State RegulationsMA specificDifficulty 1/5
Under Massachusetts law, returning part of the premium or giving anything of value not specified in the policy contract, as an inducement to purchase insurance, is the unfair practice known as:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
The conduct described is rebating. M.G.L. c. 175, § 182 prohibits returning any part of the premium or giving anything of value not specified in the contract as an inducement to purchase insurance, and M.G.L. c. 176D, § 3(8) lists rebates in the unfair-practices catalogue. The Massachusetts Division of Insurance enforces the prohibition strictly, and Massachusetts DOI Bulletin 2024-06 reaffirms that it reaches anything of value offered to win the sale. The name of the practice, not its catalogue cousins, is what the question tests.
Why the other options are wrong
- A) Defamation under M.G.L. c. 176D, § 3(3) is the malicious disparagement of a competitor's financial condition, unrelated to giving value to buyers.
- C) False advertising under M.G.L. c. 176D, § 3(2) concerns misleading statements designed to induce purchases, not the transfer of value.
- D) Coercion under M.G.L. c. 176D, § 3(4) involves forcing or restraining a party's conduct, not rewarding a purchase with value.
Memory hook
Give-backs to close the sale = rebating — premium refunds or any sweetener count.