Comment by jhspaybar

Insurance prices are often approved by state regulators. It requires approvals and the state provides backstops and other safeguards. Prices in the insurance industry are pretty controlled. This even goes so far that despite there being a state backstop to many forms of insurance, a broker or agent aren't allowed to even mention this safety net without violating ethics laws. As for "why", I'm not completely sure. My guess here is it's to minimize the chance of the state needing to get involved with bailouts and to reduce competition so that companies don't take on unreasonable risk playing the odds that they'll make it through another year on the happy path without paying claims.