Which of the following actions is illegal under the rebating regulation?

Returning a portion of the premium to the policyholder is considered illegal under the rebating regulation because it creates an imbalance in the competitive landscape of the insurance market. This action can tempt potential clients with a financial incentive that might unduly influence their decision to purchase a policy based on monetary benefits rather than the true value and coverage offered by the insurance product itself. Rebating can misrepresent the insurance policy's value and violate fairness in the marketing practices of the insurance industry.

In contrast, offering value-added services, providing loyalty rewards, and discounting premiums for multiple policies can often be considered legitimate ways to enhance customer relationships and encourage retention. These actions generally promote customer loyalty without resorting to direct financial enticements that could disrupt fair competition or lead to underinsurance. Therefore, they typically comply with the regulatory framework designed to maintain ethical practices within the industry.