State RegulationsMA specificDifficulty 2/5
A Massachusetts producer offers every applicant a $100 gift card from an affiliated non-insurance business as an inducement to buy a life policy. Under M.G.L. c. 175, § 182 and Massachusetts DOI Bulletin 2024-06, which statement is correct?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
M.G.L. c. 175, § 182 and M.G.L. c. 176D, § 3(8) impose an absolute prohibition on rebating in Massachusetts: the premium may not be rebated and nothing of value beyond the contract may be given as an inducement. Massachusetts DOI Bulletin 2024-06 reaffirms the ban on anything of value and states expressly that it extends to discounts and inducements from affiliated non-insurance entities. There is no promotional, de minimis, or disclosure-based exception in current law, so the gift card is unlawful regardless of its source or size.
Why the other options are wrong
- A) The source does not matter: Massachusetts DOI Bulletin 2024-06 states that the prohibition reaches inducements from affiliated non-insurance entities.
- B) Current Massachusetts law contains no dollar threshold or promotional exception; the ban on anything of value under M.G.L. c. 175, § 182 is unconditional.
- C) Disclosure on the application does not convert an unlawful inducement into a lawful one; M.G.L. c. 175, § 182 prohibits the transfer itself.
Memory hook
In Massachusetts a sweetener is a violation — any value, any source, zero exceptions.