A Tennessee producer proposes to charge a client a separate fee for services related to an individual major medical policy for which the producer will receive no commission. A colleague insists the practice is simply rebating in reverse and always prohibited. What is the accurate analysis under Tennessee law?

Why D is correct

Tennessee treats fee charging and rebating as distinct subjects. T.C.A. § 56-6-125(b) specifically governs fees for individual major medical policies when commission is not paid, while rebating is a separate unfair trade practice under T.C.A. § 56-8-104 as enforced by the Tennessee Department of Commerce & Insurance. The producer's fee arrangement therefore falls under the fee statute's regulation rather than being automatically condemned as rebating, and it is not beyond regulation either.

Why the other options are wrong

• A) Charging a fee is not rebating; rebating involves giving something of value not specified in the policy as an inducement, and the fee subject is governed by its own statutory provision.
• B) Fee charging is not unregulated — T.C.A. § 56-6-125(b) specifically addresses fees on individual major medical policies when no commission is paid.
• C) The fee provision targets individual major medical policies, which is the opposite of a group-only rule.

Memory hook

Fees and rebates are different animals; the fee statute governs fees.