Iowa Overhauls Anti-Rebate Rule

Ann Weber, vice president and regional manager for the Property Casualty Insurers Association of America, said PCI is still studying the new policy but finds it “definitely more reasonable.”

By contrast, the original policy “would have really prohibited everything that wasn’t spelled out in the [insurance] policy,” she said.

This would have included, for example, calendars, pens, smoke detectors, driver safety CDs to new drivers in the household, maps, documents providing tips for winterizing a home and boating safety tips, “problems that are really big in the Midwest,” Weber said.

Earlier, the Council of Insurance Agents and Brokers sent a comment letter to the agency urging development of clear, flexible standards based on a recently enacted law in New Hampshire that generally prohibits rebating but does permit producers to offer 5 types of services free of charge: risk assessments, risk control tools, claims assistance, legislative updates and administration consulting.

“These standards would permit the offer of value-added services that consumers have come to expect while providing producers with the ability to adapt as the marketplace changes in the future,” a CIAB official said in the letter.

The CIAB cautions its own members that the state bulletin also expressed concern about an apparent trend whereby insurers are including “items other than insurance” in their policy filings. The department expressed concern that this is an attempt to get around rebating laws, CIAB noted.

Nicole Allen, the CIAB’s vice president, industry affairs, pointed out that Texas is dealing with the same issue over sales of some health insurance policies.

She notes that Texas issued a bulletin in January about agents providing administrative services, such as for COBRA, flexible spending accounts and other human resources assistance, in conjunction with the sale of health insurance. Such “inducements” are prohibited unless included in the insurance contract, Texas reminded agents.