California Insurance Code & EthicsQuestion 49 of 315
Which of the following describes rebating?
a.Reducing premium by applying earned policy dividends
b.Offering a group discount lawfully filed in the rate plan
c.Sharing commission with a co-licensed agent of record
d.Returning part of the agent's commission to the applicant as an inducement to buy
Explanation
Rebating is offering any valuable consideration outside the policy as an inducement to buy. California now permits limited, non-discriminatory rebates if disclosed and offered uniformly, but the textbook definition tested here is the unlawful inducement form.
Law Reference: Cal. Ins. Code §750Practice all 315 questions free — no signup required.
Related questions on this topic
- An agent tells a prospect that a competing insurer is on the verge of financial collapse in order to convince the prospect to buy from her own company. The competitor is in fact solvent. Under the Unfair Practices Act, this conduct is best described as:
- Which of the following actions by an insurer would constitute an unfair claims settlement practice under California law?
- An agent convinces a policyholder to surrender an existing whole life policy and buy a new one, primarily to earn a fresh first-year commission, even though the change disadvantages the client. This practice is known as:
- Under California law, before transacting any insurance business in the state, a person must:
- Generally, how many hours of continuing education must a resident life-only or accident & health agent complete during each two-year license period after the first renewal?
- A newly licensed California life-only agent must complete how many hours of CE during the first two years of licensure?
Last reviewed: · editorial process
PrepPass Editorial Team · Verified against California Life & Health Insurance License Exam · How we review