To stay out of the underlying debate ( silly me, I thought is was settled back in the 70s ).
The states regulate insurance as it is now, the state says what an insurance company can and cannot do with claims and policies.

The state insurance boards do quite a bit for the insured.
If your state has mandatory minimum auto coverage, those that have less than stellar driving records still need to have insurance to drive.
Rather than the insurance companies being able to avoid the risk of this type of driver by not writing any of these policies, the insurance board requires them to write policies from a pool.
The rate might be stupid high (when we look at it ), but they are still required to write the policy. The pool of this type of driver is divided up, and every insurance company that sell auto insurance in the state is required to take their share of this driver type, so they cannot just jack the rates so high, nobody would buy from them.
This is just one easy example, the state insurance boards do a bunch of other things to help the insured, a lot of people do not know if you have a legitimate complaint about an insurance company, you can request an investigation of the company, and if it is legit, they will be told how to correct the action, and be levied a hefty fine ( usually 10K per incident ).

The one in the OP's post, is one case that they are "accidentally" doing something for the insurance companies, for what ever the reason is.

IL is about to pass an insurance law, that is going to screw up a lot of insurance pools in the state and it might even cause carriers to not write policies for pools in IL anymore.
This means schools ( or other entities ) that can only get the needed coverage through pools are going to be SOL ( take a stab at self insurance ? ), or have a huge premium to fund ( via property taxes in the case of municipalities and schools ).

Has anyone read all the dec pages that come with every policy ?
Quite a bit of it is state insurance rules, that outline what the company writing the policy can and cannot do.
Similar to the company writing the policy, the state ins bd also has rules for what an insurance broker can and cannot do.

One of the big items ( in my opinion ) is the state ins bd requiring errors and omissions insurance. This means if they ( policy writer or the ins broker ) screw up the policy, and you should have been covered, but are not for some reason, they still have to pay, but it is from their policy, not your policy missing the coverage. This is why sometimes you might be required to sign pages declining coverage that you should have. This is so the E&O policy is not used for someone trying to get insured on the cheap.