State RegulationsIL specificDifficulty 1/5
Under 215 ILCS 5/151, which of the following best describes an unlawful rebate in Illinois?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
215 ILCS 5/151 prohibits rebating: giving or returning any part of the premium, or any thing of value not specified in the policy, as an inducement for insurance. Standard premiums under the filed rating plan, contract commissions to licensed producers, and statutory benefit adjustments are all ordinary insurance practices outside the statute's reach.
Why the other options are wrong
- B) Charging the policy premium for the underwritten class is ordinary rating, not an inducement outside the policy within 215 ILCS 5/151.
- C) Commissions paid to licensed producers under an agency contract are lawful compensation, not rebates.
- D) Adjusting a benefit for misstated age is a standard policy-correction mechanism and has nothing to do with inducing the sale.
Memory hook
A rebate is value off the books: anything not printed in the policy that buys the sale.