may be unable to handle the event without additional assistance (Lonkevich 3).
The insurance market is regulated in a number of different areas, including what types of companies are allowed to participate in insurance in the first place. Because of the way insurance transactions are structured, the industry is regulated as a financial service. This puts it in the same category as banks and other financial institutions. The fact that the insurance industry is responsible for paying out large sums of money during periods of distressed economic times for the insured (due to natural disasters or other losses) means that an efficient and effective industry can reduce the number of people who end up relying on public assistance and funds during those situations. As such, regulation at both the state and national level is in the interest of the governments involved since the government has a stake in keeping individuals from turning to public funds during times of need.
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