Rebate in Insurance

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Rebate (An Unfair & Deceptive Insurance Practice!) In the insurance business, rebating is a the practice of offering payment or other things of value to a consumer to induce the sale of insurance products. An example of rebating is when the prospective insurance buyer receives a refund of all or part of the commission for the insurance sale. Rebating practice of splitting insurance commissions with the consumer to induce a sale is classified as both an unfair method of competition and an unfair or deceptive act or practice in the business of insurance. Some insurance regulatory bodies are against the practice of rebate, this is due to the fact that it does not seek a level playing field for insurance producers. Rebate gives an unfair advantage to some agents/brokers if they are in a position to offer a portion of their commissions to their prospective clients. Most insurance regulators have the authority to investigate and penalize insurance companies that allow agents or brokers to give rebates to consumers. Various civil sanctions including license revocation, non-renewal, and cease and desist orders are standard remedies. Criminal penalties are also available for unlawful rebating in some cases. Some consider rebate as an unfair deceptive practice. What is your take on this practice? #benewinsurance #insurtech #inclusiveinsurance #insurance #reinsurance #takaful

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