State RegulationsTN specificDifficulty 1/5
Tennessee's prohibition on rebating under T.C.A. § 56-8-104 applies to which of the following types of insurance?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
T.C.A. § 56-8-104's prohibition on rebates of premiums and on extra-contractual favors or valuable consideration applies across life insurance, annuities, and accident and health coverage; no line of the life and health business is carved out. A producer who would never rebate a life premium commits the same unfair trade practice by offering a premium refund or dividend favor on a health or annuity sale, and the Tennessee Department of Commerce & Insurance disciplines the conduct in every one of those product lines.
Why the other options are wrong
- A) Limiting the rule to life insurance is too narrow; annuity and accident and health sales are equally covered.
- B) Omitting accident and health insurance misses a covered line; the prohibition spans the health side of the business as well.
- C) Omitting life insurance and annuities misses the products where rebating most commonly arises; the ban is not confined to health coverage.
Memory hook
The rebate ban is product-blind: life, annuity, and health all included.