What is rebating in insurance?

General Forum Discussions General Insurance Discussion
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I’m trying to fill my sales pipeline by visiting car salespeople. However, I’m finding that they often have deals with agents who give them referrals based on selling policies. Not only is it illegal to pay referral fees contingent on policy sales, but they are also offering gift cards over the $25 rebating limit. This is making it hard for me to compete. As a producer, I can’t offer higher referral fees than an agency owner, and I don’t want to break the law to get sales.

Has anyone else faced this issue? What did you do? I feel like I should report these people for rebating and anticompetitive practices since it’s hurting my business, but I’ve also been taught not to snitch. Any advice?

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Keep detailed records of any unethical practices you encounter, including dates, names, and specific instances of wrongdoing. This documentation will strengthen your case if you decide to report the behavior.

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This refers to the practice of offering money back to a policyholder as an incentive to make a sale. This can involve an insurance producer sharing a portion of their commission with the policyholder, but it’s not the only form of rebating in the industry.