Minnesota Updates Anti-Rebating Laws

Minnesota Insurance Code prohibits an insurance company or producer from giving anything of value as an inducement to purchase insurance, unless the thing of value is specifically referenced in the policy itself. Knowingly giving a rebate as an inducement to purchase insurance is also an unfair trade practice in violation of Minnesota law.

Minnesota anti-rebating laws do address the giving of promotional items. Promotional items are a form of advertising, which is by definition an attempt to influence consumers to purchase insurance. Because Minnesota law prohibits producers from giving anything of value to induce a consumer to purchase insurance, it is possible that giving promotional items could be considered unlawful rebating under Minnesota law.

Minnesota’s anti-rebating laws do not prohibit an insurance company or producer from advertising products and services. Minnesota’s anti-rebating laws allow for the giving of a promotional item or items to a consumer in connection with marketing of contracts of insurance if the promotional items do not truly act as “inducements” to purchase. However, producers must comply with specific requirements when offering promotional items.

Minnesota Insurance Code sets a monetary limit on the value of gifts that insurers and insurance producers are allowed to give to their clients in connection with the solicitation or sale of insurance products. Minnesota Insurance Code allows for a rebating exception for a promotional advertising item of $25 or less or a gift of $25 or less per year provided the receipt of the item or gift is not conditioned upon purchase of an insurance policy or product.

If you have any questions, please call 1-888-435-7737; Ext. 1797 for the life and health compliance team or Ext. 1033 for the annuity compliance team.