Revised Guidelines on Rebates and Gifts in ND

The North Dakota Insurance Department has revised its guidelines on rebates and gifts to expand current limits and allow producers to conduct raffles or drawings with prizes valued in excess of $100 if these conditions are met:

• There is no financial cost to an entrant to participate;
• The drawing or raffle does not obligate a participant to purchase insurance;
• The prizes are not valued in excess of a reasonable amount determined by the Insurance Commissioner;
• The drawing or raffle is open to the public; and
• The raffle or drawing is offered in a manner that is not unfairly discriminatory and may not be contingent on the purchase, continued purchase, or renewal of a policy.

The definition of rebating has been revised so as not to include an offer by a producer of value-added products or services at no or reduced cost. The products or service must provide loss mitigation or loss control, reduce claims costs or claim settlement costs, provide education about liability risk or risk of loss to persons or property, enhance health or financial wellness, provide post-loss services, or a similar type of support.

Additionally, value-added products or services must be based on documented, objective criteria and offered in a manner not unfairly discriminatory. Producers must also, upon request, ensure those offered the value-added products or services are provided with contact information for questions or inquiries.

If a producer does not have sufficient evidence, but has a good-faith belief the product or service meets the necessary criteria, the producer may provide the product or service in a manner that is not unfairly discriminatory as part of a pilot or testing program for no longer than one year. However, the producer must notify the North Dakota Insurance Department of the program before launching and can only proceed with the program if the Department does not object within 21 days of notice.

The producer may not offer or provide insurance as an inducement to the purchase of another policy or otherwise use “free,” “no cost,” or words of similar import in an advertisement.

If you have questions, please contact the North Dakota Department of Insurance at ndlicensing@nd.gov or call 701-328-2440.