However, I'm not so certain that allowing insurance companies to cross borders is going to be a panacea.
California already has a large number of insurance companies operating within its borders, and yet they are all jacking up their rates year in and year out.
If we completely lower the walls between states then my fear is that you will have the same thing happening in the insurance industry that happened in the banking industry: a few large insurance companies with a virtual oligopoly on the market making bad decisions in unison and tanking the entire system.
Then of course the government would have to come in and bail them all out as the insurance companies would then be "too big to fail".
What stops the bigger companies from setting up another company and going into other states now?