State RegulationsTN specificDifficulty 2/5
An insurer tells a Tennessee repair-shop network that it will withdraw its business unless the shops agree to charge reduced rates for the insurer's claimants. This threat of economic retaliation is best characterized under Tennessee law as:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
T.C.A. § 56-8-104 expressly lists boycott, coercion and intimidation among the prohibited unfair trade practices. Threatening to withdraw business to force price concessions is coercion — using economic pressure rather than lawful market competition to compel action — and the statute reaches this conduct regardless of the parties' private bargaining positions.
Why the other options are wrong
- B) Private-business status is no defense; T.C.A. § 56-8-104 prohibits coercive trade practices by those transacting insurance.
- C) Rebating concerns giving premium-related value to induce insurance purchases, not coercing service providers on pricing.
- D) Defamation requires false malicious statements about financial condition or business; a pricing threat is coercion, not a false statement.
Memory hook
Play ball or lose our business — that threat is coercion, not bargaining.