State RegulationsCO specificDifficulty 3/5
Which practice is PERMITTED under Colorado's anti-rebating law of C.R.S. § 10-3-1104(1)(g)?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
C.R.S. § 10-3-1104(1)(g) permits dividends and adjustments that operate under the contract itself, such as dividends from nonparticipating surplus, retrospective group-rate adjustments, and industrial-plan expense allowances, along with HIV testing conducted under C.R.S. § 10-3-1104.5. These benefits arise from the policy's own terms and apply alike to similarly situated policyholders, unlike personal inducements paid outside the contract.
Why the other options are wrong
- A) Returning premium as a personal bonus is the textbook rebate the section prohibits.
- B) Deadline-linked gifts are valuable consideration not specified in the contract, which is prohibited.
- D) Waiving a deductible for a favored client gives an advantage outside the contract and is rebating.
Memory hook
If the policy itself pays it, fine; if the producer's pocket pays it, rebate.