When I was working in insurance (before the managed care industry) the sentiment was the exact opposite. The belief then was it was entirely too easy for people to start ibnsurance firms.
Insurance is not like other industries. In most industries one invests capital to create a product then sell the product. In insurance one collects money for future expenses. So, you get the money upfront then spend it later.
Young insurance companies tend to be flush with cash and very irresponsible. They would collapse when the expenses hit.
Regulators spend a great deal of effort throwing up road blocks to stop the formation of new unprincipled insurance companies.
Since the money comes in before the expenses, it takes surprisingly little capital to start an insurance pool. The problem is in calculating future liabilities.
Since insurance does not involve the upfront capital of businesses like the railroad, the buyer's co-operative is actually a better model for an insurance compan than the standard corporate model.
The early insurance market was dominated by small unprincipled upstarts. The fact that insurance today is dominated by monopolies is really a sign of regulation run amok.
In other words, the regulatory agencies in state governments have been captured by the industry. The monopolies are a direct result of the captured regulators.
If the 2009 Health Care debate was about breaking the corrupt regulatory agencies, we would have a completely different beast. However, it is simply about adding another layer of corrupt captured regulators sitting between patients and their doctors.
Insurance is not a natural monopoly. It is the captured regulatory regime that creates the monopolistic tendencies.
The Medical Savings and Loan and Regulation
I guess I should add an end note. Unprincipled young insurance companies fail to retain adequate reserves for expenses and fail. This creates the need for regulation. The regulatory system is routinely captured and creates insurance monopolies.
The Medical Savings and Loan does not hold funds in a liability pool. It simply aids individuals in saving. The reserves for the loans are owned by the savings accounts. As this structure is not dependent on a pool, it does not have the temptation to burn through liability reserve. This reduces (if not eliminates) the need for regulation ... breaking the need for regulation and the monopoly resulting from regulation.
Like insurance of old, the Medical Savings and Loan is better suited for the co-oop business model than the corporate model.