Final answer:
Rebating in insurance is the practice of an agent giving back a portion of their commission to the policyholder, which is illegal in many jurisdictions and does not involve the agent keeping the funds.
Step-by-step explanation:
The practice of rebating involves an insurance agent returning part of their commission or any other financial incentive to the policyholder as an inducement to purchase an insurance policy. This usually constitutes a violation of insurance laws, which dictate full disclosure of commission rates and prohibit such practices that can constitute unfair competition. So, the statement is false, as rebating does not refer to agents keeping funds belonging to the company, policyholder, or a beneficiary, but rather the opposite, where they offer a part of their commission back to the policyholder.