Anti-rebate laws were introduced more than 100 years ago, after agents’ use of rebates threatened the solvency of life insurance companies and raised questions around unfair discriminatory practices. Supporters of the initial law claimed that they provided market stability, prevented unfair discrimination and kept the focus on the quality of the insurance product versus the size of a rebate. On the other hand, opponents suggest the law infringes upon their rights to competition and stifles innovation. Today, most states have enacted anti-rebate statutes and many have enacted the NAIC model Unfair Trade Practices Act (#880). Over time, several of these states have carved exceptions to the anti-rebating law. While many states have the same categories of exceptions and similar statutory language, the application of the language varies.

This paper evaluates the recent call for change or repeal of the current anti rebate laws by reviewing the evolution of the anti-rebating statutes, evaluating the current application and exceptions to the laws and discussing the options in favor of and against repeal. The paper concludes with recommendations for those states considering change to current laws.