Guest Post: Free Warranties Violate Maryland’s Anti-Rebate laws

Did you know … that the Maryland Insurance Administration recently confirmed that free warranties violate Maryland’s anti-rebating laws?

The Maryland Insurance Administration (MIA) recently reaffirmed that it is a violation of Maryland’s anti-rebating laws for title producers to give away free home warranties or free home inspections to consumers, even if those giveaways are offered to all consumers and are not contingent on the purchase of title insurance.

The MIA hosted a June 7, 2018, webinar as a follow up to Bulletin 17-16, issued on December 18, 2017. In that bulletin, the MIA expressly stated that:

“Offering rebates or discounts in the form of free home warranties or home inspections as thank you gifts to consumers who purchase a title insurance policy from an insurance producer is prohibited by Maryland insurance law. Likewise, offering all consumers seeking title insurance free home warranties or inspections regardless of whether a title insurance purchase is ultimately made is also prohibited by Maryland insurance law.”

Despite this guidance from the MIA, many in the title industry continue to offer free home warranties or free home inspections to consumers.

During the June webinar, the MIA again emphasized that this practice is prohibited under Maryland law. A title producer caught violating Maryland’s anti-rebating laws is subject to various penalties including denial, suspension or revocation of license, civil penalty, and restitution to any consumer who has suffered financial injury as a result of the prohibited activity.

Contact info: Meredith S. Campbell Chair, Employment and Labor Group, Shulman Rogers [email protected] | T 301.255.0550 | F 301.230.2891