These restrictive laws are designed to protect some segments of the industry from competition of other segments, and should be taken off the books. This gross distortion and misuse of insurance law and regulation can exist, because regulation is the property of the insurance industry, not the public interest. Unfortunately, there is no strong consumer lobby in Harrisburg, in Trenton, or for that matter, in any other capital city. So the insurance industry, with rare exceptions, gets pretty much what it wants. But that's the way the regulatory, legislative and political system works.
Money runs politics, and, consequently money runs the system.
Here's some more evidence of who insurance commissioners work for. The public rarely knows their names or where they hang out or what they are doing. I was once on a radio talk show, blasting the insurance commissioner for being invisible as far as the public goes. This commissioner heard my volleys and called in to try and refute them. Unfortunately, neither the producer of the show nor the talk show host even knew her name.