State regulators Monday approved third-quarter health insurance rates that will raise premiums an average of just 1.2 percent in the market serving small businesses and individuals, continuing a trend of more modest increases seen over the past three quarters. Several health insurance carriers, including Tufts Health Plan of Watertown and Worcester-based Fallon Community Health Plan, will reduce their rates - a rarity in Massachusetts health care - according to data from the state Division of Insurance.