What is a potential consequence for an insurer engaging in a pattern of unfair trade practices?

A pattern of unfair trade practices by an insurer can lead to severe regulatory consequences, including the revocation of their license. This action serves as a key tool for state insurance regulators to maintain a fair and competitive marketplace. When an insurer engages in practices that are deemed unfair—such as misrepresentation, deceptive advertising, or fraud—it undermines consumer confidence and the integrity of the insurance market.

The revocation of a license acts as a deterrent against unethical behavior by companies in the insurance industry. It ensures that only those insurers that comply with laws and maintain fair practices can operate, thereby protecting consumers from misleading and potentially harmful practices. The other options, such as improved consumer trust, reduced premiums, or increased market share, do not accurately reflect the repercussions that come from unfair trade practices; rather, they suggest positive outcomes which are typically not associated with such unethical conduct.