Final answer:
The shortcoming of state regulation of insurance is that it may not effectively achieve the goals of keeping insurance prices low and ensuring everyone has insurance. This can lead to conflicts, entanglement in politics, and other groups having to cover the resulting financial gaps.
Step-by-step explanation:
A shortcoming of state regulation of insurance found by Congressional committees and the General Accounting Office is that state regulation may not effectively achieve its two main goals: keeping the price of insurance low and ensuring that everyone has insurance.
These goals can sometimes conflict with each other and become entangled in politics. For example, if insurance premiums are set too low, companies may not be able to provide high levels of insurance coverage and may need to take losses over a sustained period of time.
This can lead to other groups, such as taxpayers or other insurance buyers, having to make up the difference.