What term describes the practice of splitting the commission with the buyer on an insurance sale?

The term that describes the practice of splitting the commission with the buyer on an insurance sale is rebating. This practice entails an insurance agent or broker returning a portion of their commission to the buyer as an incentive or a means to lower the overall cost of the insurance premium.

In the context of Massachusetts insurance laws, rebating is specifically prohibited to maintain fairness and prevent insurers from competing on a basis that could undermine the integrity of the insurance market. This regulation is designed to ensure that all policyholders are treated equally and that pricing remains transparent and standardized.

Commission sharing, discounting, and co-brokering do not encompass this specific practice. Commission sharing typically refers to arrangements between agents or brokers as they divide the commission earned from a sale, while discounting generally involves reducing the price of the insurance policy itself without directly involving commission exchanges. Co-brokering refers to a scenario where two or more brokers collaborate to write insurance on behalf of the client, but it does not relate to the practice of returning commission to the buyer.