Which statements about rebating in insurance are true?

Rebating in insurance refers to the practice of offering clients some form of incentive or inducement, such as discounts or additional benefits, as part of the insurance policy purchase process. The correct response indicates that rebating is prohibited under the Insurance code.

This prohibition exists to maintain fairness in the marketplace and ensure that all consumers have equal access to insurance products based on the merits of the coverage itself, rather than being swayed by financial incentives from agents or companies. Allowing rebating could create a competitive disadvantage for agents who comply with regulations, undermining the integrity of the insurance industry.

The other statements suggest that rebating is encouraged or enhances sales performance without negative effects, which contradict the principles and regulations governing the insurance industry designed to protect both consumers and the market at large. Therefore, recognizing the prohibition of rebating under the law is crucial for understanding ethical practices within the insurance field.