50-State Survey: Anti-Rebating Laws

State

Statutory Text of Rebating Rule

Statutory Provisions

Regulatory Provisions, Bulletins, and Guidance

Alabama

No property, casualty or surety insurer, or any employee

thereof, and no broker, agent or solicitor shall pay, allow or

give, or offer to pay, allow or give, directly or indirectly, as an

inducement to insurance or after insurance has been effected,

any rebate, discount, abatement, credit, or reduction of the

premium named in a policy of insurance, or any special favor or

advantage in the dividends or other benefits to accrue thereon or

any valuable consideration or inducement whatever not

specified in the policy except to the extent provided for in rating

systems filed with the commissioner by, or on behalf of, the

insurer and approved by the commissioner. § 27-12-14(a).

No person shall knowingly permit or offer to make, or make,

any contract of life insurance, annuity or disability insurance or

agreement as to such contract other than as plainly expressed in

the contract issued thereon, or pay or allow, or give or offer to

pay, allow or give, directly or indirectly, as an inducement to

such insurance or annuity any rebate of premiums payable on

the contract, or any special favor or advantage in the dividends

or other benefits thereon, or any paid employment or contract

for services of any kind, or any valuable consideration or

inducement whatever not specified in the contract, or, directly or

indirectly, give, or sell, or purchase, or offer, or agree to give,

sell, purchase, or allow as inducement to such insurance or

annuity or in connection therewith, and whether or not to be

specified in the policy or contract, any agreement of any form or

nature promising returns and profits, or any stocks, bonds, or

other securities, or interest present or contingent therein of any

insurance company or other corporation, association or

partnership or any dividends or profits accrued, or to accrue

thereon, or offer, promise or give anything of value whatsoever

not specified in the contract. § 27-12-12(a).

Person is defined to include an individual, insurer, company,

The statute does not prohibit:

• Life insurers from paying bonuses to policyholders.

• For policies issued on the industrial debit plan, making

allowance to policyholders who have continuously for a

specified period made premium payments directly to an

office of the insurer in an amount that fairly represents the

savings in collection expense.

• Readjustment of the rate of premium for a group insurance

policy based on loss or expense.

• Life insurers from allowing its bona fide employees to

receive a commission or reduction on premiums paid by

them on policies on their own lives.

• Issuing life or disability insurance policies on a salary

savings, bank draft, preauthorized check or payroll

deduction plan at a reduced rate reasonably related to the

savings made by the use of such plan.

• A written agreement between a life insurer and the insured

for an extension of time for payment of a subsequent

premium on the policy on the condition that the failure to

pay the amount as agreed will lapse the policy.

• Payment of commissions or other compensation to duly

licensed agents.

§ 27-12-13.

No insurer may engage in the following without risk of violating

Alabama law:

• Give a free policy to the bookkeeper, payroll clerk, or

anyone employed in the office of a city, county, state, or

private school system for collecting the premiums from the

members of group insurance coverage and remitting the

premium to the insurer.

• Give a free policy (premium paid) to any city or county

Superintendent of Education, principal, teacher, or president

of a school system for permitting collecting of the premium

money.

• Pay a collection fee, the amount of which being based on the

amount of premiums collected, to the bookkeeper, payroll

clerk, or anyone employed in the office of a city, county,

state, or private school system unless the person is a duly

authorized and licensed producer of the insurer.

• Return a portion of the paid premiums to a person, or to any

function of the school system, such as: the athletic fund,

school cafeteria, general fund, etc. rather than to each

individual insured. § 482-1-040-.03.

Clerical work, however, may be performed provided the

compensation is made on the basis of the volume of work

actually performed and not the volume of premiums collected. §

482-1-040.03(2).

Gifts: The value of the amount of the gift or benefit (defined as

a product “to invite an inquiry or quote from the insurance

buying public,” but not as “an inducement or invitation to enter

into an insurance contract”) may not exceed $15 payable to an

individual or family (there is one gift per family). The gift

cannot be cash, and no rebate can be used as part of the gift. §§

482-1-088-.04(1); 482-1-088-.05.

However, despite the establishment of the $15 threshold, a

State

Statutory Text of Rebating Rule

Statutory Provisions

Regulatory Provisions, Bulletins, and Guidance

association, organization, Lloyd's insurer, society, reciprocal

insurer or interinsurance exchange, partnership, syndicate,

business trust, corporation, and every legal entity. § 27-1-2(3).

“reasonableness” test is used to determine whether the value of

the gift actually acts as an inducement to enter into an insurance

contract regardless of the semantics used in the advertisement. §

482-1-088-.04(2).

Alaska

A property, casualty, or surety insurer or its employee or

representative, or an agent, or solicitor may not pay, allow, give,

or offer to pay, allow, or give, directly or indirectly, as an

inducement to insurance or after insurance has been effected, a

rebate, discount, abatement, credit, or reduction of the premium

named in the policy of insurance, or a special favor or advantage

in the dividends or other benefits to accrue thereon, or any

valuable consideration or inducement, not specified in the

policy, except to the extent provided for in an applicable filing

with the director as provided by law. § 21.36.120.

Except as otherwise expressly provided by law, a person may

not knowingly permit or offer to make or make a contract of life

insurance, life annuity or health insurance, or agreement under

the contract other than as plainly expressed in the contract, or

pay, allow, give or offer to pay, allow, or give, directly or

indirectly, as inducement to the insurance, or annuity, a rebate

of premiums payable on the contract, or a special favor or

advantage in the dividends or other benefits, or paid

employment or contract for services of any kind, or any valuable

consideration or inducement whatever not specified in the

contract; or directly or indirectly give, sell, purchase or offer to

agree to give, sell, purchase, or allow as inducement to the

insurance or annuity or in connection therewith, whether or not

to be specified in the policy or contract, an agreement of any

form or nature promising returns, profits, stocks, bonds, or other

securities, or interest present or contingent in the contract or as

measured by the contract, of an insurance company or other

corporation, association, or partnership, or dividends or profits

accrued or to accrue under the contract; or offer, promise, or

give anything of value that is not specified in the contract. §

21.36.100.

The statute does not prohibit:

• Life insurers from paying bonuses to policyholders.

o Example: Universal life paying premium with cash

values; bonus interest.

• For policies issued on the industrial debit plan, making

allowance to policyholders who have continuously for a

specified period made premium payments directly to an

office of the insurer in an amount that fairly represents the

savings in collection expense.

o Example: Industrial debit life of which little or no

business is written anymore.

• Readjustment of the rate of premium for a group insurance

policy based on loss or expense.

o Example: Large group experience rated plans;

reducing current premiums based on prior year loss

experience.

• Issuance of policies at rates less than the usual rates of

premiums for the policies.

o Example: Lower premium for larger policy amounts;

savings under payroll deduction plans; auto-pay plan

savings.

• A reward under a wellness program established under a

health care plan that favors an individual if the wellness

program meets the several requirements.

• Payment of commission or compensation to persons duly

transacting business.

• Allowing or returning lawful dividends, savings, or

unabsorbed premium deposits to participating policyholders.

• Drawings that are available to any person in the general

public and not tied to insurance.

• Offering different commission levels to licensees as long as

the insurer allows the licensees to select any available level,

The anti-rebating statutes are constitutional. 1996 Attorney

General Letter.

The Alaska Division of Insurance has determined that the

following are violations of the rebating laws:

• Negotiating commission with clients outside of a broker

agreement.

• A gift, service, or anything of value used as an inducement

to listen to a sales pitch or to obtain information that could

lead to a quote.

• Paying a portion of the client’s premium.

Rebates, Nondiscrimination, and Compensation.

State

Statutory Text of Rebating Rule

Statutory Provisions

Regulatory Provisions, Bulletins, and Guidance

the level selected by the licensee is specified in the

agreement, the rates reflect the commission level paid, and

the licensee uses the selected commission level for all

clients.

• Giving away non-valuable items such as pens, calendars,

mugs, etc.

• A producer may reimburse or off-set a fee to a client for all

or part of a commission earned as long as full disclosure has

occurred.

§§ 21.36.110, 21.36.120(d); see also Rebates,

Nondiscrimination, and Compensation.

Arizona

No insurer or employee, insurance producer or representative

thereof shall knowingly charge, demand or receive a premium

for any policy of insurance, other than life or disability

insurance, except in accordance with any applicable filing on

file with the director.

No such insurer, employee, insurance producer or representative

shall offer, pay, allow or give, directly or indirectly, as an

inducement to insurance, or after insurance has been effected,

any rebate, discount, abatement, credit or reduction of the

premium named in a policy of insurance, or any special favor or

advantage in the dividends or other benefits to accrue thereon,

or any valuable consideration or inducement whatever, not

specified in the policy of insurance, except to the extent

provided for in an applicable filing. § 20-451.

Except as otherwise expressly provided by law, no person shall

knowingly permit or offer to make or make any contract of life

insurance, life annuity or disability insurance, or agreement as to

such contract other than as plainly expressed in the contract

issued thereon, or pay or allow, or give or offer to pay, allow or

give, directly or indirectly, as an inducement to such insurance

or annuity, any rebate of premiums payable on the contract, or

any special favor or advantage in the dividends or other benefits

thereon, or any valuable consideration or inducement whatever

The statute does not prohibit:

• Life insurers from paying bonuses to policyholders. § 20-

450.

• For policies issued on the industrial debit plan, making

allowance to policyholders who have continuously for a

specified period made premium payments directly to an

office of the insurer in an amount that fairly represents the

savings in collection expense. § 20-450.

• Readjustment of the rate of premium for a group insurance

policy based on loss or expense. § 20-450.

• Issuing life or disability insurance policies on a salary

savings or payroll deduction plan at a reduced rate

commensurate with the savings made by the use of such

plan. § 20-450.

• A reward under a wellness program established under a

health care if the wellness program meets the several

requirements. § 20-450.

• The payment of commissions or other compensation to

licensed agents, brokers, or solicitors. § 20-451.

• An insurer from allowing or returning to its policyholders

any dividends, savings, or unabsorbed premium deposits. §

20-451.

• An insurer from retaining an independent third party to

conduct a customer feedback effort intended to help the

insurer improve the quality of its products or services and to

The statute does not prohibit:

• An insurer from giving a policyholder a fire protection

service credit when the policyholder is not a subscriber to a

fire protection service.

Bulletin 2014-07.

State

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not specified in the contract. § 20-449.

Person is defined to include an individual, company, insurer,

association, organization, society, reciprocal or inter-insurance

exchange, partnership, syndicate, business trust, corporation

and entity. § 20-105.

offer an insured business or individual a reasonable

incentive to participate in the feedback effort (such an

incentive is presumed reasonable if it does not exceed

$200).

o An insurer may not, however, offer, reference, or

promote an incentive or feedback effort under in

connection with an application for or renewal of

insurance coverage.

o “Feedback effort” means activities that are designed to

elicit customer perceptions on a predetermined set of

topics that are related to the insurer's products or

services, including in-person, telephonic or online

surveys, polls, focus groups, interviews,

questionnaires and other recognized opinion-gathering

mechanisms. § 20-449.

The statute does, however, prohibit an insurer from providing in

any policy the following:

• Employment

• Shares of stock or other securities issued or interest therein

• Advisory board contracts providing for or promising special

profits

• Prizes, goods, wares, merchandise, or tangible property of

an aggregate value of more than $25.

§ 20-452.

Arkansas

No property, casualty, or surety insurer or any employee thereof

and no broker, agent, or solicitor shall pay, allow, or give, or

offer to pay, allow, or give, directly or indirectly, as an

inducement to insure or after insurance has been effected, any

rebate, discount, abatement, credit, or reduction of the premium

named in a policy of insurance, or any special favor or

advantage in the dividends or other benefits to accrue thereon,

or any valuable consideration or inducement whatever not

specified in the policy except to the extent provided for in an

applicable filing with the Insurance Commissioner as provided

by law. § 23-66-308.

The statute does not prohibit:

• Life insurers from paying bonuses to policyholders.

• For policies issued on the industrial debit plan, making

allowance to policyholders who have continuously for a

specified period made premium payments directly to an

office of the insurer in an amount that fairly represents the

savings in collection expense.

• Readjustment of the rate of premium for a group insurance

policy based on loss or expense.

• Engagement in an arrangement that does not violate federal

banking laws.

The statute does allow, however, token gifts of $25 or less in

wholesale value. This includes:

• Ballpoint pens

• Calendars

• Notebooks

• Other items for advertisement purposes

Directive 2A-2011.

The Arkansas Insurance Department has provided guidance

interpreting the prohibition and provides an example of conduct

and their characterization under the rule.

State

Statutory Text of Rebating Rule

Statutory Provisions

Regulatory Provisions, Bulletins, and Guidance

No person shall engage in this state in any trade practice which

is . . . determined . . . to be an unfair method of competition or

an unfair or deceptive act or practice in the business of

insurance (including surplus lines policies and contracts). § 23-

66-205.

Such unfair methods of competition and unfair or deceptive acts

or practices in the business of insurance include rebates,

meaning the act of knowingly:

• Permitting or offering to make or making any life, health,

and annuity insurance contract, or agreement as to the

contract, other than as plainly expressed in the insurance

contract issued thereon;

• Paying, allowing, or giving or offering to pay, allow, or give,

directly or indirectly, as inducement to the insurance contract

any rebate of premiums payable on the contract or any

special favor or advantage in the dividends or other benefits

thereon or any valuable consideration or inducement

whatever not specified in the contract; or

• Giving, selling, or purchasing or offering to give, sell, or

purchase as inducement to the insurance contract or in

connection with the contract any stocks, bonds, or other

securities of any insurance company or other corporation,

association, or partnership or any dividends or profits

accrued thereon or anything of value whatsoever not

specified in the insurance contract. § 23-66-206(10)(A).

Person is defined to include any individual, corporation,

association, partnership, reciprocal exchange, interinsurer,

Lloyd's insurer, fraternal benefit society, and any other legal

entity engaged in the business of insurance, including agents,

brokers, and adjusters. It also includes medical service plans

and hospital service plans. § 23-66-23(4).

• The payment of commissions or other compensation to

licensed agents, brokers, or solicitors.

• An insurer from allowing or returning to its policyholders

any dividends, savings, or unabsorbed premium deposits.

• A licensed insurance consultant who is also a licensed

producer from adjusting or refunding to his or her clients

any part of a consulting fee under a prior written agreement

with a client paying total annual premiums of $100,000 or

more based on commissioners received by the consultant

from insurers.

§§ 23-66-206(10)(B); 23-66-308.

I will be passing out flyers at businesses regarding term

insurance. The flyer tells the recipient about low term

insurance rates and offers a $10 Free Lunch Coupon to a

choice of 15-20 restaurants in the area. If the recipient will

fill out a request for a free no obligation term life quote, I

will deliver a lunch coupon to them for the restaurant of his

or her choice when I deliver the quote. The coupon is

delivered regardless of whether the recipient buys a policy

or not. On the flyer in bold print it states that no purchase is

necessary to receive the $10 coupon. Is this an illegal rebate?

Directive 5-98 [replaced by Directing 2A-2011] allows token

gifts valued at less than $25 to be given out without violating

the rebate laws. Therefore, since the coupons are worth less

than $25, this will not be considered illegal rebating. Producer

FAQs.

State

Statutory Text of Rebating Rule

Statutory Provisions

Regulatory Provisions, Bulletins, and Guidance

California

Colorado

No person shall engage in this state in any trade practice which

is defined . . . to be an unfair method of competition or an unfair

or deceptive act or practice in the business of insurance. § 10-3-

1103.

Such unfair methods of competition and unfair or deceptive acts

or practices in the business of insurance include: Except as

otherwise expressly provided by law, knowingly permitting, or

offering to make, or making any contract of insurance or

agreement as to such contract, other than as plainly expressed in

the insurance contract issued thereon, or paying, or allowing, or

giving, or offering to pay, allow, or give, directly or indirectly,

as inducement to such insurance or annuity, any rebate of

premiums payable on the contract, or any special favor or

advantage in the dividends or other benefits thereon, or any

valuable consideration or inducement whatever not specified in

the contract; or giving, or selling, or purchasing, or offering to

give, sell, or purchase, as inducement to such insurance contract

or annuity or in connection therewith any stocks, bonds, or other

securities of any insurance company or other corporation,

association, or partnership, or any dividends or profits accrued

thereon, or anything of value whatsoever not specified in the

contract. § 10-3-1104(1)(g).

Person is defined to include any individual, corporation,

association, partnership, reciprocal exchange, interinsurer,

Lloyds insurer, nonadmitted insurer, fraternal benefit society,

and other legal entities engaged in the insurance business,

including agents, limited insurance representatives, agencies,

brokers, surplus line brokers, and adjusters. It also includes

medical service plans, hospital service plans, and health

maintenance organizations. § 10-3-1102(3).

Put simply, the statute prohibits the practice of rebating or

offering anything of value not stated in the insurance contract as

an inducement. Bulletin B-5.27.

Notably, Colorado does not have a blanket prohibition on the

offering of “free insurance” in connection with the sale of goods

or service. The Division of Insurance found, however, that the

offer of free cell phone insurance in connection with the sale of

a cell phone constitutes a rebate in violation of the statute.

Bulletin B-5.27.

State

Statutory Text of Rebating Rule

Statutory Provisions

Regulatory Provisions, Bulletins, and Guidance

Connecticut

No insurance company doing business in this state, or attorney,

producer or any other person shall pay or allow, or offer to pay

or allow, as inducement to insurance, any rebate of premium

payable on the policy, or any special favor or advantage in the

dividends or other benefits to accrue thereon, or any valuable

consideration or inducement not specified in the policy of

insurance. No person shall receive or accept from any

company, or attorney, producer or any other person, as

inducement to insurance, any such rebate of premium payable

on the policy, or any special favor or advantage in the dividends

or other benefit to accrue thereon, or any valuable consideration

or inducement not specified in the policy of insurance. No

person shall be excused from testifying or from producing any

books, papers, contracts, agreements or documents, at the trial

of any other person charged with the violation of any provision

of this section or of section 38a-446, on the ground that such

testimony or evidence may tend to incriminate him, but no

person shall be prosecuted for any act concerning which he is

compelled to so testify or produce documentary or other

evidence, except for perjury committed in so testifying. § 38a-

825.

The statute does not prohibit:

• Payment of bonuses to policyholders otherwise abating their

premiums in whole or in part out of surplus accumulated

from nonparticipating insurance (provided any such bonuses

or abatement of premiums shall be fair and equitable to

policyholders and for the best interests of the company and

its policyholders).

• For policies issued on the industrial debit plan, making

allowance to policyholders who have continuously for a

specified period made premium payments directly to an

office of the insurer in an amount that fairly represents the

saving in collection expense.

• Readjustment of the rate of premium for a group insurance

policy based on loss or expense experience, or both, at the

end of the first or any subsequent policy year, which may be

made retroactive for such policy year. § 38a-816(9).

Though the Insurance Department previous had issued a

Bulletin permitting gifts of nominal value (those that did not

exceed in the aggregate $15), the Bulletin was rescinded.

Bulletin S-12; Bulletin S-13.

Delaware

No property, casualty or surety insurer or any employee or

representative thereof, and no broker, agent or solicitor shall

pay, allow or give, or offer to pay, allow or give, directly or

indirectly, as an inducement to insurance, or after insurance has

been effected, any rebate, discount, abatement, credit or

reduction of the premium named in a policy of insurance, or any

special favor or advantage in the dividends or other benefits to

accrue thereon, or any valuable consideration or inducement

whatever, not specified or provided for in the policy, except to

the extent provided for in an applicable filing with the

Commissioner as provided by law.

No insured named in a policy, nor any employee of such

insured, shall knowingly receive or accept directly or indirectly

any such rebate, discount, abatement, credit or reduction of

premium, or any such special favor or advantage or valuable

The statute does not prohibit:

• Payment of commissions or other compensation to licensed

agents, brokers, or solicitors.

• Any insurer from allowing or returning to its participating

policyholders, dividends, savings or unabsorbed premium

deposits.

• Life insurers from paying bonuses to policyholders.

• For policies issued on the industrial debit plan, making

allowance to policyholders who have continuously for a

specified period made premium payments directly to an

office of the insurer in an amount that fairly represents the

savings in collection expense.

• Readjustment of the rate of premium for a group insurance

policy based on loss or expense.

• Reduction in premium rates for life or health insurance

policies on salary savings, payroll deductions, preauthorized

State

Statutory Text of Rebating Rule

Statutory Provisions

Regulatory Provisions, Bulletins, and Guidance

consideration or inducement. 18 § 2304(15); FAQs.

Except as otherwise expressly provided by law, no person shall

knowingly permit or offer to make or make any contract of life

insurance, life annuity or accident and health insurance, or

agreement as to such contract other than as plainly expressed in

the insurance contract issued thereon, or pay or allow, or give or

offer to pay, allow or give directly or indirectly, or knowingly

accept, as inducement to such insurance or annuity, any rebate

of premiums payable on the contract, or any special favor or

advantage in the dividends or other benefits thereon, or any paid

employment or contract for services of any kind, or any valuable

consideration or inducement whatever not specified in the

contract, or directly or indirectly give, or sell, or purchase or

offer or agree to give, sell or purchase, or allow as an

inducement to such insurance contract or annuity or, in

connection therewith and whether or not specified in the policy

or contract, any agreement of any form or nature promising

returns and profits, or any stocks, bonds or other securities, or

interest present or contingent therein or as measured thereby, or

any insurer or any insurance company or other corporation,

association or partnership, or any dividends or profits accrued

thereon, or to accrue thereon, or anything of value whatsoever

not specified in the contract. 18 § 2304(14).

Person is defined to include any individual, corporation,

association, partnership, reciprocal exchange, interinsurer,

Lloyds insurer, fraternal benefit society and other legal entity

engaged in the business of insurance, including agents, brokers

and adjusters. It also includes medical service plans and

hospital service plans. 18 § 2302(4).

checks, bank drafts, or similar plans in amounts reasonably

commensurate with the saving s made by the use of such

plans.

18 § 2304(15)(d), (e).

District of

Columbia

No person offering property, casualty, or surety insurance, or an

employee or representative thereof, shall pay, allow, or give, or

offer to pay, allow, or give, directly or indirectly, as an

inducement to insure, or after insurance has been effected, a

rebate, discount, abatement, credit, or reduction of the premium

The statute does not prohibit:

• The payment of commissions or other compensation to duly

licensed agents or brokers. § 31-2231.13(e).

• Any insurer from allowing or returning to its participating

policyholders lawful dividends, savings, or unabsorbed

State

Statutory Text of Rebating Rule

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Regulatory Provisions, Bulletins, and Guidance

named in a policy of insurance, or a special favor or advantage

in the dividends or other benefits to accrue thereon, or a

valuable consideration or inducement whatsoever, not specified

or provided for in the policy, except to the extent provided for in

an applicable filing with the Commissioner as allowed by law. §

31-2231.13.

No person shall knowingly permit, or offer to make, a policy or

contract of life insurance, annuity, or accident and health

insurance, or agreement as to such policy or contract, other than

as plainly expressed in the policy or contract issued thereon; or

pay, allow, give, or offer to pay, allow, or give, directly or

indirectly as inducement to such policy or contract: a rebate of

premiums payable on the policy or contract; a special favor or

advantage in the dividends or other benefits thereon; or a

valuable consideration or inducement not specified in the

contract.

No person shall directly or indirectly give, sell, purchase, or

offer, or agree to give, sell, purchase, or offer as inducement to

the policy or contract specified above, or in connection

therewith: stocks, bonds, or other securities of an insurance

company or other corporation, association, or partnership;

dividends or profits accrued or to accrue thereon; or anything of

value not specified in the contract.

Finally, no person shall receive or accept as inducement to a

policy or contract: a rebate of premium payable on the policy or

contract; a special favor or advantage in the dividends or other

benefits to accrue on the policy or contract; or a valuable

consideration or inducement not specified in the contract. § 31-

2231.12.

Person is defined to include “any natural or artificial entity,

including individuals, partnerships, associations, trusts, or

corporations. § 31-2231.01(8).

premium deposits. § 31-2231.13(e).

• The use of educational materials, promotional materials, or

articles of merchandise that cost less than $10. § 31-

2231.13(h).

• Life insurers from paying bonuses to policyholders. § 31-

2231.12(d).

• For policies issued on the industrial debit plan, making

allowance to policyholders who have continuously for a

specified period made premium payments directly to an

office of the insurer in an amount that fairly represents the

savings in collection expense. § 31-2231.12(d).

• Readjustment of the rate of premium for a group insurance

policy based on loss or expense. § 31-2231.12(d).

• Reduction of premium rates for policies of large amounts.

• Issuing life or health insurance policies on a salary savings,

payroll deduction, preauthorized, post-dated, automatic

check, or draft plan at a reduced rate reasonably related to

the savings made by the use of such plan. § 31-2231.12(d).

• Issuing health insurance policies which provide for increases

in benefits to policyholders who maintain their policies

continuously in force without lapse for specified periods. §

31-2231.12(d).

State

Statutory Text of Rebating Rule

Statutory Provisions

Regulatory Provisions, Bulletins, and Guidance

Florida

No insurance agency or agent shall rebate any portion of a

commission except as follows:

• The rebate shall be available to all insureds in the same

actuarial class.

• The rebate shall be in accordance with a rebating schedule

filed by the agent with the insurer issuing the policy to which

the rebate applies.

• The rebating schedule shall be uniformly applied in that all

insureds who purchase the same policy through the agent for

the same amount of insurance receive the same percentage

rebate.

• Rebates shall not be given to an insured with respect to a

policy purchased from an insurer that prohibits its agents

from rebating commissions.

• The rebate schedule is prominently displayed in public view

in the agent’s place of doing business and a copy is available

to insureds on request at no charge.

• The age, sex, place of residence, race, nationality, ethnic

origin, marital status, or occupation of the insured or location

of the risk is not utilized in determining the percentage of the

rebate or whether a rebate is available. § 626.572.

Additional requirements include:

• The insurance agency agent shall maintain a copy of all

rebate schedules for the most recent 5 years and their

effective dates.

• No rebate shall be withheld or limited in amount based on

factors which are unfairly discriminatory.

• No rebate shall be given which is not reflected on the rebate

schedule.

• No rebate shall be refused or granted based upon the

purchase or failure of the insured or applicant to purchase

collateral business. § 626.572.

Georgia

No insurer or employee of such insurer and no broker or agent

shall pay, allow, or give, or offer to pay, allow, or give, directly

or indirectly as an inducement to insurance or after insurance

has been effected, any rebate, discount, abatement, credit, or

reduction of the premium named in a policy of insurance, or any

special favor or advantage in the dividends or other benefits to

accrue on such policy of insurance, or any valuable

consideration or inducement whatever, not specified in the

policy of insurance, except to the extent provided for in an

applicable filing. No insured named in a policy of insurance

nor any employee of the insured shall knowingly receive or

accept, directly or indirectly, any such rebate, discount,

abatement, credit, or reduction of premium, or any special favor

or advantage or valuable consideration or inducement. § 33-9-

36(c).

The statute does not prohibit:

• Life insurers from paying bonuses to policyholders.

• For policies issued on the industrial debit plan, making

allowance to policyholders who have continuously for a

specified period made premium payments directly to an

office of the insurer in an amount that fairly represents the

savings in collection expense.

• Readjustment of the rate of premium for a group insurance

policy based on loss or expense.

• Issuing life or accident and sickness policies covering bona

fide employees at a rate less than the rate charged other

persons in the same class.

• Issuing life or accident and sickness insurance policies on a

salary savings, payroll deduction, preauthorized, post-dated,

automatic check, or draft plan at a reduced rate reasonably

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No person shall engage in this state in any trade practice which

is . . . determined . . . to be an unfair method of competition or

an unfair or deceptive act or practice in the business of

insurance. § 33-6-3.

Such unfair methods of competition and unfair or deceptive acts

or practices in the business of insurance include: Knowingly

permitting or offering to make or making any contract of

insurance or agreement as to the contract other than as plainly

expressed in the contract issued thereon; paying, allowing,

giving, or offering to pay, allow, or give directly or indirectly, as

inducement to any contract of insurance, any rebate of

premiums payable on the contract, any special favor or

advantage in the dividends or other benefits thereon, or any

valuable consideration or inducement whatever not specified in

the contract, except in accordance with an applicable rate filing,

rating plan, or rating system filed with and approved by the

Commissioner; giving, selling, purchasing, or offering to give,

sell, or purchase as inducement to such insurance or in

connection therewith any stocks, bonds, or other securities of

any company, any dividends or profits accrued thereon, or

anything of value whatsoever not specified in the contract; or

receiving or accepting as inducement to contracts of insurance

any rebate of premium payable on the contract, any special

favor or advantage in the dividends or other benefit to accrue

thereon, or any valuable consideration or inducement not

specified in the contract. § 33-6-4(8)(B).

Person is defined to include an individual, corporation,

association, partnership, reciprocal exchange, interinsurer,

Lloyd's insurer, fraternal benefit society, and any other legal

entity engaged in the business of insurance, including but not

limited to agents, brokers, counselors, and adjusters. § 33-6-2.

related to the savings made by the use of such plan.

• The payment of commissions or other compensation to duly

licensed agents and brokers.

• Payment by an insurance agent of part or all of the

commissions on public insurance to a nonprofit association

of insurance agents which is affiliated with a recognized

state or national insurance agents’ association.

• Any insurer from allowing or returning to its participating

policyholders dividends, savings, or unabsorbed premium

deposits.

• The payment for food or refreshments by an insurer for

current or prospective clients during sales presentations and

seminars, provided that no insurance or annuity

applications or contracts are offered or accepted at such

presentations or seminars.

• The payment for business meals and entertainment by a n

insurer or an agent thereof for current or prospective

clients.

• Insurers from advertising or conducting promotional

programs whereby prizes, goods, wares, store gift cards,

gift certificates, sporting event tickets, or merchandise—not

exceeding $100 in value per customer in the aggregate in

any one calendar year—are given to current and

prospective customers. The giving of the item, however,

must not be contingent on the sale or renewal of a policy.

§§ 33-9-36(d)-(f); 33-6-4(8)(C).

State

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Hawaii

No person shall engage in this state in any trade practice which

is . . . determined . . . to be an unfair method of competition or

an unfair or deceptive act or practice in the business of

insurance. § 431:13-102.

Such unfair methods of competition and unfair or deceptive acts

or practices in the business of insurance include: Knowingly

permitting or offering to make or making any contract of

insurance, or agreement as to the contract other than as plainly

expressed in the contract, or paying or allowing, or giving or

offering to pay, allow, or give, directly or indirectly, as

inducement to the insurance, any rebate of premiums payable on

the contract, or any special favor or advantage in the dividends

or other benefits, or any valuable consideration or inducement

not specified in the contract; or giving, selling, or purchasing, or

offering to give, sell, or purchase as inducement to the insurance

or in connection therewith, any stocks, bonds, or other securities

of any insurance company or other corporation, association, or

partnership, or any dividends or profits accrued thereon, or

anything of value not specified in the contract. §§ 431:13-

103(a)(8); 481-7.

Person is defined to include any individual, company, insurer,

association, organization, group, reciprocal or interinsurance

exchanges, partnership, business, trust, or corporation. § 431:1-

212.

The statute does not prohibit:

• Life insurers from paying bonuses to policyholders.

• For policies issued on the industrial debit plan, making

allowance to policyholders who have continuously for a

specified period made premium payments directly to an

office of the insurer in an amount that fairly represents the

savings in collection expense.

• Readjustment of the rate of premium for a group insurance

policy based on loss or expense.

• The distribution of savings, earnings, or surplus equitably

among a class of policyholders.

§ 431:13-1003(a)(9).

Idaho

Except as otherwise expressly provided by law, no person shall

knowingly make, permit to be made, or offer to make any

contract of insurance, or of annuity, or agreement as to such

contract, other than as plainly expressed in the contract issued

thereon, or pay or allow, or give or offer to pay, allow, or give,

directly or indirectly, as inducement to such insurance or

annuity or in connection therewith, any rebate of premiums

payable on the contract, or of any producer’s commission

related thereto, or any special favor or advantage in the

dividends or other benefits thereon, or any paid employment or

contract for services of any kind, or any valuable consideration

The statute does not prohibit:

• The payment of commissions or other compensation to duly

licensed producers.

• Any insurer from allowing or returning to its participating

policyholders the usual and ordinary dividends, savings, or

unabsorbed premium deposits.

• An insurer from providing to a policyholder (or prospective

policyholder) any prizes, goods, wares, merchandise,

articles, or property of an aggregate value not exceeding

$200 in a calendar year.

o Note: The $200 exception toe the rebate rule applies

As a general rule, if goods or services not specified in the

contract are offered or provided as an inducement to purchase or

renew insurance, a reasonable charge must be imposed to avoid

a violation of the statute. The charge should reflect the actual

value of the good or service provided and should not be less

than the cost of providing the good or service. Bulletin 11-03.

Services that typically fall within the traditional notion of

“customer service” are not considered by the Department of

Insurance to be a rebate or inducement. Such services include:

• Offering a 24 hour hotline for claims

State

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or inducement whatever not specified in the contract; or directly

or indirectly give, or sell, or purchase or offer or agree to give,

sell, purchase, or allow as inducement to such insurance or

annuity or in connection therewith, and whether or not specified

or to be specified in the policy or contract, any agreement of any

form or nature promising returns and profits, or any stocks,

bonds, or other securities, or interest present or contingent

therein or as measured thereby, of any insurer or other person,

or any dividends or profits accrued or to accrue thereon; or

offer, promise or give anything of value whatsoever not

specified in the contract. Nor shall any insured, annuitant, or

policyholder or employee thereof, or prospective insured,

annuitant or policyholder, or employee thereof, knowingly

accept or receive, directly or indirectly, any such prohibited

contract, agreement, rebate, advantage, employment, or other

inducement. § 41-1314; Bulletin 11-03.

Person is defined to include any individual, insurer, company,

association, organization, Lloyd’s insurer, society, reciprocal

insurer or interinsurance exchange, partnership, syndicate,

business trust, corporation and every legal entity. § 41-104.

only to goods—not services. Bulletin 11-03.

§ 41-1314(2)-(3)

• Responding to questions

• Providing advance regarding coverage or benefits

• Maintaining loss runs

• Issuing insurance cards

Bulletin 11-03.

Illinois

No company doing business in this state and no insurance agent

or broker shall offer, promise, allow, give, set off or pay,

directly or indirectly, any rebate of or part of the premium

payable on the policy, or on any policy or agent's commission

thereon or earnings, profits, dividends or other benefits founded,

arising, accruing or to accrue thereon or therefrom, or any

special advantage in date of policy or age of issue, or any paid

employment or contract for services of any kind or any other

valuable consideration or inducement to or for insurance on any

risk in this state, now or hereafter to be written, or for or upon

any renewal of any such insurance, which is not specified in the

policy contract of insurance, or offer, promise, give, option, sell,

purchase any stocks, bonds, securities or property or any

dividends or profits accruing or to accrue thereon, or other thing

of value whatsoever as inducement to insurance or in connection

therewith, or any renewal thereof which is not specified in the

The statute does not prevent a company:

• From paying a bonus to policyholders or otherwise abating

their premiums out of surplus accumulated from

nonparticipating insurance.

• That transacts industrial life insurance from returning to

policyholders who have made premium payments directly

to the insurer for at least 1 year the percentage of premium

which the insurer would otherwise have paid for the weekly

collection of such premium.

• Taking of a bonda fide obligation, with interest at 6% per

year in payment of any premium.

• From offering a child passenger restraint system or a

discount from the purchase price of a child passenger

restraint system to policyholders when the purpose of the

system is the safety of the child and compliance with

Illinois law.

An insurer may provide a service not specified in the policy or

contract without violating the anti-rebating and inducement

provisions if: (1) the service directly relates to the sale or

servicing of a policy or risk reduction, or provides general

information about insurance; and (2) the insurer provides the

service in a fair and non-discriminatory manner. Bulletin 2012-

11.

The Department of Insurance has noted that the following

services will generally be permitted under the law:

• Risk assessments, market analysis, and benefit analytics

• Insurance-related regulatory and legislative compliance

• Tax preparation on behalf of an employer of Schedule A

• Information to group policy or contract holders and

members under group insurance policies

• Certain services provided under COBRA

State

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policy. 215 ILCS 5/151; Bulletin 2012-11.

An insurer also may not provide “free” insurance or offer to pay

part of the insurance premium for an insured or potential insured

as an incentive to purchase goods, service, or other insurance.

Bulletin 2012-11.

215 ILCS 5/151.

• Certain services provided in accordance with HIPAA and

the PPACA

• Wellness services and program

• Loss control, safety, and claims

Bulletin 2012-11.

Additionally, there are several promotional and charitable

efforts that may also be permissible:

• Engaging with clients in social settings and during

activities that may include meals, sporting events, or other

non-insurance related activities.

• Advertising and marketing insurance-related services

through many means, including gifts of minimal value,

such as

o Pens

o Pencils

o Calendars

o Atlases

o Golf balls

• Marketing of a brand or logo on merchandise that is

provided to the general public

• Sponsoring events whether charitable or not

• Providing educational seminars open to the general public

where food may or may not be served (this is acceptable so

long as no actual selling of a product or service takes place

at the event)

• Providing contests or raffles in which the consumer

receives a free chance to win a prize (this is acceptable so

long as they are open to the public and there is no

obligation for the consumer to purchase or renew insurance

to enter, win, or claim the prize)

o Example: An offer of a gift card to quote a customer’s

insurance where there is no obligation to purchase

insurance.

• Donating earned commissions to charities (this is

acceptable so long as clients or prospective clients have no

influence over which charity receives the donation, the

State

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donation is not in the client’s name, and no client or

prospective client becomes eligible for a tax benefit from

the donation)

Bulletin 2012-11.

The following, however, are prohibited under Illinois law:

• Flexible spending administration services

• Legal services

• Payroll services

• Referrals to non-insurance related third-party service

providers through which an insured may receive a

discounted rate while the producer remains the producer of

record

• Advice regarding compliance with federal and state laws

concerning human resources issues not relating to the

insurance provided

• Management of employee benefit programs

• Development of employee handbooks and training

• Services related to employee compensation, discipline, job

descriptions, leaves of absence, organizational

development, business policies and practices, staffing and

recruiting.

Bulletin 2012-11.

Indiana

No person shall engage in this state in any trade practice which

is defined . . . as an unfair method of competition or as an unfair

or deceptive act or practice in the business of insurance. § 27-4-

1-3.

Such unfair methods of competition and unfair or deceptive acts

or practices in the business of insurance include: Except as

otherwise expressly provided by law, knowingly permitting or

offering to make or making any contract or policy of insurance

of any kind or kinds whatsoever, including but not in limitation,

life annuities, or agreement as to such contract or policy other

than as plainly expressed in such contract or policy issued

thereon, or paying or allowing, or giving or offering to pay,

The statute does not prohibit:

• Paying bonuses to policyholders (or otherwise abating their

premiums) out of surplus accumulated from

nonparticipating insurance, so long as any such bonuses or

abatement are fair and equitable to policyholders and for the

best interests of the company and its policyholders.

• For policies issued on the industrial debit plan, making

allowance to policyholders who have continuously for a

specified period made premium payments directly to an

office of the insurer in an amount that fairly represents the

savings in collection expense.

• Readjustment of the rate of premium for a group insurance

policy based on loss or expense.

Gifts to a consumer are prohibited if the gift is an inducement to

(or conditioned upon) the purchase or renewal of insurance. If it

is unrelated to the purchase or renewal of insurance, a small

item with a fair market value of $25 or less may be given.

Examples of such items include a promotional handout,

advertising product, or mean.

Contests or raffles in which the consumer receives a free chance

to win are acceptable as long as they are open to the public and

there is no obligation for the consumer to purchase or renew

insurance to enter, win, or claim the prize. Prizes are not limited

to a $25 value; however, the value of the prize divided by the

reasonably expected number of entrants must not exceed $25

State

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allow, or give, directly or indirectly, as inducement to such

insurance, or annuity, any rebate of premiums payable on the

contract, or any special favor or advantage in the dividends,

savings, or other benefits thereon, or any valuable consideration

or inducement whatever not specified in the contract or policy;

or giving, or selling, or purchasing or offering to give, sell, or

purchase as inducement to such insurance or annuity or in

connection therewith, any stocks, bonds, or other securities of

any insurance company or other corporation, association,

limited liability company, or partnership, or any dividends,

savings, or profits accrued thereon, or anything of value

whatsoever not specified in the contract. § 27-4-1-4(a)(8).

Person is defined to include any individual, corporation,

company including any farm mutual insurance company,

association, partnership, firm, reciprocal exchange, inter-

insurer, Lloyds insurers, society, fraternal benefit society, lodge,

order, council, corps, and any other association or legal entity,

engaged in the business of insurance, including but not in

limitation of the foregoing, insurance producers, brokers,

solicitors, advisors, auditors, and adjusters. § 27-4-1-2(a).

No company acting through its officers or members, attorney-

in-fact, or by any other party, no officer of a company acting on

the officer's own behalf and no insurance producer, broker, or

solicitor, personally or by any other party, shall offer, promise,

allow, give, set off or pay, directly or indirectly, any rebate of or

part of the premium payable on a policy, or any insurance

producer's commission thereon, or earnings, profits, dividends

or other benefits founded, arising, accruing, or to accrue thereon

or therefrom, or any special advantage in date of policy or age

of issue, or any paid employment or contract for services of any

kind, or any other valuable consideration or inducement, to or

for insurance on any risk in this state, now or hereafter to be

written, or for or upon any renewal of any such insurance, which

is not specified in the policy contract of insurance, or offer,

promise, give, option, sell or purchase any stocks, bonds,

• Paying by an insurer money, commission, or brokerage.

§ 27-4-1-4(a)(8)(A)-(D).

per entrant.

The following list of services, if appropriate in scope, directly

related to the insurance product being sold, or intended to

reduce claims, and provided in a fair and non-discriminatory

way would generally not be prohibited:

• Loss control, including wellness programs

• Claim filing assistance

• COBRA administration

• HIPAA compliance

• Risk management or analysis

• Regulatory and legislative updates

• Group policy administration

• Establishment and administration of employer-sponsored

125 plans, FSAs, and HRAs

The following list of services, if provided free or at reduced

cost, could be considered by the Department as violations of the

anti-rebating statute provided the service is no specifically

stated in the insurance policy or provided for in applicable

filings:

• Human resource (personnel)

• Legal

• Payroll

• Referrals to third-party service providers that offer

discounted rates contingent upon the purchase or renewal of

insurance

• Tax preparation

• Accounting

Bulletin 177.

State

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securities, or property, or any dividends or profits accruing or to

accrue thereon, or other thing of value whatsoever as

inducement to insurance or in connection therewith, or any

renewal thereof, which is not specified in the policy. § 27-1-20-

30.

A similar restraint is placed on unlicensed sellers as well. § 27-

1-15.6-13.

Iowa

A person shall not engage in this state in any trade practice

which is defined . . . to be an unfair method of competition, or

an unfair or deceptive act or practice in the business of

insurance. § 507B.3.

Such unfair methods of competition and unfair or deceptive acts

or practices in the business of insurance include: Except as

otherwise expressly provided by law, knowingly permitting or

offering to make or making any contract of life insurance, life

annuity or accident and health insurance, or agreement as to

such contract other than as plainly expressed in the contract

issued thereon, or paying or allowing, or giving or offering to

pay, allow, or give, directly or indirectly, as inducement to such

insurance, or annuity, any rebate of premiums payable on the

contract, or any special favor or advantage in the dividends or

other benefits thereon, or any valuable consideration or

inducement whatever not specified in the contract; or giving, or

selling, or purchasing or offering to give, sell, or purchase as

inducement to such insurance or annuity or in connection

therewith, any stocks, bonds, or other securities of any insurance

company or other corporation, association, or partnership, or

any dividends or profits accrued thereon, or any thing of value

whatsoever not specified in the contract.§ 507B.4(3)(i).

Person is defined to include any individual, corporation,

association, partnership, reciprocal exchange, interinsurer,

fraternal beneficiary association, and any other legal entity

engaged in the business of insurance, including insurance

producers and adjusters. § 507B.2(1).

The statute does not prohibit the following:

• Life insurers from paying bonuses to policyholders.

• For policies issued on the debit plan, making allowance to

policyholders who have continuously for a specified period

made premium payments directly to an office of the insurer

in an amount that fairly represents the savings in collection

expense.

• Readjustment of the rate of premium for a group insurance

policy based on loss or expense.

§ 507B.4(3)(i)(2)

The Insurance Department has also found that other activities

and services do not fall within the scope of the prohibition,

including:

• Engaging with clients in social settings and during activities

that may include meals, sporting events, or other non-

insurance related activities.

• Advertising and marketing insurance-related services

through many means, including gifts of minimal value, such

o Pens

o Pencils

o Calendars

o Atlases

o Golf balls

• Marketing of a brand or logo on merchandise that is

provided to the general public

• Sponsoring events whether charitable or not

• Providing educational seminars open to the general public

where food may or may not be served (this is acceptable so

long as no actual selling of a product or service takes place

at the event)

• Providing contests or raffles in which the consumer receives

a free chance to win a prize (this is acceptable so long as

they are open to the public and there is no obligation for the

consumer to purchase or renew insurance to enter, win, or

claim the prize)

o Example: An offer of a gift card to quote a customer’s

insurance where there is no obligation to purchase

insurance.

State

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• Donating earned commissions to charities (this is acceptable

so long as clients or prospective clients have no influence

over which charity receives the donation, the donation is not

in the client’s name, and no client or prospective client

becomes eligible for a tax benefit from the donation)

• Providing services in connection with an insurance policy,

such as newsletters or value-added services, if they are

related to the type of insurance purchased and are intended

to reduce claims

Bulletin 08-15; Bulletin 08-16.

The Insurance Department, however, found that certain

additional actions would raise violate the rebating provision,

including:

• Specific reductions in the commission or premium at the

time of sale or renewal.

• Unrelated products, memberships, or services provided

solely upon purchase or renewal of an insurance policy.

Bulletin 08-15; Bulletin 08-16.

Kansas

No person shall engage in this state in any trade practice which

is defined . . . to be . . . an unfair method of competition or an

unfair or deceptive act or practice in the business of insurance. §

40-2403.

Such unfair methods of competition and unfair or deceptive acts

or practices in the business of insurance include: Except as

otherwise expressly provided by law, knowingly permitting,

offering to make or making any contract of life insurance, life

annuity or accident and health insurance, or agreement as to

such contract other than as plainly expressed in the insurance

contract issued thereon; paying, allowing, giving or offering to

pay, allow or give, directly or indirectly, as inducement to such

insurance, or annuity, any rebate of premiums payable on the

contract, any special favor or advantage in the dividends or

other benefits thereon, or any valuable consideration or

inducement whatever not specified in the contract; or giving,

selling, purchasing or offering to give, sell or purchase as

The statute does not prohibit:

• Life insurers from paying bonuses to policyholders.

• For policies issued on the industrial debit plan, making

allowance to policyholders who have continuously for a

specified period made premium payments directly to an

office of the insurer in an amount that fairly represents the

savings in collection expense.

• Readjustment of the rate of premium for a group insurance

policy based on loss or expense.

§ 40-2404(8)(b).

State

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inducement to such insurance contract or annuity or in

connection therewith, any stocks, bonds or other securities of

any insurance company or other corporation, association or

partnership, or any dividends or profits accrued thereon, or

anything of value whatsoever not specified in the contract. § 40-

2404(8).

Person is defined to include any individual, corporation,

association, partnership, reciprocal exchange, inter-insurer,

Lloyd's insurer, fraternal benefit society and any other legal

entity engaged in the business of insurance, including agents,

brokers and adjusters. Person also means any nonprofit medical

and hospital service corporations, [ . . . ] administrators,[ . . . ]

and health maintenance organizations. § 40-2402(a).

Kentucky

No insurer or employee or representative thereof shall

knowingly charge, demand, or receive a premium for any

insurance policy except in accordance with the applicable filing

on file with the commissioner. No such insurer, employee, or

representative shall pay, allow, or give, or offer to pay, allow, or

give, directly or indirectly, as an inducement to insurance or

after insurance has been effected, any rebate, discount,

abatement, credit or reduction of the premium named in a

policy, or any special favor or advantage in the dividends or

other benefits to accrue thereon, or any valuable consideration

or inducements whatever, or give, sell, or purchase, or offer to

give, sell, or purchase anything of value whatsoever not

specified in the policy, except to the extent provided for in such

applicable filing. § 304.12-090(1).

The statute prohibits the following:

• Any employment.

• Any shares of stock or other securities issued or any rights

thereto.

• Any advisory board contract or any similar agreement

offering or providing for profits or special returns or special

dividends.

• Any prizes, goods, wares, merchandise, or property of an

aggregate value in excess of $25. § 304.12-110.

This does not prohibit the following:

• Payment of lawfully earned commission or compensation to

duly licensed insurers (or compensation disclosed in a written

disclosure agreement).

• Distribution of dividends, savings, or the unused/unabsorbed

portion of premiums and premium deposits by a participating

insurer to its participating policyholders.

• Furnishing of information, advice, programs, or services that

are intended to reduce the future cost of insurance. For a non-

exclusive list, see § 304.12-100(3).

• Life insurers from paying bonuses to policyholders.

• For policies issued on the debit plan, making allowance to

The following insurance business practices violate Kentucky

law:

• Reducing agent commissions to reduce a premium to a

customer. Advisory Opinion 2003-01.

• Offering administrative services at a free or reduced cost in

connection with an insurance transaction. Advisory Opinion

2004-05.

With respect to the $25 limit established in § 304.12-110(4),

when determining whether a violation exists, the Kentucky

Office of Insurance will consider the aggregate value of the

prizes, goods, and wares rather than the cost of such items. See

Advisory Opinion 2007-01.

State

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policyholders who have continuously for a specified period

made premium payments directly to an office of the insurer

in an amount that fairly represents the savings in collection

expense.

• Readjustment of the rate of premium for a group insurance

policy based on loss or expense.

• An insurer from waiving, in whole or in part, a

policyholder’s deductible for food spoilage for an insured

risk located in a county declared to be a federal disaster area.

• Payment of any compensation, fee, or other consideration to

an individual not licensed to sell insurance if that individual

sells, solicits, or negotiates rental vehicle insurance as

permitted under Kentucky law.

§ 304.12-100.

The allowance for furnishing information includes (but is not

limited to):

• Providing software to administer an insured’s employee

benefits or risk management programs

• Employee wellness programs

• Risk management services

• Loss control services

• Workers’ compensation analysis forecasting

• Any other service designed to assist in the efficient

administration of a policyholder’s insurance program

§ 304.12-100(3).

Louisiana

No person shall engage in this state in any trade practice which

is defined . . . to be an unfair method of competition or an unfair

or deceptive act or practice in the conduct of the business of

insurance, including unauthorized insurance. § 22:1963.

Such unfair methods of competition and unfair or deceptive acts

or practices in the business of insurance include: Except as

otherwise expressly provided by law, knowingly permitting or

offering to make or making any contract of insurance including

life insurance, life annuity or health and accident insurance, or

The statute does not prohibit:

• Paying bonuses to policyholders or otherwise abating their

premiums in whole or in part out of surplus accumulated

from nonparticipating insurance provided that any such

bonuses or abatement of premiums shall be fair and equitable

to policyholders.

• For policies issued on the debit plan, making allowance to

policyholders who have continuously for a specified period

paid premiums in advance or continuously for a specified

period made premium payment directly to an office of the

Marketing Practices: According to the Department of

Insurance, provided that there is no quid pro quo arrangement,

common and ordinary marketing practices do not constitute

rebating. Common and ordinary marketing practices include

(but are not limited to):

• The giving of tangible goods (such as tee-shirts, caps, pens,

calendars, etc.)

• The giving or purchase of consumables (such as food and

beverages)

• The provision of continuing education course materials or

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agreement as to such contract other than as plainly expressed in

the contract issued thereon, or paying or allowing, or giving or

offering to pay, allow, or give, directly or indirectly, as

inducement to such insurance, or annuity, any rebate of

premiums payable on the contract, or any special favor or

advantage in the dividends or other benefits thereon, or any

valuable consideration or inducement whatever not specified in

the contract; or giving, or selling, or purchasing or offering to

give, sell, or purchase as inducement to such insurance or

annuity or in connection therewith, any stock, bonds, or other

securities of any insurer or other corporation, association, or

partnership, or any dividends or profits accrued thereon, or

anything of value whatsoever not specified in the contract. §

22:1964(8).

Person is defined to include any natural or artificial entity,

including but not limited to individuals, partnerships,

associations, trusts, or corporations. § 22:1962(D).

insurer in an amount which fairly represents the saving in

collection expense.

• Readjustment of the rate of premium for a group insurance

policy based on the loss or expense.

• Agents accepting on their own responsibility, notes for the

first premiums. § 22:1964(8.1).

instruction

• The giving of tickets to sporting, cultural, or other charitable

events

• The making or giving of charitable donations (including pro

bono services)

Advisory Letter 2015-01.

Services Offered to Insureds: Additionally, any person

engaged in the business of insurance may offer certain services

to insureds without charge and that do not constitute rebating if

the services fall within the scope of services that an insurance

producer may lawfully provide in connection with insurance

when the services are incidental to the policy of insurance and

are offered to all insureds. Services that are incidental to and

closely related to the administration of an insured’s policy

include (but are not limited to):

• Risk assessments

• Insurance consulting services (such as examining,

appraising, reviewing, or evaluating the insurance provided)

• Insurance-related regulatory and legislative updates

• Claims for preparation (but excluding claims adjustment)

• Tax preparation on behalf of an employer of Schedule A

• Information to group policy or contract holders and

members under group insurance policies

• Certain services performed pursuant to COBRA

• Certain services provided in accordance with HIPAA

• The negotiation on behalf of insureds by health issuers with

non-participating providers in an effort to reduce or

otherwise ameliorate billed charged by non-participating

providers (“balance billing”)

Advisory Letter 2015-01.

Conversely, services that are not truly incidental to the contract

of insurance when offered only to insureds may constitute

rebating if the costs of those services are not passed on to the

insured or are not specified in the contract of insurance. Such

services include (but are not limited to):

• COBRA administration that goes beyond billing and

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collecting the insurance premiums

• Payroll processing and/or services

• Development of employee handbooks and training materials

unrelated to the insurance

• Human resource software or any services related to

employee compensation, discipline, job functionality,

employee leave, organizational development, business

policies or practices, safety, staffing, and recruiting that is

unrelated to the insurance

• Risk management or loss control services that are not

routinely available to all agency clients

• Advice regarding compliance with federal and state laws

concerning human resource issues that are not related to

insurance

• Legal services

Advisory Letter 2015-01.

Services Offered to the General Public: The Department of

Insurance provides that where the thing of value is available to

the general public, the recipient of the thing of value has

received no special favor or advantage through the contract of

insurance. To determine whether a thing of value has been

offered to the general public, the Department of Insurance will

consider the circumstances surrounding the offer, including (but

not limited to) the following factors:

• Whether the offering of the thing of value is open and

obvious to the general public.

• Whether the offering is directed primarily to insureds or

prospective insureds.

• Whether a member of the general public is able to obtain the

thing of value on equal terms through the same means as

insureds or prospective insureds.

• Whether any impediment to access the thing of value exists

that is imposed on the general public and not equally

imposed on an insured or prospective insured.

Advisory Letter 2015-01.

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Maine

An insurer, an employee of an insurer or a producer may offer to

give gifts in connection with marketing for the sale or retention

of contracts of insurance, as long as the cost does not exceed

$100 per year per person, and conduct raffles or drawings, as

long as there is no participation cost to entrants and as long as

the prizes are not valued in excess of $500.

An insurer, an employee of an insurer or a producer may offer to

provide a value-added service or activity, offered or provided

without fee or at a reduced fee, that is related to the coverage

provided by an insurance contract if the provision of the value-

added service or activity does not violate any other applicable

statute or rule and is:

• Clearly identified and included within the insurance contract;

• Directly related to the servicing of the insurance contract or

offered or undertaken to provide risk control for the benefit

of a client.

§ 2163-A (as amended by the passage of SP 382).

The new law does not permit gifts and prizes given pursuant to

the statute to be in the form of cash.

This does not prohibit:

• Life insurers from paying bonuses to policyholders.

• For policies issued on the industrial debit plan, making

allowance to policyholders who have continuously for a

specified period made premium payments directly to an

office of the insurer in an amount that fairly represents the

savings in collection expense.

• Readjustment of the rate of premium for a group insurance

policy based on loss or expense.

• Reduction of premium rate for policies of a large amount,

but not exceeding savings in issuance and administration

expenses reasonably attributable to such policies as

compared with policies of similar plans issued in smaller

amounts.

• Reduction in premium rates for life or health insurance

policies or annuity contracts on salary savings, payroll

deduction, preauthorized check, bank draft, or similar plans

in amounts reasonably commensurate with the savings made

by the use of such plans.

• The issuance of policies of group insurance with or without

annuities at rates less than the usual rate of premiums for

individual policies or contracts as otherwise provided by

law.

• Allowance to an agent or broker, and receipt thereby, of

commissions with respect to insurance written on himself. §

2161.

• An insurance producer from receiving a fee rather than a

commission on the sale of property and casualty insurance.

§ 2163-A.

• A person from offering or providing services, whether or

not the services are directly related to an insurance contract,

for free or for less than fair market value as long as the

receipt of the services is not contingent upon the purchase of

insurance and the services are offered on the same terms to

Broadly, the Maine Department of Professional and Financial

Regulation Bureau of Insurance has found that whether a given

arrangement violates Maine’s rebating statutes is fact-specific

and will depend upon the circumstances of the interaction

between the parties. Some of the factors that the Bureau will

evaluate in determining whether an arrangement violates the

general prohibition on rebating will be the timing of the alleged

inducement, the prior relationship between the parties, the type

of benefit, and the recipient of the benefit. Bulletin 426.

Gifts and Prizes: A producer may offer gifts valued up to $100

per year per person in connection with the marketing of

insurance, and conduct raffles or drawings with prizes valued at

no more than $500, so long as there is no participation costs to

entrants.

These gifts may not be in the form of cash; however, cash

equivalents (e.g., pre-paid MasterCard or VISA gift card) are no

longer prohibited. For group coverage, the $100 limit applies on

a per-applicant-or-policyholder basis; i.e., $100 per group, not

$100 per covered life. Bulletin 426.

Value-Added Services: Value-added services or discounts that

can be valued at $100 or less per policy per year are clearly

acceptable under Maine law. If the services are worth more than

$100, however, the limitation will depend on whether the value-

added service is offered selectively or to all existing customers

or potential customers.

If services valued in excess of $100 are offered to specific

customers, the services must be either included within the

insurance policy or “directly related to the firm’s servicing of

the insurance contract or offered or undertaken to provide risk

control for the benefit of a client.”

In evaluating whether a value-added service is directly related to

the servicing of the insurance contract, licensees should look at

the type of insurance involved and the nature of the services to

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all potential insurance customers. § 2163-A.

o A person that offers or provides services for free or for

less than fair market value shall disclose conspicuously

in writing to the recipient before the purchase of

insurance, receipt of a quote for insurance or

designation of an agent of record that receipt of the

services is not contingent on the purchase of insurance.

Gifts and prizes, however, may not be in the form of cash, check

or other cash equivalent. § 2163-A.

be offered. The following is a non-exclusive list of situations

that are not considered rebates:

• Risk management assistance provided by the producer.

• Regulatory/legislative updates.

• Enhancements that operate to make the producer’s own

services and office operations more efficient and

convenient for the insured.

• System improvements.

• Services provided for COBRA or HIPAA administration

for group health customers.

• Administration of employer-sponsored Section 125 plans,

FSAs, and HRAs for group health insurance customers.

Bulletin 426.

Any reduction in, or offer to reduce, the cost of any type of

property/casualty insurance by reducing the commission to an

agent or broker, not supported by a filing, is considered rebating

and in violation of Maine law. Bulletin 233.

Negotiated commission sharing is allowed if the insurer has an

approved filing with the Superintendent specifically authorizing

the agent to select or reduce the commission and reflecting the

commission reduction in the premium to the insured. Bulletin

233.

Rate credits resulting from negotiated commissions are limited

to 10% of the premium. Bulletin 233.

Maryland

Except as otherwise expressly provided by law, a person,

including a health maintenance organization, may not

knowingly: allow, make, or offer to make a contract of life

insurance or health insurance or an annuity contract or an

agreement as to the contract other than as plainly expressed in

the contract; pay, allow, give, or offer to pay, allow, or give

directly or indirectly as an inducement to the insurance or

annuity: a rebate of premiums payable on the contract; a special

favor or advantage in the dividends or other benefits under the

contract; paid employment or a contract for services of any

kind; or any valuable consideration or other inducement not

The state affirmatively prohibits a person from making receipt

of any educational materials, promotional materials, or articles

of merchandise contingent on the sale or purchase of insurance.

§§ 27-209(B), 27-212(d)(2).

The statute does not prohibit:

• Life insurers from paying bonuses to policyholders. § 27-

210.

• For policies issued on the industrial debit, preauthorized

check, bank draft, or similar plans, making allowance to

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specified in the contract; directly or indirectly give, sell,

purchase, offer or agree to give, sell, or purchase, or allow as

inducement to the insurance or annuity or in connection with the

insurance or annuity, regardless of whether specified in the

policy or contract, an agreement that promises returns and

profits, or stocks, bonds, or other securities, or a present or

contingent interest in or measured by stocks, bonds, or other

securities, of an insurer or other corporation, association, or

partnership, or dividends or profits accrued or to accrue on

stocks, bonds, or other securities; or offer, promise, or give any

valuable consideration not specified in the contract, except for

educational materials, promotional materials, or articles of

merchandise that cost no more than $50. § 27-209(a). Effective

October 1, 2018 (until then monetary limit is $25).

Except to the extent provided for in an applicable filing with the

Commissioner as provided by law, an insurer, employee or

representative of an insurer or insurance producer may not pay,

allow, give, or offer to pay, allow, or give directly or indirectly

as an inducement to insurance or after insurance has become

effective: a rebate, discount, abatement, credit, or reduction of

the premium stated in the policy; a special favor or advantage in

the dividends or other benefits to accrue on the policy; or any

valuable consideration or other inducement not specified in the

policy. § 27-212(a).

Except as otherwise provided by law, a person may not

knowingly offer, promise, or give any valuable consideration

not specified in the policy, except for educational materials,

promotional materials, or articles of merchandise that cost no

more than $50. § 27-212(d)(1). Effective October 1, 2018 (until

then monetary limit is $25).

Person is defined to include an individual, receiver, trustee,

guardian, personal representative, fiduciary, representative of

any kind, partnership, firm, association, corporation, or other

entity. § 1-101(dd).

policyholders who have continuously for a specified period

made premium payments directly to an office of the insurer

in an amount that fairly represents the savings in collection

expense. § 27-210.

• Readjustment of the rate of premium for a group insurance

policy based on loss or expense. § 27-210.

• Reduction of premium rate for policies of a large amount,

but not exceeding savings in issuance and administration

expenses reasonably attributable to such policies as

compared with policies of similar plans issued in smaller

amounts. § 27-210.

• Issuance of policies of life or health insurance on a salary

savings or payroll deduction plan at a reduced rate

reasonably commensurate with the savings made by the use

of such plans. § 27-210.

• Issuance of policies of health insurance that provide for

increases in benefits to policyholders who maintain their

policies continuously in force without lapse for specified

periods. § 27-210.

• Participation in bona fide wellness programs. § 27-210.

• Payment of commissions or other compensation to licensed

insurance producers. § 27-212(f).

• Any insurer from allowing or returning to its participating

policyholders the usual and ordinary dividends, savings, or

unabsorbed premium deposits. § 27-212(f).

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Massachusetts

No person shall engage in this commonwealth in any trade

practice which is . . . determined . . . to be an unfair method of

competition or an unfair or deceptive act or practice in the

business of insurance. Ch. 176D § 2.

Such unfair methods of competition and unfair or deceptive acts

or practices in the business of insurance include: Except as

otherwise expressly provided by law, knowingly permitting or

offering to make or making any insurance contract, including

but not limited to a contract for life insurance, life annuity or

accident and health insurance, or agreement as to such contract

other than as plainly expressed in the insurance contract issued

thereon, or paying or allowing, or giving or offering to pay,

allow, or give, directly or indirectly, as inducement to such

insurance or annuity any rebate of premiums payable on the

contract, or any special favor or advantage in the dividends or

other benefits thereon, or any valuable consideration or

inducement whatever not specified in the contract; or giving, or

selling, or purchasing or offering to give, sell, or purchase as

inducement to such insurance contract, or annuity or in

connection therewith, any stocks, bonds, or other securities of

any insurance company or other corporation, association, or

partnership, or any dividends or profits accrued thereon, or

anything of value whatsoever not specified in the contract. Ch.

176D § 3(8).

Person is defined to include any individual, corporation,

association, partnership, reciprocal exchange, inter-insurer,

Lloyds insurer, fraternal benefit society, operators of any

medical service plan and hospital service plan, carriers and

health maintenance organizations, insurers and sponsors of a

legal services plan, any other legal entity or self insurer which

is engaged in the business of insurance, including agents,

brokers, and adjusters, the Massachusetts Insurers Insolvency

Fund and any joint underwriting association established

pursuant to law. Ch. 176D § 1(a).

The statute does not prohibit:

• Life insurers from paying bonuses to policyholders.

• For policies issued on the industrial debit, preauthorized

check, bank draft, or similar plans, making allowance to

policyholders who have continuously for a specified period

made premium payments directly to an office of the insurer

in an amount that fairly represents the savings in collection

expense.

• Readjustment of the rate of premium for a group insurance

policy based on loss or expense.

Ch. 176D § 3(8).

The MAIA noted in a newsletter that the Division of Insurance

provided that referral payments made by an insurance producer

to another person for referring potential customers to the

producer may be paid if the fees are:

• Nominal in value;

• Paid to anyone who refers potential clients;

• Paid whether or not a sale of insurance results from the

referral;

• Not calculated as a percentage of the premium or

commission. August 2012 Newsletter.

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Michigan

A person shall not engage in a trade practice that is defined . . .

to be an unfair method of competition or an unfair or deceptive

act or practice in the business of insurance. § 500.2003(1).