Most states expressly prohibit the use of rebates and gifts as an inducement to purchase insurance.
However, some states have provided guidance regarding limitations on gifts to prospects for marketing purposes.
Note to Producers
State
Statutory Authority
Amount
Explanation
Alabama
Alabama Code 27-12-12
Alabama Admin Code 482-1-088-.04
Alabama Admin Code 482-1-088-.05
$15
Free gifts or benefits not exceeding $15 in value for the purpose of inviting an inquiry or quote from the public; cannot be cash.
Alaska
Alaska Stat 21.36.100
$0
Rebates, valuable consideration and inducements are expressly prohibited.
Arizona
Arizona Rev Stat Ann 20-452 (4)
$25
Prizes, goods, wares, merchandise or tangible property of an aggregate value not exceeding $25
Arkansas
Arkansas Code Ann 23-66-206 (10)
Arkansas Directive 2A-2011
$25
Token gifts of $25 or less in value (wholesale), such as ballpoint pens, calendars, notebooks and other items for advertisement
California
N/A
N/A
No applicable laws or regulations regarding gifting, rebating or inducements
Colorado
Colorado Rev Stat Ann 10-3-1104 (1)(g)
$0
Inducements and rebates are expressly probibited.
Connecticut
Connecticut Gen Stat Ann 38a-825
Connecticut Bulletin S-12
$0
Inducements and rebates are expressly probibited.
Delaware
Delaware Code Ann 18-2304 (8)
$0
Inducements and rebates are expressly probibited.
District of Columbia
DC Code Ann 31-2231.12 (f)
$10
Valuable considerations costing less than $10, including educational materials, promotional materials or articles of merchandise
Florida
Florida Stat Ann 626.9541 (1)(m)
$25
Articles of merchandise of $25 or less in value, such as calendars, golf balls, coffe mugs, pens, shirts, etc. for advertisement; gifts cannot be used to induce someone to
provide detailed financial or other personal information; gift cards are prohibited. Charitable contributions on behalf of the client are considered an unlawful
inducement.
Georgia
Georgia Code Ann 33-6-4 (b)(8)(B)
$0
Inducements and rebates are expressly probibited.
Hawaii
Hawaii Rev Stat Ann 431:13-103 (a)(8)
$0
Inducements and rebates are expressly probibited.
Idaho
Idaho Code 41-1314 (3)
ID Bulletin 2009-14
ID Bulletin 2011-3
$200/calendar
year
Prizes, goods, wares, merchandise, articles or property with an aggregate value not exceeding $200 per calendar year. Applies only to goods, not services.
Illinois
215 ILCS 5/151
215 ILCS 5/424
IL Bulletin 2012-11
Minimal
Gifts of minimal value, such as pens, pencils, calendars or golf balls.
Meals, sporting events or other non-insurance related activities to engage clients in social settings are allowed. Sponsorship of events and educational seminars open to
the public are not considered rebates. Contests or raffles are acceptable as long as they are open to the public and there is no obligation to purchase or renew insurance.
Earned commissions may be donated to charities.
Indiana
Indiana Code Ann 27-4-1-4 (a)(8)
IN Bulletin 177
$25
Small items with a fair market value of $25 or less, such as a promotional handout, advertising product or meal.
Free contests and/or raffles are permissible if they are open to the public and no purchase or renewal of insurance is required to win; contest and/or raffle prizes are not
limited to $25, but the value divided by the reasonably expected number of entrants cannot exceed $25 per person.
Iowa
Iowa Code Ann 507B.4 (8)
IA Bulletin 2008-15
IA Bulletin 2008-16
Minimal
Items of minimal value such as pens, pencils, calendars, atlases or golf balls for branding and/or marketing purposes.
Meals, sporting events or other non-insurance related activities with existing clients; marketing of a brand or logo on merchandise provided to the general public; services
provided in connection with an insurance policy such as newsletters or value-added services if they are related to the type of insurance purchased; educational seminars
open to the general public as long as no actual selling takes place at the event.
Kansas
Kansas Stat 40-2404 (8)
$0
Inducements and rebates are expressly probibited.
Kentucky
Kentucky Rev Stat Ann 304.12-110
KY Advisory Opinion 2003-01
KY Advisory Opinion 2007-01
$25
Prizes, goods, wares, merchandise or property with an aggregate value not exceeding $25; clear distinction drawn between value and "cost" of items given.
Louisiana
Louisiana Rev Stat Ann 22-1964 (8)
$0
Inducements and rebates are expressly probibited.
Maine
Maine Rev Stat Annotated Title 24-a, 2163
ME Insurance Bulletin 207
ME Insurance Bulletin 384
$20
Excluding cash, check or cash equivalent, a gift not exceeding $20 per year per policy or quote may be used for marketing the sale or retention of contracts. Raffles and
drawings are permissible as long as there is no cost to participate and the prizes are valued at $100 or less. Gift cards for a specified merchant are not considered a cash
equivalent and is permissible for use as an incentive as long as it $20 or less. Gift cards accepted by a multiple merchants are considered the equivalent of cash and are
prohibited.
Maryland
Maryland Code Ann Ins 27-209 (4)
$25
Valuable considerations costing less than $25, including educational materials, promotional materials or articles of merchandise
Massachusetts
Massachusetts Gen Laws Ann Ch 176D-3 (8)
$0
Inducements and rebates are expressly probibited.
Michigan
Michigan Comprehensive Laws Annotated section
500.2066 and 500.2024a
Rebating/Inducement Q&A
$5
No dollar limit on gifts or services offered to induce a consumer to listen to a sales pitch or obtain information which could lead to a policy quote.
Articles of merchandise with an invoice value of $5 or less to induce applicants to apply for a policy.
Minnesota
Minnesota Stat 72A.20 subdivision 10 (a)(b)
Minnesota Stat Ann 72A.08
Minnesota Stat Ann 72A.12, subdivision 4 (a)(b)
$25 annually
Promotional items or gifts not exceeding $25
Mississippi
Mississippi Code Ann 83-7-3
$0
Inducements and rebates are expressly probibited.
Missouri
Missouri Ann Stat 375.936 (9)
Missouri Ann Stat 376.500
MO Bulletin 2010-07
Minimal
Small gifts with a low fair market value unrelated to the purchase of insurance are permitted.
Montana
Montana Code Annotated section 33-18-208
Montana Advisory Memorandum, May 14, 2013
$25
Gifts, marketing materials and promotional items are not considered rebates if they are less than $25 and available to all.
Nebraska
Nebraska Revised Statutes section 44-1525 (8)
$0
Inducements and rebates are expressly probibited.
Nevada
Nevada Statutes section 686A.490 (2)
$2
Items less than $2 also accompanied by a company advertisement may be distributed.
New Hampshire
New Hampshire Statutes Annotated section 417-4
(IX)
New Hampshire Revised Statutes Annotated section
402-41 I (e)(f)
$25
Promotional items not exceeding $25 per client per year are permitted in connection with marketing and insurance contracts.Raffles are permissible given the value of the
total prize is $1,000 or less, has no cost associated and eligibility is not contingent on the purchase of an insurance policy and open to non-policyholders.
New Jersey
New Jersey Revised Statutes Annotated section 17:
29B-4 (8)
New Jersey Statutes Annotated section 17B:30-13
New Jersey Administrative Code section 11:17A-2.3
and 2.4
New Jersey Bulletin 2011-22
$25
New Jersey statutes and rules generally prohibit any person from paying or offering, directly or indirectly, as an inducement to make any contract of insurance, any rebate
of premiums or commissions or any valuable consideration or thing of value which is not specified in the insurance contract or insurer's rating system. Things of value
offered with a cost or redeemable value of not more than $25 are not prohibited.
New Mexico
New Mexico Statutes Annotated section 59A-16-15
$0
Producers are prohibited from knowingly permitting or offering to make (or making) any contract of insurance or agreement not expressly stated in the contract issued. This
rule prohibits producers from paying or allowing, giving or offering to pay, allow or give an inducement or rebate of premiums payable to any insurance contract.
New York
New York Insurance Code section 2324(a)
New York Circular Letter 2009-9
$25
Merchandise and/or periodical subscriptions that do not exceed $25 are not considered inducements or rebates.
Rebates and inducements are expressly prohibited unless the item is of nominal value and meant for advertising. Whether a service or product fits within the category of
advertising will depend on the facts of each specific situation. Therefore, an agent will always have a duty to assess whether a product or service can be properly
considered advertising based on the facts of his or her particular situation.
North Carolina
North Carolina General Statutes section 58-63-15(8)
As a general matter, the Department views the following goods to be advertising in nature, does not require the following advertising items to be referenced in the insurance
policy and does not view these advertising items to be rebating:
Minimal
(1) taking a client out for a reasonably priced business meal;
(2) calendars;
(3) small inexpensive personal items such as pens and other marketing items;
(4) inexpensive items celebrating holidays or other special events such as birthday, marriage, birth of a child or graduation; and
(5) inexpensive snacks and food in conjunction with benefit presentations.
North Dakota
North Dakota Century Code section 26.1404-03 (8)
Senate Bill No. 2140
$100
Gifts, prizes, promotional articles, logo merchandise, meals and/or entertainment activities directly or indirectly to a person in connection with marketing, promoting and/or
advertising business that do not exceed $100 per person per year are permissible. Gift cards for specific merchangdise or services such as a meal, gasoline, or care wash
are permitted but agents CANNOT give cash, a cash card, any form of currency, or any refund or discount in premium. The giving of a gift, prize, promotional article, logo
merchandise, meal, or entertainment activity MUST NOT be contingent upon obtaining a quote or a contract of insurance.
Ohio
Ohio Revised Code Annotated section 3901.21 (G)
Ohio Bulletin 2009-13
$50
Promotional or advertising items valued at $50 or less are permissible when used as an inducement to obtain a quote or general insurance information so long as it is not
tied to the purchase of a policy.
Oklahoma
36 Oklahoma Statutes Annotated section 1204 (8)
(10)
$100
Rebates are expressly prohibited. Prizes, goods, wares, merchandise or tangible property of an aggregate value in excess of $100 are prohibited as an inducement to
insurance or in connection with any insurance transaction.
Oregon
Oregon Revised Statutes section 746.045
$0
Inducements and rebates are expressly prohibited.
Pennsylvania
40 Pennsylvania Consolidated Statutes Annotated
section 1171.5 (a)(8)
$0
Inducements and rebates are expressly prohibited.
Puerto Rico
Puerto Rico Statutes Title 26 section 2710
$0
Any valuable consideration including money, prizes, goods, wares, merchandise, etc. is prohibited as an incentive to buy insurance or in connection with any insurance
transaction.
Rhode Island
Rhode Island General Laws section 27-29-4 (8)
Rhode Island Bulletin 2009-9
Minimal
Inducements and rebates expressly prohibited. However, gifts of minimal value may be offered to the general public in exchange for quotes and not contingent on the
purchase or renewal of an insurance policy
South Carolina
South Carolina Code Annotated section 38-57-130
South Carolina Code Annotated section 38-57-160
$25
An article of merchandise valued at $25 or less and accompanied by an advertisement for the insurer or agent is permissible. Refresments may be provided during a sales
presentation provided the price does not exceed $10 per person in cost.
South Dakota
South Dakota Codified Laws sections 58-33-15 and
58-33-74
South Dakota Bulletin2009-1
$25
Gifts under $25 and not tied to the purchase of an insurance product are allowed. Drawings for prizes for clients that have referred prospects are permissible as long as
there is no obligation to purchase insurance and the drawing is open to clients and non-client alike. There is no dollar limit on gifts to referrals provided it is a flat amount
and not based upon how many sales are made.
Tennessee
Tennessee Code Annotated section 56-8-104 (8)
Tennessee Bulletin, February 13, 2015
Minimal
Gifts and valuable consideration offered to potential consumers irrespective of whether they purchase a policy, such as gift offers for requesting an insurance quote, are not
considered an inducement to a policy in violation of the rebating statute.
Texas
Texas Codes Annotated Chapter 541.056
Texas Codes Annotated Chapter 541.058(7)
In connection with an offer or sale of a life insurance policy or contract, accident and health insurance policy or contract, or annuity contract, to give, provide, or allow or
offer to give, provide, or allow an item that is a promotional advertising item, educational item, or traditional courtesy commonly extended to consumers and that is valued at
$25 or less.
$25
Expressions of generosity not connected to the sale or retention of an insurance product costing $25 or less are considered a social courtesy. "A social courtesy means a
respectful act or expression of generosity that is not connected with the sale or retention of an insurance product, the fair market value of which is less than or equal to
$25."
Utah
Utah Code Annotated section 31-A-23a-402.5(7)
Utah Code Annotated section 31A-23a-402.5(11)
Utah Bulletin 2015-8
$100
The value of a gift of meal that is $100 or less, on an individual basis, is a "social courtesy not conditioned on a quote or purchase of a particular insurance product." A
conspicuous dislcosure, verbal or written, must be made to the recipient of the product noting that it is not be given contingent upon the sale or future sale of an insurance
product.
Vermont
Vermont Statutes Annotated, Title 8 section 4724 (8)
$0
Inducements and rebates are expressly prohibited.
Virginia
Virginia Code Annotated section 38.2-509
Commonwealth of Virginia State Corporation
Commission "Common Problems Found During
Agent Investigations," August 1, 2015 (Page 5)
Minimal
"Agents will commonly hand out small items to their clients such as mugs, calendars, and other related items. Such items are generally considered advertising. The
violation occurs when an agent offers to give any valuable consideration or inducement to a consumer based upon the consumer’s purchase of an insurance policy. The
Bureau often advises agents that if they are going to give away items such as gift certificates for restaurants, t-shirts, or other such items, they should make these items
available to anyone who enters their agency, whether they purchase an insurance policy or not. As long as the receipt of the item is not contingent upon the purchase of an
insurance policy, there is no violation."
Washington
Washington Statutes section 48.30.150(1)(c)
$100
Insurers and insurance producers may implement advertising or promotional programs that permit the giving of prizes, goods, wares, gift cards, gift certificates or
merchandise not exceeding $100 in value in the aggregate per person in any 12-month period. The advertising or promotional program must be offered to all insureds or
prospective insureds under similar qualifying circumstances.
West Virginia
West Virginia Code of State Rules section 114-70-3
W. VA. Code St. R. section 114-70-3
$25
Educational and/or promotional materials, or articles of merchandise that are less than $25 are excluded from definitions of "valuable considerations" and "anything of
value", regardless of whether a policy or contract is purchased.
Wisconsin
Wisconsin Statutes Annotated section 628.34 (2)
$0
Inducements and rebates are expressly prohibited.
Wyoming
Wyoming Statutes Annotated section 26-13-110
$0
Inducements and rebates are expressly prohibited.