Let's say there is a fire insurance company X with most of its clients from Region Y. Say that this was Company X's intent, with the knowledge that the following scenario might happen.
A wildfire starts in Region Y, and Company X suddenly owes a lot of money to property owners in Region Y because their houses got burned down by the wildfire. If Company X doesn't have enough money to pay all its clients, what can it be charged with? Are there any geographic limitations on insurance companies to prevent this from happening?