insurance. Over time, however, the fundamental law of insurance must hold: the average amount individuals

receive cannot exceed the average amount paid in premiums. When rules are passed to keep premiums low,

insurance companies try to avoid insuring any high-risk or even medium-risk parties. If a state legislature

passes strict rules requiring insurance companies to sell to everyone at low prices, the insurance companies

always have the option of withdrawing from doing business in that state. For example, the insurance regulators

in New Jersey are well-known for attempting to keep auto insurance premiums low, and more than 20

different insurance companies stopped doing business in the state in the late 1990s and early 2000s. Similarly,

in 2009, State Farm announced that it was withdrawing from selling property insurance in Florida.

In short, government regulators cannot force companies to charge low prices and provide high levels of
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