Insurance Commissioners Vote to Reexamine Rebating

During the National Association of Insurance Commissioners’ (NAIC) recent Fall National Meeting in Austin, TX, the Innovation and Technology Task Force, led by Commissioner Jon Godfread (ND), voted to develop amendments to the Unfair Trade Practices Act (Model #880) to address rebating.

Commissioner Godfread noted that anti-rebating laws have existed in some form or another for almost as long as insurance policies have. Such laws were initially designed to ensure carrier solvency and level the playing field among carriers, but they were also intended to prevent carriers from using unfair trade practices, discriminating, etc. The overarching goal was to keep carriers and agents from providing a policyholder or prospective policyholder with anything of value not specifically mentioned in the policy, the provision of which could induce them to buy insurance.

However, state interpretation and application of anti-rebating laws varies, of course, and those variations prompted the Task Force to further investigate the history of Model #880.

Prompted by that investigation, last month, the Task Force presented its request to the NAIC’s Executive Committee, its parent committee, for approval of its plan to amend the existing model law, and the Executive Committee approved its request to reexamine the model’s language on rebates.

PIA National will work with the Innovation and Technology Task Force as it undertakes this effort to modernize the NAIC’s model act on unfair trade practices in the context of rebating.