South Carolina Life Insurance Practice Exam

What term best describes an insurer's strategy to intimidate competitors for market dominance?

1. Coercive competition

2. Unfair trade practice

3. Market manipulation

4. Price fixing

The correct answer is: Unfair trade practice

The term that best describes an insurer's strategy to intimidate competitors for market dominance is "unfair trade practice." Unfair trade practices refer to unethical activities that companies may employ to gain an advantage over their competitors. This can include a variety of deceptive or aggressive tactics aimed at undermining competition, such as false advertising, misrepresentation of products, or predatory pricing that can drive competitors out of the market. These practices are designed to produce a competitive edge that is not based on the merits of the insurer’s products or services but rather on coercive or misleading tactics. Therefore, labeling such strategies as "unfair trade practices" accurately encapsulates the unethical nature of the behavior intended to intimidate or pressure competitors in the marketplace.