State RegulationsIL specificDifficulty 3/5
Before any application is signed, a producer offers an applicant an expensive gift to induce her to buy a policy. The gift is not mentioned in the policy and no premium has been paid. How should this be analyzed under Illinois law?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
215 ILCS 5/152 reaches the offer stage: paying or allowing as an inducement anything of value not specified in the policy is unlawful on its own terms. The prohibition is not deferred until issuance, and 215 ILCS 5/153 is the separate provision on accepting rebates rather than the measure of this violation.
Why the other options are wrong
- B) The inducement ban of 215 ILCS 5/152 applies before the sale; waiting for issuance and premium is not a safe harbor.
- C) Inducing insurance with value not specified in the policy is a regulated unfair practice, not a private matter, under the Illinois Insurance Code.
- D) The violation is complete at the offer under 215 ILCS 5/152; the applicant's purchase and the accepting-rebate rule of 215 ILCS 5/153 are not elements of it.
Memory hook
The gift breaks the rule when it is offered, not when it is paid.