Should government retroactively rewrite contracts during coronavirus?

Some legislators are introducing bills to force insurance companies to pay for losses even though the contracts do not cover the losses (WSJ, March 2020). Three questions come to my mind.

1. What is the role of government in the market system?
2. Does retroactively rewriting contracts increase voluntary exchange or decrease it?
3. When would prices in voluntary contracts be lower, when people know that government may rewrite them to increase costs paid by sellers or when people know that government will enforce them as written.

Here is a money quote: "The rule of law and contracts are crucial in a free society, especially in times of uncertainty when it is a restraint on bad policies driven by panic."