State RegulationsMI specificDifficulty 1/5
Under M.C.L. 500.2024, "rebating" occurs when a producer:
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
M.C.L. 500.2024 of the Michigan Insurance Code defines the rebating offense as giving or returning any part of the premium, or giving anything of value not specified in the contract, as an inducement to purchase life, annuity, or accident and health insurance. Rebating creates unequal effective prices among applicants in the same class, which is why the Michigan Legislature prohibits it subject only to the narrow merchandise exception in M.C.L. 500.2024a.
Why the other options are wrong
- A) Offering a monthly payment mode is a normal premium-paying option contained in the policy's structure, not a return of premium or an outside inducement.
- B) Refunding the premium during the statutory free-look period when the applicant rejects the policy is a required consumer protection, not a rebate on a completed sale.
- D) Collecting and promptly remitting premiums is the producer's fiduciary duty under M.C.L. 500.1207, not an inducement to buy.
Memory hook
Rebate = kick something back to swing the sale; free-look refunds don't count.