Warning Shot Across the Bow – The CA Dept. of Insurance and Rebating

San Francisco Partner Elizabeth Tosaris authored an article for Insurance Coverage Law Center discussing California rules on rebating and how the California Department of Insurance has operated under these laws. The California Department’s dislike of rebating practices differs from the position of the National Association of Insurance Commissioners (NAIC), as the NAIC has recently made rebate-friendly amendments to its model act, she writes. Tosaris examines a recent action by the California Department of Insurance signaling its desire to limit the practice of rebates to the fullest extent permitted by law.

“The timing of both the initiation of the action – while the NAIC was considering a loosening of rebate rules – and the settlement orders – shortly after the NAIC adopted the revisions to the model act and allowed additional rebates – could be viewed as significant,” she writes. “Consequently, the industry would be prudent to ensure that any rebating activities that occur in the state are clearly outside the prohibitions of the remaining anti-rebating statutes.”

To read the full article, click here.