§ 26.1-25-16 — Rebates prohibited - Exception

1. An insurance producer may not knowingly charge, demand, or receive a premium for
any insurance policy except in accordance with this chapter. No insurer or employee of
an insurer, and no insurance producer, broker or agent may pay, allow, or give, or offer
to pay, allow, or give, directly or indirectly, as an inducement to insurance, or after
insurance has been effected, any rebate, discount, abatement, credit, or reduction of
the premium named in an insurance policy, or any special favor or advantage in the
dividends or other benefits to accrue on the policy, or any valuable consideration or
inducement whatever, not specified in the insurance policy, except to the extent
provided for in applicable filing. No insured named in an insurance policy, nor any
employee of the insured, may knowingly receive or accept, directly or indirectly, any
such rebate, discount, abatement, credit, or reduction of premium, or any such special
favor or advantage or valuable consideration or inducement. This section does not
prohibit the payment of commissions or other compensation to licensed insurance
producers, nor any insurer from allowing or returning to its participating policyholders,
members, or subscribers dividends, savings, or unabsorbed premium deposits. As
used in this section, "insurance" includes suretyship and "policy" includes bond and
federal crop insurance.
2. Notwithstanding any other provision in this section, if the cost does not exceed an
aggregate retail value of one hundred dollars per person per year, an insurance

producer may give a gift, prize, promotional article, logo merchandise, meal, or
entertainment activity directly or indirectly to a person in connection with marketing,
promoting, or advertising the business. As used in this subsection, "person" means the
named insured, policy owner, or prospective client or the spouse of any of these
individuals, but the term does not include a certificate holder, child, or employee of the
named insured, policy owner, or prospective client. Subject to the limits of this
subsection, an insurance producer may give a gift card for specific merchandise or
services such as a meal, gasoline, or car wash but may not give cash, a cash card,
any form of currency, or any refund or discount in premium. An insurance producer
may not condition the giving of a gift, prize, promotional article, logo merchandise,
meal, or entertainment activity on obtaining a quote or a contract of insurance.
Notwithstanding the limitation in this subsection, an insurance producer may conduct
raffles or drawings, if there is no financial cost to an entrant to participate, the drawing
or raffle does not obligate a participant to purchase insurance, the prizes are not
valued in excess of a reasonable amount determined by the commissioner, and the
drawing or raffle is open to the public. The raffle or drawing must be offered in a
manner that is not unfairly discriminatory and may not be contingent on the purchase,
continued purchase, or renewal of a policy. Notwithstanding the limitation in this
subsection, an insurance producer may make a donation to a nonprofit organization
that is exempt from federal taxation under Internal Revenue Code section 501(c)(3)
[26 U.S.C. 501(c)(3)] in any amount as long as the donation is not given as an
inducement to obtain a contract of insurance.
3. The provisions in this section may not be construed as including within the definition of
discrimination or rebates any of the following practices:
a. The offer or provision by an insurer or producer, by or through an employee, an
affiliate, or a third-party representative, of value-added products or services at no
or reduced cost if the products or services are not specified in the policy of
insurance if the product or service:
(1) Relates to the insurance coverage and is designed to satisfy one or more of
the following:
(a) Provide loss mitigation or loss control;
(b) Reduce claims costs or claim settlement costs;
(c) Provide education about liability risk or risk of loss to persons or
property;
(d) Monitor or assess risk, identify sources of risk, or develop strategies
for eliminating or reducing risk;
(e) Enhance health;
(f) Enhance financial wellness through items such as education of
financial planning services;
(g) Provide post-loss services;
(h) Incent behavioral changes to improve the health or reduce the risk of
death or disability of an individual defined as policyholder, potential
policyholder, certificate holder, potential certificate holder, insured,
potential insured, or applicant; or
(i) Assist in the administration of the employee or retiree benefit
insurance coverage.
(2) If offered by the insurer or producer, the insurer or producer, upon request,
shall ensure the person is provided with contact information to assist the
person with questions regarding the product or service.
(3) Is based on fair documented criteria and offered in a manner not unfairly
discriminatory. The documented criteria must be maintained by the insurer
or producer and produced at the request of the commissioner.
(4) Is reasonable in comparison to that person's premiums or insurance
coverage for the policy class.
b. If an insurer or producer does not have sufficient evidence, but has a good-faith
belief the product or service meets the criteria in subdivision a, the provision by

the insurer or producer of a product or service in a manner that is not unfairly
discriminatory as part of a pilot or testing program no longer than one year. An
insurer or producer shall notify the department of the pilot or testing program
offered to consumers in this state before launching and may proceed with the
program unless the department objects within twenty-one days of notice.
4. An insurer, producer, or representative of an insurer or producer may not offer or
provide insurance as an inducement to the purchase of another policy or otherwise
use of the words "free" or "no cost" or words of similar import in an advertisement.
5. The commissioner may adopt regulations when implementing the permitted practices
set forth in this regulation to ensure consumer protection. Consistent with applicable
law, the topics addressed by the regulations may include consumer data protections
and privacy, consumer disclosure, and unfair discrimination.