Their competitors would also know, and specifically know which category to compete in to do the most damage.

I don't think that's possible. I don't think this is a "cooperate greed, nobody wants to end the gravy train by starting a price war" situation. I think it's a "the myriad of stuff you have to do to run a compliant company sets the price floor" situation. The fact that there is no nuclear "well I guess I just can't afford insurance, if I lose my house so be it" option available to customers prevents it all from caving in.