A producer offers to return part of her commission to a prospective client if he buys a policy from her. Under New Jersey's trade practice standards, what is this called?

Why B is correct

Rebating is offering something of value — a premium rebate, a commission kickback, or another inducement not specified in the policy itself — to persuade a applicant to buy insurance. New Jersey treats rebating as an unfair trade practice, and the New Jersey Department of Banking and Insurance can discipline producers who engage in it. The policy rationale is equal treatment: all applicants for the same coverage should compete on the filed rate, not on side payments from the producer's pocket.

Why the other options are wrong

• A) Twisting is inducing the replacement of an existing policy through misrepresentation; nothing here involves replacing a policy.
• C) Defamation means making false statements that injure a competitor; no competitor is mentioned or harmed here.
• D) Coercion involves forcing a borrower or customer to accept insurance as a condition of another transaction; the offer here is a voluntary inducement, which is rebating.

Memory hook

A kickback to close the sale is a rebate — the filed rate is the only price.