This post is part of a series sponsored by Risk & Insurance Education Alliance.
In an industry where trust is everything, Gallup’s 2023 Honesty and Ethics poll (Brenan & Jones, 2024) found that only 12 percent of Americans rated the honesty and ethical standards of insurance salespeople as “high” or “very high.” By comparison, nurses rank the highest with a 78 percent honesty and ethical standards rating, and car salespeople are nearly (yes, only nearly) at the bottom with an 8 percent rating.
As trusted advisors to the businesses and individuals we serve, this should give us pause. If ethics and integrity are central to who we are as an industry, why does the public see us so differently? The gap between how we view our own standards and how clients perceive them is exactly why ethics continuing education matters. It’s not about checking a box. It is about building trust, reinforcing professionalism, and showing that promises we make as an industry are matched by the way we practice.
In professional settings, ethics refers to the principles and standards of conduct that go beyond compliance with laws, focusing on fairness, honesty, integrity, and responsibility to clients, colleagues, and the public. For insurance professionals, it’s easy to read that list and agree that those values are a key part of our everyday business activities, our client interactions, and our philosophy on new products. In fact, we are an industry built on promises: a promise to pay, to show up, when individuals and companies need us most.
Conversations on ethics are evident everywhere in our profession, from how we sell coverage and promote our business to explaining policies, handling gray areas, and supporting clients when they need us most. That is why ethics is not just about compliance. It is a reminder of what defines us as professionals and a chance to strengthen the public’s confidence in our work.
The Current Landscape: Ethics CE Across the U.S.
Every state requires licensed insurance professionals to complete continuing education, and nearly all include a dedicated requirement for ethics. In most states, the standard is three hours of ethics every two years, folded into the broader 24-hour CE cycle.
California law requires three hours of ethics, including one hour of fraud in each license term. Texas mandates three hours of ethics or consumer protection. Even states that once resisted, like Pennsylvania, have added explicit ethics requirements, with Pennsylvania’s new three-hour rule implemented in 2024.
While three hours is the norm, there are variations. New York requires just one hour, though within a more targeted 15-hour biennial CE framework. Despite these differences, the direction is consistent: ethics is non-negotiable.
For insurance professionals, this means that, regardless of where they are licensed, ethics 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 requirement 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 the Risk & Insurance Education Alliance.
How We Got Here: A Brief History of Ethics CE
Continuing education for licensed insurance professionals was designed to reinforce technical skills and industry knowledge. CE ensures that licensed professionals stay current, so that clients, both individuals and businesses, receive advice and services that reflect the latest mandates, policies, and other requirements. Without continuing education in place, insurance buyers couldn’t be sure that the advice they were receiving was based on current knowledge, and this could put them at risk with programs providing less than adequate coverage.
During the 1980s and 1990s, lawsuits over deceptive life insurance sales practices resulted in massive settlements against major insurers. As consumer concerns and industry scandals drew attention, regulators realized that keeping licensed insurance professionals technically up to date 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 the privacy and disclosure of nonpublic personal financial information, incentivized states to adopt more uniform licensing systems. The NAIC responded with the Producer Licensing Model Act (Model #218). While it did not set a national CE requirement, it required states to recognize each other’s CE standards. In practice, this created pressure for alignment and led most states to adopt similar requirements, including ethics CE to maintain reciprocity.
Scandals in the early 2000s only reinforced the point. In 2004, a major bid-rigging case involving one of the largest insurance brokers exposed systemic conflicts of interest and hidden commissions. Regulators called it a “disregard for ethics and the law” (LA Times, 2004) and used it as further justification to double down on ethics education.
By the late 2000s, ethics CE was nearly universal. More recent changes, such as Pennsylvania’s adoption in 2024, have closed the remaining gaps. Today, ethics CE is not just a regulatory checkbox; it is the product of decades of reforms aimed at restoring trust in insurance.
Why Ethics Training Matters: The Research
Skeptics sometimes ask whether ethics education can really change or influence behavior. Research suggests that it does.
Researchers from MIT and Notre Dame (Egan, Matovos, Seru, 2019) studied the records of 1.2 million U.S. financial advisers over a 10-year period. They found that individuals who took a licensing exam with more robust ethics content were 25 percent less likely to commit misconduct later on than those who took an exam with less emphasis on ethics. Furthermore, the impact was most substantial among early-career professionals, suggesting that ethics training at key points in a career can shape long-term behavior.
Other studies support the same conclusion. According to Kaptein’s 2015 The Effectiveness of Ethics Programs (Kaptein, 2015), companies with structured ethics programs that include ongoing training report significantly fewer instances of misconduct than those without, as well as stronger employee willingness to speak up when they observed problems. In other words, training doesn’t just reduce bad actions, it strengths 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 hard to argue that continued emphasis on ethics education doesn’t provide a meaningful impact on behavior and thus public perception.
In law enforcement (Basham, 2020), departments requiring college-level ethics coursework see fewer public complaints and misconduct terminations. In medicine (Cabrera et al, 2022) and accounting (CPE, 2023), ethics training is associated with improved decision-making, reduced disciplinary cases, and enhanced public trust. The lesson applies across professions: structured, recurring ethics education reduces misconduct and enhances credibility.
For insurance professionals, the implications are clear. Ethics CE provides a recurring opportunity to refresh judgment, revisit gray areas, and strengthen a client-first mindset. It keeps professionalism front and center.
The Alliance Perspective: From Compliance to Commitment
At the Risk & Insurance Education Alliance, we believe ethics CE is not just about meeting a bi-annual license requirement. It is about raising the standard of professionalism across the industry. As our Head of Faculty & Academic Development, Jay Williams, emphasizes, “ethics training is where licensed insurance professionals step back from the technical details and reflect on what it means to serve clients responsibly.” Ethics courses, like all programs offered by the Alliance, are developed and taught with a practical mindset using real-life situations and drawing on the experiences of our faculty.
Our ethics courses not only meet the state continuing education requirements, but they emphasize our commitment to the insurance professional and the industry as a whole. Offered in both a self-paced format and live webinar, courses use case studies that reflect real-world dilemmas, 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 industry’s credibility as a whole.
Conclusion
Ethics continuing 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 trust in insurance. It reduces misconduct, improves judgment, and reinforces the professional identity of agents and producers.
As the industry evolves with new technologies, new products, and new expectations, ethics will remain the thread that ties technical expertise to professional responsibility. At the Alliance, we are committed to leading in this space, providing education that equips insurance professionals not only to keep their licenses but to uphold the trust that defines our business.
About the Risk & Insurance Education Alliance
The Risk & Insurance Education Alliance offers practical ethics CE options including a series of live one-hour webinars and a three-hour self-paced course that meet state CE ethics requirements. Create your free Alliance PROfile and view the full course schedule here.
References
Brenan, M., & Jones, J.M. (2024, January 22) Ethics Ratings of Nearly All Professions Down in U.S. Gallup News. Available at: https://news.gallup.com/poll/608903/ethics-ratings-nearly-professions-down.aspx
National Association of Insurance Commissioners (NAIC). Producer 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, K.M. (2004, October 15) Spitzer Sues Marsh & McLennan. Los Angeles Times Available at: https://www.latimes.com/archives/la-xpm-2004-oct-15-fi-insure15-story.html
Egan, M., Matvos, G., & Seru, A. (2019). The Market for Financial Adviser Misconduct. Journal of Political Economy, 127(1), 233–295. University of Chicago Press. https://www.journals.uchicago.edu/doi/10.1086/700735
Kaptein, M. (2015) The Effectiveness of Ethics 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, S. R. (2020, March 24). Education offers the best solution for police misconduct. Police Chief Magazine. International Association of Chiefs of Police https://www.policechiefmagazine.org/education-offers-best-solution-for-police-misconduct/#:~:text=Reducing%20police%20misconduct%20is%20essential,7
Cabrera, O. F., Arras-Boyce, S., López, M. J., Rivera-López, E., & Rodríguez, 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%20identified%20the%20need,done%20in%20a%20specific%20situation.
CPE Online. (2023). The basics of ethics in modern accounting: A comprehensive overview. CPE Online. https://cpeonline.com/basics-ethics-modern-accounting-comprehensive-overview#:~:text=Accountants%20occupy%20a%20unique%20position,(IFAC)%2C%20and%20others