ethics Programs found that companies with structured ethics programmes report fewer incidents of misconduct and stronger employee accountability. In other sectors, such as law enforcement (Basham, 2020) and medicine (Cabrera et al, 2022), ethics training has been linked to improved decision-making, reduced misconduct, and higher levels of public trust.
For the insurance industry, these findings are clear. Ethics CE offers an ongoing opportunity to refresh one’s ethical judgement, revisit grey areas, and strengthen the client-first mentality that is essential to building trust.
The Risk & Insurance Education Alliance Perspective
At the Risk & Insurance Education Alliance, we view ethics CE as far more than a regulatory checkbox. It’s an opportunity to elevate professionalism across the industry. As Jay Williams, Head of Faculty & Academic Development, explains: “Ethics training is where insurance professionals step back from the technicalities and reflect on what it means to serve clients responsibly.”
Our ethics courses, developed with a practical, real-life focus, aim to deepen professionals’ understanding of ethical principles and their real-world application. We offer these courses in both self-paced and live webinar formats, using case studies and discussions that challenge professionals to think critically. Ultimately, ethics CE is a way to strengthen individual credibility and reinforce the insurance industry’s collective reputation.
Ethics education may have started as a response to scandals and consumer concerns, but today, it’s a fundamental aspect of the insurance profession that helps to maintain high standards, foster public trust, and ensure that every professional is equipped to navigate the challenges of the modern insurance landscape.