What is the term for the promise of a discount in premium to encourage the purchase of insurance?

The term for the promise of a discount in premium to encourage the purchase of insurance is rebating. Rebating refers to the practice of returning a portion of the insurance premium to the policyholder as an incentive to purchase a specific insurance product. This practice is sometimes used by insurance agents or companies to attract customers by offering more favorable financial terms.

In the context of Arkansas laws, rebating can be a regulated activity, as it may affect competition within the insurance market. It's important for consumers to be aware of such offerings, as they may indicate a willingness from the insurer to provide more value in exchange for business.

The other options have different meanings. Commission refers to the fee that agents earn for selling insurance policies, while underwriting involves evaluating and assuming the risk of insuring someone or something. Indemnification is the compensation for incurred loss or damage, not a discount or an incentive related to the purchase itself. Therefore, understanding the specific functions and definitions of these terms highlights why rebating is the correct answer in this context.