Which statements about rebating are TRUE?

Rebating refers to the practice where a life insurance producer offers a portion of their commission as an incentive for a policyholder to buy a particular insurance policy. The first statement points out that rebating is allowed in certain circumstances. This is accurate as some states allow rebating under specific conditions, particularly if it complies with state regulations and is disclosed to the customer. The second statement indicates that rebating involves special inducements to encourage policy purchases, which is also true since it directly relates to offering these commissions or benefits as a form of incentive for customers to choose a specific insurance product.

Both statements provide a clear understanding of what rebating entails, and together they illustrate the nuances of this practice within the insurance industry. Thus, the combination of these two true statements confirms the accuracy of the provided answer regarding the nature and implications of rebating in the context of life insurance sales.