Rebating refers to which of the following practices?

Rebating is defined as a practice where an insurer provides a reduction in premiums or offers some form of inducement to encourage the purchase of an insurance policy. This practice is closely monitored and often regulated because it can lead to unfair competition within the insurance market. Under Connecticut insurance laws, rebating can be considered an unethical practice since it may undermine the principles of insurance pricing and risk assessment.

In this context, by giving premium reductions as an inducement, the insurer could be incentivizing potential customers to choose their policy over those of competitors, which could ultimately distort the market landscape. This is why the correct definition of rebating is focused on premium reductions as a means of enticing or encouraging individuals to purchase insurance products.

Other practices mentioned, such as offering free insurance for referrals, providing bonuses to policyholders, or reducing fees for late payments, do not fall under the specific definition of rebating according to regulatory guidelines. While these practices might be encouraged in various contexts, they do not involve the direct financial incentive of reducing premium payments specifically as a way to attract new customers, which is the hallmark of rebating.