If there are state regulations on rates it's possible that they can't set the rate to cover the risk while also being in compliance. If they have annualized pro

If there are state regulations on rates it's possible that they can't set the rate to cover the risk while also being in compliance. If they have annualized profit caps and they need to cover those once every 10 year mega disasters, then they might not be able to comply and charge enough to cover it.