Which of the following exemplifies a producer involved in the unfair trade practice of rebating?

The correct answer demonstrates a producer engaging in the unfair trade practice of rebating by suggesting that the client’s first premium will be waived. This practice is considered unfair because it effectively provides an inducement that is not available to other policyholders, creating an unequal advantage. Rebating can distort competition and undermine the integrity of the insurance market, as it leads to practices that can mislead consumers into purchasing policies based on benefits that are not representative of the overall value of the insurance product.

While the other choices involve unethical practices, they do not specifically reflect rebating. Charging a higher premium for the same policy does not constitute rebating but rather reflects poor market pricing practices. Making deceptive statements about a competitor could be more aligned with false advertising and unfair competition rather than specifically rebating. Inducing an insured to drop a policy for an advantage may involve unethical persuasion but does not directly relate to the act of providing a rebate.

Thus, the act of waiving a premium provides a concrete example of rebating, highlighting the unfair advantage it creates for the producer and undermining fair competition among insurance providers.