State RegulationsVA specificDifficulty 1/5
Which of the following constitutes illegal rebating under Virginia insurance law?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Va. Code § 38.2-509 makes it unlawful, for life, annuity, and accident and health insurance, to give or offer anything of value not specified in the contract as an inducement to purchase. Virginia's statute contains seven enumerated exceptions — including advertising items of trivial value, valuable consideration under an employer plan, and the insurer's own securities — and no dollar-value merchandise carve-out. A promise of free repairs is a thing of value outside the contract, so it is a rebate.
Why the other options are wrong
- A) Advertising items of trivial value are one of the statute's enumerated exceptions, so a promotional calendar is not rebating.
- C) Delivering the benefits the contract specifies is performance of the policy, not the giving of anything outside it.
- D) Valuable consideration under an employer plan is expressly excepted by Va. Code § 38.2-509.
Memory hook
If it is not in the contract, it is a rebate — Virginia has no gift-shop exception.