All of the following are true regarding rebates EXCEPT:

A. Rebating can be anything of monetary value given as an inducement to purchase insurance.
B. Dividends are not considered to be rebates.
C. Rebates are allowed if it is in the best interest of the client.
D. Special favors and services would be considered rebating.



Answer :

Final answer:

Rebates are incentives offered to customers to encourage purchases, and dividends are not classified as rebates. Special favors and services are considered rebating, while rebates are permissible if they serve the client's best interest.


Explanation:

Rebates are incentives or discounts offered to customers to encourage purchases, and they can be of monetary value or other forms like checks sent to taxpayers for consumption.

Dividends are not considered rebates, as they are distributions of a part of a company's earnings to its shareholders, not given as inducements to buy insurance.

Special favors, services, or surreptitious payments would be considered rebating, while rebates are allowed if they benefit the client.


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