This post is part of a series of sponsored by the Alliance Alliance Alliance.
In an industry where trust is everything, Gallup’s honesty and ethics vote from 2023 (Brenan & Jones, 2024) found that only 12 percent of Americans rated honesty and ethical standards for insurance sellers as “high” or “very high.” In comparison, nurses rank the highest with a 78 percent honesty and ethical standards, and car sellers are almost (yes, only almost) at the bottom with an 8 percent assessment.
As trusted advisers to the companies and individuals we serve, this must give us a break. If ethics and integrity are central to who we are like an industry, why does the public see us so differently? The gap between how we see our own standards and how clients perceive them is exactly why ethics subsequently education matters. It’s not about marking a box. It’s about building trust, reinforcing professionalism and showing that promises we give as an industry are matched by the way we practice.
In professional environment, ethics refer to the principles and standards of behavior that goes beyond compliance with laws, focusing on justice, honesty, integrity and responsibility to clients, colleagues and the public. For insurance people, it is easy to read this list and agree that these values ​​are an important part of our daily business activities, our client interactions and our philosophy about new products. In fact, we are an industry built on promises: a promise to pay, to emerge when individuals and businesses need most of us.
Conversations about ethics are clear everywhere in our profession, from how we sell coverage and promote our business to explaining policies, dealing with gray areas and supporting clients when they need us most. Therefore, ethics is not just about observance. It is a reminder of what defines us as professionals and a chance to strengthen public confidence in our work.
The current Landscape: Ethics throughout the United States
Each state requires licensed insurance people to complete continuing education, and almost everyone includes a dedicated requirement for ethics. In most states, the standard is three hours of ethics every two years, folded into the wider 24-hour CE cycle.
California’s law requires three hours of ethics, including one hour of fraud in each license period. Texas mandates three hours of ethics or consumer protection. Even states that once opposed, like Pennsylvania, have added explicit ethical requirements, with Pennsylvania’s new three-hour rule implemented in 2024.
While three hours are the norm, there are variations. New York requires only an hour, though within a more targeted 15-hour Biennal CE frame. Despite these differences, the direction is consistent: ethics is non-negotiating.
For insurance professionals, this means that ethics, no matter where they are licensed, is an integral part of the ongoing renewal process. And regulators enforce it seriously. States typically impose fines for each missing credit hour and licenses can be suspended or not renewed if the ethics need is not met. “Ethics CE is not an” extra: “It is now central to maintaining a license,” says Kim Skarren, director of continuing education at Risk and Insurance Education Alliance.
How we came here: a short story about ethics CE
Continuing education for licensed insurance people was designed to strengthen technical skills and industry knowledge. CE ensures that licensed professionals remain current, so that clients, both individuals and businesses, get advice and services that reflect the latest mandates, policies and other requirements. Without continuing education in place, insurance buyers could not be sure that the advice they received was based on the current knowledge, and this could put them in danger of programs that provided less than sufficient coverage.
During the 1980s and 1990s, litigation on misleading life insurance practices resulted in massive settlements against major insurance companies. When consumers’ concerns and the scandals of the industry drew attention, the supervisory authorities realized that keeping insurance people technically updating was only part of the solution. States gradually began to incorporate ethics into the CE requirements.
In 1999, the passage of the Gramm-Leach-Bliley Act, which primarily focused on privacy and the disclosure of non-public personal financial information, to adopt more uniform licensing systems. NAIC answered with Producer Licensing Model ACT (Model #218). Although it did not set a national CE requirement, it required states to recognize each other’s CE standards. In practice, this created pressure for adaptation and led to most states adopting similar requirements, including ethics CE to maintain reciprocity.
Scandals in the early 2000s only reinforced the point. In 2004, a major Bid-Rigging case exposed to one of the largest insurance brokers, systemic conflicts of interest and hidden commissions. Authorities called it an “ignoring ethics and the law” (La Times, 2004) and used it as a further reason for doubling ethics education.
In the late 2000s, ethics CE was almost universal. Newer changes, such as Pennsylvania’s adoption in 2024, have closed the remaining holes. Today, ethics CE is not only a legislative checkbox; It is the product of decades of reforms that aim to restore confidence in insurance.
Why ethics education matters: the research
Skeptics sometimes ask if ethics education can really change or influence behavior. Research suggests it does.
Researchers from MIT and Notre Dame (Egan, Matovos, Seru, 2019) studied the records of 1.2 million US financial advisers over a 10-year period. They found that people who took a license exam with more robust ethics were 25 percent less likely to commit mismatch later than those who took an exam with less emphasis on ethics. Furthermore, the effect was most significant among professionals in the early career, suggesting that ethics education at key points in a career can shape long -term behavior.
Other studies support the same conclusion. According to Capteins 2015 The effectiveness of ethical programs (Captain, 2015), cReviews with structured ethical programs that include ongoing educational report, significantly fewer cases of wrongdoing than those without, as well as stronger employee willingness to speak up when observing problems. In other words, training not only reduces bad actions, it strengthens cultures of accountability.
While no single study or research project has drawn a direct correlation between ethics education and the public’s perception of an industry, it would be difficult to claim that continued emphasis on ethics education does not give a meaningful impact on behavior and thus public perception.
In law enforcement (Basham, 2020), departments that require an ethical course at university level see fewer public complaints and mismatches. In medicine (Cabrera et al, 2022) and accounting (CPE, 2023), ethics education is associated with improved decision making, reduced disciplinary cases and improved public confidence. The lesson applies across business: Structured, recurring ethics education reduces wrongdoing and improves credibility.
For insurance people, the implications are clear. Ethics CE provides a recurring opportunity to update judgment, revise gray areas and strengthen a client-first mindset. It keeps professionalism ahead and center.
Alliane Perspective: From Compliance to Engagement
At the Alliance Alliance in Risk & Insurance Education, we believe that ethics CE is not just about meeting a semi -annual license requirement. It’s about raising the standard of professionalism throughout the industry. As our head of faculty and academic development, Jay Williams emphasizes, “Ethics education is where licensed insurance people step back from the technical details and reflect on what it means to earn clients responsible.” Ethics courses, such as all programs offered by the alliance, are developed and taught with a practical mindset using real situations and draws on our faculty experiences.
Our ethical courses not only meet the state continuing education requirements, but they emphasize our commitment to the insurance staff and the industry as a whole. Courses offered in both a self -speed format and live webinar use case studies that reflect dilemmas in the real world, discussions that challenge professionals to think critically, and applications that connect ethical principles to daily practice. For us, ethics CE is a way to strengthen both individual agents and the credibility of the industry as a whole.
Conclusion
Ethics Subsequent education is now a national standard, but its value goes far beyond compliance. It is one of the most important tools we have to strengthen public confidence in insurance. It reduces wrongdoing, improves the verdict and strengthens the professional identity of agents and producers.
As the industry develops with new technologies, new products and new expectations, ethics will remain the thread that binds technical expertise to professional responsibility. In the alliance, we are obliged to lead in this space and provide education that equals insurance people not only to retain their licenses, but to maintain the confidence that defines our business.
About Alliance Alliance Risk & Insurance Education
The Risk and Insurance Education Education Alliance offers practical ethical CE options, including a number of live an hour of webinars and a three-hour self-pace that meets the state’s CE ethical requirements. Create your free alliance profile and see the full course plan here.
References
Brenan, M., & Jones, JM (2024, 22 January) Ethics assessments of almost every profession in the US Gallup News. Available at: https://news.gallup.com/poll/608903/ethics ratings-narly-professions-down.aspx
National Association of Insurance Commissioners (NAIC). Manufacturer Licensing Model ACT (PLMA), Model #218. First adopted in 2000. Available at: https://content.naic.org/sites/default/files/inline-files/mdl-218.pdf
Hamilton, W. & Kristof, km (2004, October 15) Spitzer sues Marsh & Mclennan. Los Angeles Times available at: https://www.latimes.com/archives/la-xpm-2004-oct-15-fi-sure15-story.html
Egan, M., Matvos, G., & Seru, A. (2019). The market for financial adviser for disproportionate. Journal of Political EconomyAt 127 (1), 233–295. University of Chicago Press. https://www.journals.uchicago.edu/doi/10.1086/700735
Captain, m. (2015) The effectiveness of ethical programs: the role of scope, composition and sequence. Journal of Business Ethics, 132, 415–431 (2015). https://doi.org/10.1007/s10551-014-2296-3
Basham, Sr. (2020, March 24). Education offers the best solution to the police mismatch. Police Chief Magazine. International Association of Chiefs of Police https://www.policechiefmagazine.org/education-Offers-best-solution-for-police-misconduct/#: ~: TEXT = REDUCTION%20police%20MISConduct%20is%20essential, 7
Cabrera, from, Arras-Boyce, S., López, MJ, Rivera-López, E., & RodrÃguez, J. (2022). Ethics Education for Medical Students: A Systematic Review. Journal of Medical Ethics. National Center for Biotechnology Information. https://pmc.ncbi.nlm.nih.gov/articles/pmc8933936/#: ~: TEXT = The%20Review%20 Identified%20the%20NEED, DONE%20in%20A%20 Specific%20 Situation.
CPE online. (2023). Basic about ethics in modern accounting: A comprehensive overview. CPE online. https://cpeonline.com/basics-ethics-modern-counting-comprehensive-overview#: ~: TEXT = Accountants%20OCCUPY%20A%20UNIQUE%20 POSITION, (IFAC)%2C%20 and%20OTHERS