What is the practice of giving something of value to an unlicensed party to induce the purchase of insurance called?

The practice of giving something of value to an unlicensed party to induce the purchase of insurance is referred to as rebating. Rebating involves offering incentives such as cash, gifts, or services as a means of encouraging a potential client to buy an insurance policy. This practice is typically prohibited or regulated in many jurisdictions because it can lead to unethical behavior, create an uneven playing field among agents, and pose risks to the integrity of the insurance market.

Rebating is seen as problematic since it can influence a buyer's decision based on the value received rather than the merits of the insurance product itself. This undermines informed purchasing decisions and can create conflicts of interest. In contrast, practices like commission sharing or endorsements involve licensed parties and are regulated under different standards. Kickbacks also imply a type of illicit arrangement, but in this context, they do not specifically match the definition of offering something to an unlicensed party to induce insurance purchases. Thus, rebating is the term that most accurately describes this activity.