State RegulationsMA specificDifficulty 1/5
Under M.G.L. c. 176D, § 3(4), which arrangement constitutes the unfair practice of boycott, coercion, and intimidation?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
M.G.L. c. 176D, § 3(4) prohibits any boycott, coercion, or intimidation in the insurance business, and the classic form is a collective agreement among insurers to withhold coverage from a class of risks to eliminate or suppress competition. The practice is the coordinated refusal to deal, enforced through group pressure rather than market performance. The Massachusetts Division of Insurance enforces the prohibition, and the Commissioner's powers under M.G.L. c. 176D support investigations of such arrangements.
Why the other options are wrong
- B) Underselling a competitor's rates, without collusion or force, is competition rather than a boycott under M.G.L. c. 176D, § 3(4).
- C) A replacement supported by a documented needs analysis is ordinary producer activity, not coercion of the client.
- D) Good-faith claim litigation is a lawful exercise of the insurer's rights, not intimidation within the meaning of M.G.L. c. 176D, § 3(4).
Memory hook
Boycott = insurers linking arms to starve a market — collusion, not competition.