Insurance Rebate Reform Model Act

The act creates an additional framework for insurance rebate law to allow usage of insurance rebates and related practices in a manner that meets specified criteria to maintain consumer protections.

In provisions regarding unfair and deceptive trade practices in insurance, the act identifies, as an additional practice that shall not be construed as falling within the definition of discrimination or rebates, the practice of offering or providing a value-added product or service not specified in the insurance policy, at no cost or at a reduced cost, if the product or service:

• Relates to the insurance coverage; and
• Is primarily aimed to:
• Provide loss mitigation or loss control;
• Reduce claim costs or claim settlement costs;
• Provide education about liability risk or risk of loss to individuals or property;
• Monitor or assess risk, identify sources of risk, or develop strategies for eliminating or reducing risk;
• Enhance health;
• Promote financial wellness through items such as educational or financial planning services;
• Provide post-loss services;
• Encourage behavioral changes to improve the health or reduce the risk of death or disability of a customer; or
• Assist in the administration of employee or retiree benefit insurance coverage.

The act implements additional provisions governing the usage of insurance rebates, including requirements to offer such rebates at a reasonable cost and in a manner that is not unfairly discriminatory and that provides certain other customer protections.

(Note: This summary applies to this bill as enacted.)