A title company offering a 10% reduction in premium for first policy purchases is engaging in what unfair trade practice?

A title company offering a 10% reduction in premium for first policy purchases is engaging in rebating. Rebating occurs when a title insurer or agent provides a benefit or discount to the policyholder that is not typically part of the standard pricing for services. This practice is considered unfair because it can distort market competition by encouraging consumers to choose one service provider over another based on discounts or incentives that might not be related to the quality or comprehensiveness of the insurance coverage offered.

In many states, including Michigan, rebating is strictly regulated under insurance laws to ensure that pricing remains fair and transparent, allowing consumers to make informed choices based on the value of the service rather than arbitrary discounts. The objective is to maintain a level playing field among all title insurers and to prevent unfair competitive advantages in the marketplace that could lead to issues with affordability and accessibility of necessary insurance products.