A Tennessee lender tells a consumer that a personal loan will be approved only if she buys her accident and health policy through the lender's affiliated insurer, even though equivalent coverage is available elsewhere at a lower cost. Under T.C.A. § 56-8-104, this arrangement is best described as:

Why D is correct

T.C.A. § 56-8-104(4) reaches coercion and intimidation as well as boycott. Coercion exists when a party uses its economic leverage to compel an insurance purchase the consumer would not freely make, such as conditioning a loan on buying coverage from a particular source. The affordability and availability of other coverage does not cure the pressure; tying the loan approval to the purchase is the violation the Tennessee Department of Commerce & Insurance enforces.

Why the other options are wrong

• A) The lender's non-insurer status does not help; the statute reaches coercion in insurance transactions regardless of who applies the leverage.
• B) The premium difference is evidence of the harm, but the prohibited practice is the compulsion, not a rate distinction between insureds of the same class.
• C) A boycott requires concerted action by insurers refusing to deal; here a single lender is compelling a purchase, which is coercion.

Memory hook

No loan unless you buy our policy = coercion: tying a deal to a forced sale.