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State RegulationsGA specificDifficulty 3/5

A Georgia business owner offers a producing agent a personal discount on the owner's services in exchange for the agent steering clients to the owner's company, and the agent accepts. Under Georgia law, who has committed an unfair trade practice?

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Answer & full 3-part explanation (select an option above, or peek)

Why D is correct

Under O.C.G.A. § 33-6-4(b)(8)(B), Georgia prohibits both sides of a rebate arrangement: it is unlawful to give or offer, directly or indirectly, any valuable consideration not specified in the contract as an inducement, and it is equally unlawful to receive or accept such consideration. The service discount is valuable consideration for steering business, so both the owner who offers it and the agent who accepts it commit an unfair trade practice.

Why the other options are wrong

  • A) The statute reaches receiving and accepting as well as giving and offering, so the agent is liable too.
  • B) The giving side of a prohibited inducement is also unlawful; liability is not confined to licensed producers.
  • C) The prohibition covers any valuable consideration not specified in the contract, which includes non-premium benefits such as service discounts.

Memory hook

Rebating catches both hands — the giver and the taker.

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State RegulationsGA specificDifficulty 1/5

Under Georgia's unfair trade practices law, which party is prohibited from accepting a rebate of premiums or a special favor in dividends not specified in the insurance contract?

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Answer & full 3-part explanation (select an option above, or peek)

Why C is correct

Under O.C.G.A. § 33-6-4(b)(8)(B), the rebating prohibition runs both ways: it is an unfair trade practice for a producer or insurer to give or offer a rebate of premiums or special favors in dividends or benefits, and equally an unfair trade practice for any person to receive or accept such a rebate. An insured who knowingly accepts a reduced-premium deal off the books violates Georgia law along with the producer.

Why the other options are wrong

  • A) The statute expressly reaches parties who receive or accept rebates, not only those who give or offer them.
  • B) Producers who pay rebates out of commissions are covered even though no insurer funds the payment.
  • D) There is no written-disclosure exception; rebating premiums is prohibited outright under O.C.G.A. § 33-6-4(b)(8)(B).

Memory hook

In Georgia, rebate-taking is as illegal as rebate-making.

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