Rebating/Inducement

Yes, so long as receipt of the gift or service is not contingent upon purchase of a policy.

No.

Generally, no. However, the rebating laws allow giving something of value where it is specified in the insurance contract. Also, a producer quoting life insurance may give an applicant an article of merchandise having an invoice value of $5.00 or less, and a producer may give an applicant or an insured under a property-casualty insurance policy an article of merchandise having an invoice value of $50.00 or less.

A producer may only offer entry into a drawing if the gift (prize) offered has a value of $5.00 or less for life insurance applicants, or $50.00 or less for property-casualty insurance applicants.

No, the statute does not allow an agent to return any part of the premium owed as it would be considered an illegal inducement for the purchase of insurance.

It depends on the business model.  The law allows an insurance producer to pay or assign commissions to a third party unless the payment violates Section 2024.  The following may assist you when developing a business model:

A producer may donate money to a charitable organization as long as:

1. The donation is offered uniformly to all applicants for insurance and not only for specific transactions.
2. The individual insured does not have any control over which charitable organization receives the donation.
3. The charitable organization does not provide any consideration in exchange for the donation.
4. The charitable organization does not engage in any activity that would constitute selling, soliciting, or negotiating insurance in violation of the Code.
5. The charitable organization is not an affiliate of the insured such that a donation to it would result in a direct or indirect benefit to the insured.
6. The charitable organization is not a client of the producer.

We strongly recommend that you consult with your attorney when considering a charitable or community donation program to determine compliance with the law.  Any program should be reviewed in accordance with sections 1240, 2024, 2066, 2070, 2024a, 2024b and 1207(3) of the Insurance Code.

No.

No.