Question

Which is NOT considered rebating?

A) Offering a discount to an insured
B) Providing valuable gifts to clients as an inducement to purchase insurance
C) Sharing commissions with a producer licensed in the same line of business
D) Promising a cash reward to a client for purchasing an insurance policy

Answer 1

The correct answer is B) Providing valuable gifts to clients as an inducement to purchase insurance. Rebating refers to the act of providing something of value as an incentive or inducement to purchase insurance, and is considered unethical and illegal in most jurisdictions.

Step-by-step explanation:

The correct answer is B) Providing valuable gifts to clients as an inducement to purchase insurance. Rebating refers to the act of providing something of value as an incentive or inducement to purchase insurance, and is considered unethical and illegal in most jurisdictions. Offering a discount to an insured (option A) and sharing commissions with a producer licensed in the same line of business (option C) are both common practices in the insurance industry but are not considered rebating. Promising a cash reward to a client for purchasing an insurance policy (option D) is also considered rebating and therefore not allowed.