Some states require ethics training as part of their insurance continuing education requirements.
The insurance industry faces many potential ethical dilemmas on a daily basis. Insurance is a promise of a large potential future payment in exchange for an immediate guaranteed smaller payment. Since insurance companies do not sell a tangible product but rather promises based on legal contracts, there is great potential for abuse through unethical decisions and business practices. Ethics training exists to minimize or prevent these situations.
History
As early as 1930, more than a decade before congressional legislation adopting insurance industry regulation, the National Association of Health Underwriters adopted a strict code of ethics that is still part of its organization as of June 2010. Over time, states introduced ethics regulations into various parts of the insurance industry, such as the unfair trade practices laws. Some states require ethics training as part of their pre-licensing requirements for producers. According to Insurance Continuing Education, 19 states include ethics as part of their continuing education requirements as well.
Insurance Institute for Applied Ethics
The Insurance Institute for Applied Ethics was founded in 1995 to bring awareness to the ever-growing need for ethics in the insurance industry. The institute, located in Pennsylvania, identifies and provides funding for ethics-related research projects, then publishes the findings for the industry. It sponsors various seminars and workshops designed for insurance professionals as well as the public to better educate everyone about ethics implications of insurance contracts.
State Regulation
Each state is primarily responsible for regulating the insurance laws within its borders. The District of Columbia, Puerto Rico and Guam also have departments or bureaus of insurance. Because of this state-level regulation, specific requirements for ethics training will vary by location. Check with your state's or territory's department of insurance to see what training requirements you must fulfill to maintain your license.
Providers
Each state regulates continuing education ethics requirements but does not typically provide the classes directly. Ethics courses are offered by private institutions, insurance companies or even organizations such as the Insurance Institute for Applied Ethics. As long as the provider you wish to use for your training is recognized by your state's department of insurance, you may fulfill your requirement wherever you wish.
California
California is a recent addition to the ever-growing list of states that requires ethics as part of insurance producers' continuing education training. As of Jan. 1, 2007, producers in the state must complete two or four hours of ethics training every two years, depending on the license. California previously required ethics pre-licensing training, but the pre-licensing training does not qualify for continuing education credit under state rules.
