Which term describes paying part of the commission to the buyer as an incentive?

• A. Rebates
• B. Rebating
• C. Kickbacks
• D. Fee sharing

Answer: (B)

Paying part of the commission to the buyer as an incentive is called rebating. This term names the act of giving back part of the commission to influence the buyer’s decision, not just the payment itself. The noun form “rebates” would refer to the payment itself rather than the act. Kickbacks imply illicit payments to someone to influence a decision, which isn’t the standard, appropriate term in this context. Fee sharing isn’t the conventional label for this practice. In many jurisdictions, rebates to policyowners are restricted or prohibited to protect consumers and keep competition fair, which is why rebating is the correct concept.