State RegulationsIL specificDifficulty 2/5
To close a sale, an Illinois producer promises an applicant that he will personally pay her back a portion of the first year's premium once the policy is issued. Which unfair practice has the producer committed?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Promising to return part of the premium as an inducement to purchase is the textbook rebate prohibited by 215 ILCS 5/151. The statement is not a false description of the policy's benefits; it is value outside the policy being offered to close the sale, which places it in the rebating prohibition rather than the misrepresentation rule.
Why the other options are wrong
- A) Nothing about the policy's terms or benefits was falsely described; the promise concerns value outside the policy, governed by 215 ILCS 5/151.
- B) 215 ILCS 5/154.6 regulates the handling of claims after a loss; no claim exists in this sales scenario.
- C) Defamation under 215 ILCS 5/149 requires disparagement of a competitor, which is absent here.
Memory hook
Money back to make the sale is a rebate: 151, not 149.