State Legislature Passes Bill Modernizing Rebating and Inducement Laws

Last week, Governor DeWine signed into law Senate Bill 256, sponsored by Senator Steve Wilson (R-Maineville). The bill modernizes laws governing rebating, inducements, value added products and services. In addition, it also deals with provisions related to travel insurance and improves the insurance regulatory market in Ohio by addressing electronic signature, group capital calculation and annuity nonforfeiture amounts. 

The legislation goes into effect 90 days after the bill is signed, on July 21, 2022 

OIA supported the provisions in S.B. 256 to modernize Ohio’s insurance marketplace by adopting several changes recommended by the National Association of Insurance Commissioners to their Unfair Trade Practices Model Law dealing with rebating, inducements and value-added products and services. 

Key provisions in the legislation related to rebates, inducements and value-added products and services include the following: 

  • Allow insurers and agents to provide value-added products and services at no or reduced cost when such products or services are not specified in the policy.  
  • Requires that value-added products and services must follow certain criteria:  

(1) it relates to the insurance coverage  

(2) are designed to satisfy certain permitted purposes (mitigate loss, reduce claims, provide education about risk, etc.) and  

(3) are reasonable in comparison with the insurance premium.  

  • Monetary threshold for rebates and inducements –  
  • Commercial Lines – the dollar threshold that would be allowed for meals, gifts, etc. for commercial clients would increase from $50 per year to no dollar amount specified but rather an amount that is “reasonable in comparison to the premium”. Commercial property and casualty will be completely exempted from rebating rules. 
  • Personal lines – the amount will be determined by the superintendent per policy year per term or calendar year. The National Association of Insurance Commissioners (NAIC) has suggested allowing the amount that can be spent on meals and items to the lesser of 5% of premium or a set amount of $250. This change is not included in the legislation, rather is likely to be reflected as an update to the Ohio Department of Insurance bulletin that specifies the $50 yearly limit. 

OIA testified in both the House and Senate Insurance Committee echoing the necessity to update the current antiquated anti-rebating rules that are in place while still properly protecting Ohio’s insurance consumers. You can find CEO, Jeff Smith, testimony here 

In addition to OIA, several other organizations also supported S.B. 256 including, the Ohio Insurance Institute, Nationwide, Association of Ohio Life Insurance Companies, American Property Casualty Insurance Association, and U.S. Travel Insurance Association. 

OIA will produce agent guides, FAQs and webinars further explaining the changes to the rebating laws once the bill is signed into law. Please contact Lauren Reid at with questions. 

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