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Hedera is meant as a neutral base layer for things

to be built atop of, these services such as insurance and recovery are important for average users yes but these are services built ontop of the underlying neutral network that is hedera, such as the wallet with insurance that you mentioned.

Also which counties legal systems would be included to be allowed to change hbar balances? This is a global network.

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It won't as Hedera stay against it and they said they will never freeze or delete account (with balance) or do anything like recovery. I am saying technically can be done as many says the DLT is magic solution and cannot be done. It was done twice in Bitcoin and Ethereum but for everyone. In future the winning DLT in space will only be those with recover at ledger for individual addresses or accounts vs those that don't. Ethereum and Bitcoin did the right thing, but that was about fixing bugs, but I am more interested in recovery at personal level.

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