Which Tennessee producer conduct does NOT violate the rebating prohibition of T.C.A. § 56-8-104?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
T.C.A. § 56-8-104 prohibits rebates and extra-contractual inducements, but it does not require every producer to quote the same possibly inflated figure. Quoting the insurer's actual filed rate for the applicant's genuine risk class is lawful pricing, and the resulting difference from a competitor's higher quote is simply accurate presentation, not a rebate. Tennessee has no exception permitting gifts of valuable consideration, so even modest gift cards and premium refunds tied to referrals remain rebates, per Tennessee Department of Commerce & Insurance interpretive guidance on rebating.
Why the other options are wrong
- A) A gift card given as an inducement or reward for the purchase is valuable consideration not specified in the policy; Tennessee's prohibition has no gift-value exception.
- B) A dividend enhancement the policy does not provide is a special favor or advantage in dividends, one of the express forms of rebating.
- D) Refunding premium in exchange for referrals is a rebate of premium used as an inducement, squarely within the prohibition.
Memory hook
Quoting the real filed rate is fine; gifts, dividend favors, and refunds for referrals are rebates.