State RegulationsNC specificDifficulty 2/5
To close a sale, a producer offers to rebate part of the commission to the applicant and pay the applicant's first premium. Which statement reflects North Carolina law?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
G.S. 58-33-85(a) bars any insurer or producer from offering or giving a rebate, premium reduction, or valuable consideration not specified in the policy as an inducement to purchase, and G.S. 58-33-85(b) provides that an insured may not knowingly accept one. The exceptions are narrow: producer compensation, participating-insurer dividends and unearned premiums, and trade practices permitted under G.S. 58-63-15(8)b.
Why the other options are wrong
- B) G.S. 58-33-85(b) makes knowing acceptance by the insured itself unlawful, so the applicant is not free of consequence.
- C) Disclosure to the Commissioner does not legalize rebating; only the statutory exceptions in G.S. 58-33-85(a) permit value outside the policy.
- D) No 30-day window exists; rebating is prohibited at all times under G.S. 58-33-85(a).
Memory hook
Rebating fails both ways — offering and knowingly taking are both banned.