New Jersey Personal Lines Practice Test 2026 - Free Personal Lines Practice Questions and Study Guide

Rebating in the context of insurance sales refers to the practice of offering illegal inducements to clients that are not specified in the insurance policy itself. This can take the form of cash, gifts, or other benefits that are meant to incentivize a purchase but are not explicitly part of the terms outlined in the policy. Such practices are prohibited in many jurisdictions, including New Jersey, as they can lead to unfair competition and undermine the integrity of the insurance market.

The other options do not align with the definition of rebating. Providing legal discounts on premiums is a standard practice that is typically approved and regulated, as is showing appreciation for client loyalty through existing lawful incentives. Likewise, adjustments to employee commissions pertain to internal business practices that do not relate to the inducement of clients in sales transactions.