So I am curious if this action was warranted because enough people cried about it and then the devs realized their computations were not compensating for the global moving average market prices of two weeks or if it is documented somewhere that insurance fraud is against the rules.

If it was the former then I am completely ok with it but if corps are being penalized for a Dev oversight then I don’t think that is right now matter how it has affected the economy.  I understand that mistakes can happen like this but it looks more like peer pressure than admitting a mistake and moving on.

So for example...lets say that they realize that the hit dispersion and damage calculated from skills for Medium EM Guns were 30% too high and as a result pilots employing these guns were too effective in combat are they going to refund the victims of those Kains the bots they lost? 

Where will this kind of retroactive compensation end?  I am all for balance in these games but everyone knows "insurance fraud" has been going on here for a long time now.