State RegulationsPA specificDifficulty 1/5
Under Pennsylvania's Unfair Insurance Practices Act, what does the prohibition on boycott, coercion, and intimidation cover?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
The boycott, coercion, and intimitation prohibition at 40 P.S. § 1171.5(a)(4) targets agreements and conduct that result in a unreasonable restraint of insurance trade, as well as coercion and intimidation used to force parties into or out of insurance transactions. Comparing quotes, filing forms, or recommending costlier coverage are ordinary market activities; squeezing a party through coordinated refusal to deal or through threats is not. Violations are enforced by the Pennsylvania Insurance Department under the unfair practices framework of 40 P.S. § 1171.5.
Why the other options are wrong
- A) Shopping quotes across insurers is the opposite of a boycott; it promotes competition rather than restraining it.
- B) Filing policy forms for approval is a routine regulatory obligation, not coercion or a restraint of trade.
- C) Recommending more expensive coverage may raise suitability questions, but it is not the trade-restraint conduct that the boycott, coercion, and intimidation clause addresses.
Memory hook
Ganging up or squeezing in is the boycott clause; honest competition is not.