Rebate amounts accrue on a credit card account when the credit card is used to make purchases.
Under the facts as specified herein, there would be no violation of the Insurance Law when the rebate amount is directed toward payment of a premium for an insurance policy. ABC Corp. proposed a system in which the rebate feature on a credit card would be utilized to pay insurance premiums. A consumer makes purchases using a credit card that accrues a rebate based upon the amount of purchases made. ABC Corp.'s proposed system processes the accrued rebate by depositing it into an escrow account for the consumer's benefit. The consumer will direct ABC Corp. to apply the rebate toward the consumer's outstanding premium balance on an insurance policy.