Final answer:
In the absence of laws requiring individuals to purchase insurance, insurance companies may find it less attractive to sell insurance due to the potential for adverse selection. They may try to avoid selling insurance to those who pose high risks. However, insurance can be made attractive if everyone, including those with low risks, is required to buy insurance.
Step-by-step explanation:
When there are no laws requiring individuals to purchase insurance, insurance companies may not find it attractive to sell insurance in that market. This is because without such laws, insurance companies may face a situation of adverse selection, where they are more likely to attract individuals who pose high risks. In order for an insurance market to exist, either insurance companies must find a way to accurately group individuals based on risk and charge them accordingly, or everyone, including those with low risks, must be mandated to buy insurance.