Washington Ethics, Marketing & Unfair Trade Practices
The final state topic covers how a Washington producer must behave in the market: the prohibited unfair trade practices, the duty to handle client money properly, and the advertising and disclosure standards that keep sales honest. Most of these rules come from Washington's Unfair Trade Practices Act and related regulations.
Unfair Trade Practices and Prohibited Conduct
Washington's Unfair Trade Practices Act (based on the NAIC model) prohibits misrepresentation of policy terms, false or misleading advertising, unfair discrimination between similar risks, and deceptive claim practices. Rebating — offering part of the premium or commission, or other valuable consideration, as an inducement to buy — is also prohibited. Violations can lead to fines and license suspension or revocation by the OIC.
Twisting, Churning, and Honest Comparisons
Twisting is using misrepresentation or incomplete comparisons to induce a policyholder to drop an existing policy and buy a new one; churning is a similar replacement abuse using the same insurer's policies. Both are prohibited in Washington. When a producer compares or replaces coverage, the comparison must be complete and fair, and benefits, dividends, and an insurer's financial condition must never be misrepresented.
Fiduciary Duty and Handling Client Funds
Premiums a producer collects belong to the insurer or the client, not the producer. Washington treats this as a fiduciary responsibility: funds must be remitted properly and must not be commingled with personal funds or converted for personal use. Failing to account for premiums, or misappropriating client money, is grounds for discipline and can also be a crime.
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State-specific details
State exam facts
- State regulator
- Washington State Office of the Insurance Commissioner
- Exam vendor
- PSI
- Prelicensing education
- None (not required since July 23, 2023)
- Passing score
- 70%
Who regulates life & health insurance licensing in Washington?
The Washington State Office of the Insurance Commissioner (OIC) licenses producers and contracts with PSI Services to administer the licensing examinations.
Does Washington require prelicensing education for the life & health exam?
No. Prelicensing education has not been required to take a Washington insurance exam since July 23, 2023; candidates may schedule directly with PSI.
How is the Washington life & health exam administered?
The exam is delivered by PSI Services, with separate Life Producer and Disability (health) Producer exams, and a score of at least 70% is required to pass.
Sources: https://www.insurance.wa.gov/producers-adjusters/education/first-time-license/how-schedule-insurance-license-exam, https://www.psiexams.com/
In the Washington Life & Health Insurance Producer Exam guide: A KEY CONCEPT box, a Common Traps list and a Check Yourself set closing each of the 9 national chapters. Practice here stays free.