Naic Set To Revise Anti Rebating Laws

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Posted in: Naic rebating model lawShow details

As part of our insurtech practice, we are frequently asked to advise on state insurance anti-rebating laws. These laws prohibit insurance companies…

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Posted in: Anti rebating laws insuranceShow details

These provisions go beyond the "de minimis" exceptions now found in many state anti-rebating laws. The NAIC suggests that an appropriate limit on reasonable cost is the lesser of 5% of premium or $250.

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Posted in: Anti rebating lawsShow details

at the fall 2020 national meeting of the national association of insurance commissioners (“naic”), the innovation and technology (ex) task force (the “task force”) agreed to review and revise the naic’s unfair trade practice model law (model 880) to clarify what constitutes regulatory compliance with respect to the prohibitions on offering …

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Posted in: State insurance rebating lawsShow details

in an effort to resolve this inconsistency among the states and prompt more states to reform their anti-rebating laws, the national association of insurance commissioners’ (“naic”) innovation and technology task force began a multi-year effort in 2019 to amend the anti-rebating provisions of the naic’s model unfair trade practices act (“model …

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Posted in: Insurance Law, Form LawShow details

The amendments to the Model Law include drafting notes suggesting that states could consider adding specific thresholds for permissible exemptions from the anti-rebating restrictions, such as the lesser of 5% of current or projected policyholder premium or a set amount such as $250.

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Posted in: Air LawShow details

The National Association of Insurance Commissioners’ (NAIC) Executive Committee has adopted language that would allow for some types of “rebates” to be offered to consumers, unanimously approving amendments to Section 4 (H) (“Rebating”) of the NAIC Unfair Trade Practices Act (Model #880) (UTPA).

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Posted in: Insurance Law, Consumer LawShow details

Since the NAIC's Innovation and Technology Task Force began efforts to revise the Model Act in 2018, many states have proposed or promulgated new legislation, rules or bulletins providing insurance companies with more flexibility in offering innovative products under their respective anti-rebating statutes. However, since the rules now vary so much state to state, …

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Posted in: Insurance Law, Insurance LawShow details

Forty-eight states and the District of Columbia have enacted anti-rebate statutes, with most states enacting the NAIC Unfair Trade Practices Model Act (#880).

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Posted in: Air LawShow details

However, the policy concern underlying the enactment of anti-rebating laws in many states was and continues to be that rebating encourages insurer insolvency by effectively discounting insurance premiums. The definition of what constitutes rebating varies from state to state. However, the rebating practice of returning part of an agent's

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Posted in: Insurance Law, Insurance LawShow details

The NAIC Executive Committee unanimously adopted an amendment to the NAIC Unfair Trade Practices Model Act (Model Law #880) on December 9, 2020. This amendment will allow insurers and producers to “rebate” consumers. With the exception of California and Florida, and until most recently, states have enforced strict anti-rebating laws, considering non …

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Posted in: Consumer Law, Air LawShow details

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In response to industry requests to reform the anti-rebating laws, the Innovation and Technology Task Force adopted a motion at the NAIC’s 2019 Summer Meeting in New York to begin the process of

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Posted in: Form Law, Industry LawShow details

The anti-rebating statutes are constitutional. 1996 Attorney General Letter. The Alaska Division of Insurance has determined that the following are violations of the rebating laws: • Negotiating commission with clients outside of a broker agreement. • A gift, service, or anything of value used as an inducement

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Posted in: Insurance Law, Constitutional LawShow details

These anti-rebating laws are nearly identical across the country and are based on model language from the NAIC. These state rebating prohibitions have been on the books for decades and originally were conceived as a life insurer solvency protection mechanism. These rules have become particularly problematic for Council members, and reform or

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Posted in: Form LawShow details

• The NAIC’s Unfair Trade Practices Act(#880) created a measure of uniformity in the handling of anti-rebating issues across states. • Many states allow exceptions to anti-rebating rules. The most common types of exceptions are for promotion items, referrals, raffles, charity donations and value- added services.

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Posted in: Form Law, Services LawShow details

New anti-rebating language will permit insurers or producers to "offer or give non-cash gifts, items, or services, including meals to or charitable donations on …

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Posted in: Insurance Law, Services LawShow details

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Frequently Asked Questions

What is the naic doing about the anti rebating issue?

The NAIC’s Innovation and Technology Task Force has worked on the anti-rebating issue since 2018. During that time, several states, from New Hampshire to Arizona, either proposed or adopted new legislation, rules, or bulletins addressing their states’ anti-rebating prohibition.

How many states have anti rebating laws?

Anti-Rebating Laws and Regulations Anti-Rebating Laws and Regulations  Forty-eight states and the District of Columbia have enacted anti-rebate statutes, with most states enacting the NAIC Unfair Trade Practices Model Act (#880).

Will the naics model unfair trade practices act be amended?

In response to industry requests to reform the anti-rebating laws, the Innovation and Technology Task Force adopted a motion at the NAIC’s 2019 Summer Meeting in New York to begin the process of amending the NAIC’s Model Unfair Trade Practices Act to revise the Act’s anti-rebating provisions.

What is the minimum amount of rebating allowed on insurance policies?

Amendment drafters suggested that "the lesser of 5% of the current or projected policyholder premium or $250 would be an appropriate limit." The NAIC’s Innovation and Technology Task Force has worked on the anti-rebating issue since 2018.

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