Why Regulators Should Dump Anti-Rebating Laws

By | September 18, 2017

  • November 7, 2018 at 2:29 pm
    Jax Agent says:
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    I think scrapping anti-rebating laws is a terrible idea. Not everyone that buys insurance is the owner of the company or business. As slimy as some agents/brokers are with anti-rebating laws in place, I can only imagine what the marketplace might look like with ‘payola’ becoming part of the equation.
    Is it not enough that agents/brokers are ethically bound to deliver the best insurance product they can to their clients ?
    Sorry, but there are good reasons that these regulations are in place.

  • June 3, 2019 at 1:21 pm
    Martin says:
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    I agree with most of what he has to say except for banks.. Banks Have a way in which they have reduced some of my clients interest rate to get their Business owners policy.. It is hard to prove but it does happen. You get a loan for your business and if that bank writes insurance they have lowered your interest to get that packaged business owners policies.

  • August 12, 2020 at 11:44 pm
    okt0ber says:
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    This is a terrible idea. It works in California because they have such strong rate regulation. Illinois has no rate regulation, so I can just see how this could lead to “Oh, you want to cancel, but wait, we’ll randomly lower your rate by X if you stay”… No thanks. As far as commercial P&C, this would disproportionately favor big brokers over mainstreet agents who may not have the means to entice a customer with a big rebate.

  • December 2, 2022 at 10:03 am
    John Dough says:
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    Yeah, no thanks, Mr. Attorney.

    Rebating laws were established because of the bad behavior of some (many?) of the players in the game. The laws weren’t conceived out of the blue by overzealous bureaucrats drunk on regulatory overreach.

    • July 15, 2023 at 7:24 pm
      Kerwin Tschetter says:
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      regulatory overreach ???

      Do you mean like:

      “These price wars occurred after California deregulated its
      insurance market in 1995.”

      Alaska State Legislature (akleg.gov)

      http://www.akleg.gov/basis/Journal/Pages/23?Chamber=H&Bill=HB%20403&Page=02415#2415

      “Dear Speaker Kott: [Who was later convicted for taking bribes from the VECO Corporation.]

      Under the authority of article III, section 18, of the Alaska
      Constitution, I am transmitting a bill aimed at a crisis in the Alaska
      Workers’ Compensation insurance industry. Resolving this issue is
      vitally important to Alaska’s employers and employees. Specifically,
      this bill deals with the after-effects of Fremont Insurance Company’s
      insolvency (Fremont). Fremont was a California based workers
      compensation insurer. It was writing about 27 percent of the workers’
      compensation insurance policies in Alaska by the year 2000.

      Fremont was heavily involved in California’s workers’ compensation
      price wars.

      These price wars occurred after California deregulated its
      insurance market in 1995.

      Insurers like Fremont cut prices and
      scrambled for market share. The result was that 41 workers’
      compensation carriers in California went insolvent or quit doing
      business in the state to avoid insolvency. Fremont joined the group of

      2004-01-28 House Journal Page 2416
      failed insurers when it was declared insolvent in July, 2003. Fremont
      left Alaska employers and employees “holding the bag” with liability
      for claims worth approximately $60 million.



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