States that prohibit accepting services for payment of insurance premiums cite which premise?

• A. Taxes will be avoided.
• B. There will be no verifiable record of payment.
• C. Rebating is possible by excessive valuation of the services.
• D. Regulators cannot order return of services under free-look provisions.

Answer: (C)

The key idea is anti-rebating: states prohibit accepting anything of value other than the premium in exchange for insurance to prevent improper incentives. When services are offered or accepted as payment, they can be valued in a way that effectively reduces the premium or acts as a bonus, creating a rebate. If the services are valued excessively, they can serve as an inducement for purchasing or keeping coverage, which these laws aim to stop. That’s why the premise cited is that rebating is possible by excessive valuation of the services. The other options miss the fundamental concern: it's not about avoiding taxes, maintaining payment records, or free-look provisions, but about preventing rebates through overvalued non-cash considerations.