Policy endorsement violates principle of indemnity?

[ahow]

Our DOI just had a filing endorsement come in that refunds the 6-month term premium in full if the insured has ANY complaints about the handling of their claim. The only restriction is that their must have been a claim paid and they must notify the company in an authorized manner to file the complaint (so email, website, agent, USPS, whatever).

They problem we are running into is that this seems to violate the principle of indemnity. For example, a policyholder could pay the premium of $600, have 5 months of coverage, get in an accident with $10,000 of damage and a $500 deductible plus complain and get $600 back netting them a profit of $100.

They are also treating the refunded premium as on offset to premium which we are concerned could affect agents commissions, even though the complaint wasn't about them at all.

There is also the concern that this could lead to moral and morale hazard as well as fraud in filing claims to get premium back.

Since there is no charge for this endorsement, the refunded premiums will be subsidized by those with no claims or a claim with no complaint.

Finally, there could be solvency concerns if this company ends up having far more complaints than expected because people can basically get free money by complaining.

Anyone have opinions on this? Apparently it has been approved/accepted in 14 states so far and probably filed in close to 50.