These cases happen VERY frequently in your country. Just because you don't hear of them in your own personal network, does not mean it does not happen.
No insurance, I repeat, no insurance should be like this. Obama spoke publicly about these very issue years back. It happens. More frequently than it should. It is sadly perfectly legal, and you have no assurance that the company you have your insurance with, do not have the very same type of roles within the company. It is very common. Obviously, the insurance company cannot get out of every case they have, hence why you were covered. If every client has this issue, it would be the number one agenda for every single politician running for the presidency.