Glossary

Section 41

The provision prohibiting rebates offered to induce someone to take out a policy.

Section 41 of the Insurance Act, 1938 prohibits offering, and accepting, any rebate of premium or of commission as an inducement to buy a policy.

It excepts a rebate allowed in accordance with the insurer’s own published prospectus or tables — so a discount the insurer itself publishes is not caught. What is caught is an agent offering you a cut of their commission.

Related terms

  • Commission The payment an insurer makes to an intermediary for placing and servicing business.
  • Insurance agent An individual appointed by an insurer to solicit and service its insurance business.

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