If the insurer requested something unreasonable, you'd go to a different insurer. It's a competitive market after all. But most of the complaints about incompetent security practices boil down to minor nuisances in the grand scheme of things. Forced password changes once every 90 days is dumb and slightly annoying but doesn't significantly impact business operations. Having to run some "enterprise security tool" and go through every false positive result (of which there will be many) and provide an explanation as to why it's a false positive is incredibly annoying and doesn't help your security, but it's also something you could have a $50k/year security intern do. Turning on a WAF that happens to reject the 0.0001% of Substack articles which talk about /etc/hosts isn't going to materially change Substack's revenue this year.
It negatively impacts security, because users then pick simpler passwords that are easier to rotate through some simple transformation. Which is why it's considered not just useless, but an anti-pattern.