Which of the following is an example of a producer being involved in an unfair trade practice of rebating?

• A. The Insurance Guaranty Corporation
• B. The Federal Trade Commission
• C. The Maryland Department of Insurance
• D. The National Association of Insurance Commissioners

Answer: (A)

Rebating is when a producer gives something of value to a prospective buyer to induce the purchase of insurance, which is prohibited as an unfair trade practice. In Maryland, the regulation and enforcement of such practices fall to the state’s Department of Insurance. They oversee licensees, enforce the rules against rebates, and can discipline agents who offer improper incentives. The Insurance Guaranty Corporation isn’t involved in regulating or policing rebating; it protects policyholders when an insurer fails. The Federal Trade Commission handles broad consumer protection and antitrust matters, not the specific regulatory enforcement of insurance rebate practices. The NAIC helps coordinate state regulators, but it does not directly enforce these rules. So the entity best positioned to address a producer’s rebating activity is the Maryland Department of Insurance.