Final answer:
Government regulators in the U.S. cannot force insurance companies to sustain low pricing alongside high coverage levels due to financial implications, and the National Association of Insurance Commissioners coordinates state-level regulation efforts. The balance is often maintained through adjustments in insurance premiums, which may result in taxpayers or other insurance buyers covering any shortfalls.
Step-by-step explanation:
When considering the methods of regulating insurance, a true statement is that government regulators engage with the industry primarily at the state level in the United States. Since its establishment in 1871, the National Association of Insurance Commissioners (NAIC) has played a critical role in facilitating collaboration among state regulators, allowing them to share information and strategies.
The primary objectives of state insurance regulators include striving to keep the price of insurance low and working to ensure that everyone has insurance. However, it's important to note that these objectives can conflict with each other and with political interests.
Moreover, government regulators possess limited leverage in compelling companies to sustain offering low prices while providing high coverage levels, as doing so may lead to financial losses. There's a balance that needs to be maintained where insurance premiums are concerned,
with actuarial fairness being a core principle. If premiums are set below actuarially fair levels for a certain group, the financial shortfall must be compensated for by other stakeholders, generally being taxpayers or other insurance buyers.