§ 2324. Rebating and discrimination. (a) No authorized insurer, no
licensed insurance agent, no licensed insurance broker, and no employee
or other representative of any such insurer, agent or broker shall make,
procure or negotiate any contract of insurance other than as plainly
expressed in the policy or other written contract issued or to be issued
as evidence thereof, or shall directly or indirectly, by giving or
sharing a commission or in any manner whatsoever, pay or allow or offer
to pay or allow to the insured or to any employee of the insured, either
as an inducement to the making of insurance or after insurance has been
effected, any rebate from the premium which is specified in the policy,
or any special favor or advantage in the dividends or other benefit to
accrue thereon, or shall give or offer to give any valuable
consideration or inducement of any kind, directly or indirectly, which
is not specified in such policy or contract, other than any valuable
consideration, including but not limited to merchandise or periodical
subscriptions, not exceeding twenty-five dollars in value, or shall
give, sell or purchase, or offer to give, sell or purchase, as an
inducement to the making of such insurance or in connection therewith,
any stock, bond or other securities or any dividends or profits accrued
thereon, nor shall the insured, his agent or representative knowingly
receive directly or indirectly, any such rebate or special favor or
advantage, provided, however, a licensed insurance agent or a licensed
insurance broker may retain the usual commission or underwriting fee on
insurance placed on his own property or risks, if the aggregate of such
commissions or underwriting fees will not exceed five percent of the
total net commissions or underwriting fees received by such licensed
insurance agent or insurance broker during the calendar year.

(b) Within the meaning of subsection (a) hereof, the sharing of a
commission with the insured shall be deemed to include any case in which
a licensed insurance agent or a licensed insurance broker which is a
subsidiary corporation of, or a corporation affiliated with, any
corporation insured, received commissions for the negotiation or
procurement of any policy or contract of insurance for the insured.

(c) This section shall not prohibit any insurer from equitably
distributing to its policyholders dividends payable from surplus on
earned premiums, nor prohibit the return at any time during the term or
at the termination of the contract of insurance of dividends, savings or
the unused or unabsorbed portion of premiums and premium deposits to
policyholders of a mutual insurer or to subscribers of a reciprocal
insurer, nor prohibit any insurer or insurance agent from paying
commissions to a licensed insurance broker for negotiating a policy or
contract of insurance, nor prohibit any licensed insurance broker from
sharing or dividing a commission earned or received by him with any
other licensed insurance broker or brokers who shall have aided him in
respect to the insurance for the negotiation of which the commission has
been earned or paid.

(d) This section shall not prohibit the making of temporary contracts
of insurance, either by temporary binders or other memoranda, if the
premium applicable to the insurance shall be due and shall be paid for
the time during which the insurance is in force by virtue of the
temporary contract.

(e) This section shall not apply to any policy or contract of
reinsurance nor to any contract or policy of life insurance, accident
insurance or health insurance which is subject to the provisions of
section four thousand two hundred twenty-four of this chapter, nor to
any contract or policy of marine insurance, other than contracts or
policies of automobile insurance, or of marine protection and indemnity
insurance, nor to any insurance contract, or rate of insurance in
connection with any insurance contract either against loss or damage to,
or legal liability in connection with, any property located wholly
outside of this state or any activity carried on outside of this state
or any motor vehicle or aircraft principally garaged and used outside of
this state.

(f) Any person or corporation violating the provisions of this section
shall, in addition to all other penalties provided by law, pay to the
people of this state as a penalty the sum of five hundred dollars for
each such violation.