Financial sector regulation has been a hot topic ever since the passage of the Dodd-Frank reform act. Initially, many insurers worried they would be lumped in with the banks that exposed the nation to systemic risk. By and large, those fears have been unfounded, and carriers will face few onerous fundamental oversight changes. But this is far from the only major regulatory challenge they should be concerned with.

A new report from the Heartland Institute has handed out grades to each state's insurance regulation scheme and 10 received an F or a D, with the country's four most populous states (Florida, California, Texas and New York) ranking in the bottom six and Florida finishing dead last. States were ranked on how free consumers are to choose the products they want and how free insurers are to offer products of their choosing.

"Florida experienced a wave of insurer insolvencies resulting mostly from over-regulation of the market," states the report. The result of these insurer failures in Florida was that many consumers were "sent scampering" to other carriers and the state-run Florida Citizens Property Insurance Corporation.

The poor grades in these large states come in contrast to the national trend, however. Overall, the Heartland Institute did find a positive uptick in freedom for buyers.