Rebating, Incentives, and Insurance Leads

[MikeLevy]

As agents we (I was and still am licensed) know that rebating is illegal. MyPoints is offering 5,000 points for anyone who changes an auto or home policy through NetQuote (I don't know what the offer is for Life and Health, if any.) I am wondering whether the agent who receives the lead and sells the policy is providing a rebate, since the applicant is getting "points" that are valued at as much $50.00. If so, what is the penalty and who is ultimately responsible. Any thoughts?

 

[moonlightandmargaritas]

Rebating is illegal only in some states, perfectly legal in others.

 

[The New Guy]

They don't purchase the product from Netquote.

Netquote provides the points, not the agent.

 

[Dave020]

As long as the points are not provided by a reduction in the dollars of earned commission by the agent selling the final product, there is no rebating. It's certainly an enticement, but unless the agent is actually kicking back $$ out of his/her commission to the client or to the vendor in consideration to the client, it is not rebating.

Also, Paul is correct, rebating is illegal only in SOME states. Here in CA it is frowned upon, but not illegal.

 

[djs]

Mike -

Incentivized leads are almost always BS. You know this.
Now, quit trying to kick netquote, go run your business. I can find fault in every lead company out there, I don't need other lead companies telling me about it.

Dan

 

[MikeLevy]

As long as the points are not provided by a reduction in the dollars of earned commission by the agent selling the final product, there is no rebating. It's certainly an enticement, but unless the agent is actually kicking back $$ out of his/her commission to the client or to the vendor in consideration to the client, it is not rebating.

Also, Paul is correct, rebating is illegal only in SOME states. Here in CA it is frowned upon, but not illegal.

This is what I'm curious about. Who bears responsibility?

The agent is not directly rebating his commission. Albeit he is indirectly. Think about it. If the lead buys the policy from the agent and the agent pays Netquote for the lead and Netquote pays Mypoints and Mypoints pays the lead in points worth up to $50, the circle is complete. Value was given which reduces the cost of the policy. Now, many agents don't even know it's going on and personally I don't think they should be held responsible for anything they don't know about. However, who is the DOI going to hold responsible?

The lead generator is not an insurance agent. When it comes to rebating, I've only heard of the DOI going after the insurance agent and insurance companies. The lead generator is not either of these, technically. However, with that offer, have they made themselves a "shadow agent?" If it was simply: get 5000 points for getting a quote, there would be no problem - other than generating a really bad lead! This is something in-between lead generation and insurance sales. Further, $50 isn't necessarily deminimus.

Also, is it more accurate to say that "most" states don't allow rebating? Don't anti-discrimination laws also come into play?

 

[Mark]

My questions is what program do you use to make your banners? I need a banner making program. Free is good also.

 

[moonlightandmargaritas]

Don't anti-discrimination laws also come into play?

Right, wrong or indifferent, insurance of any kind is the essence of discrimination. Legally. The classification of risks.

 

[Dave020]

This is what I'm curious about. Who bears responsibility?

The agent is not directly rebating his commission. Albeit he is indirectly. Think about it. If the lead buys the policy from the agent and the agent pays Netquote for the lead and Netquote pays Mypoints and Mypoints pays the lead in points worth up to $50, the circle is complete. Value was given which reduces the cost of the policy. Now, many agents don't even know it's going on and personally I don't think they should be held responsible for anything they don't know about. However, who is the DOI going to hold responsible?

The lead generator is not an insurance agent. When it comes to rebating, I've only heard of the DOI going after the insurance agent and insurance companies. The lead generator is not either of these, technically. However, with that offer, have they made themselves a "shadow agent?" If it was simply: get 5000 points for getting a quote, there would be no problem - other than generating a really bad lead! This is something in-between lead generation and insurance sales. Further, $50 isn't necessarily deminimus.

Also, is it more accurate to say that "most" states don't allow rebating? Don't anti-discrimination laws also come into play?

Mike,

I suppose that in the broad sense creating an "inducement to buy" by providing something of value could be construed as rebating. I still think that technically the rebate would have to come directly from compensation tied to the sale (commission) returned to the buyer.

Since agents pay for leads either way, it would be hard to justify that the payment for the lead that gets bonus points is any different from the lead that does not, the payment is still the payment.

I really don't see this in the same category with what would be considered traditional rebating. It's an inducement to whatever degree it is successful, however unless the selling agent is returning any of his/her commission dollars back to the insured, it really is not a big deal.

 

[MikeLevy]

I really don't see this in the same category with what would be considered traditional rebating. It's an inducement to whatever degree it is successful, however unless the selling agent is returning any of his/her commission dollars back to the insured, it really is not a big deal.

I don't know if it is a big deal or not because I don't know what the position is from the departments of insurance in each state.