One insurance company pays, they all benefit. Companies would simply wait for someone else to pay. There would need to be some kind of government agency forcing all of them to pay in.

Sure, with some caveats: You can scope it down to only very large companies very easily.

They would pass the costs to customers. In essence, your suggestion leads to a Cyber tax collected by the IRS.

That's a bit oversimplified, I think. To the companies affected by the regulation, sure. Not every company would need to buy in. (At least, I hope not. Mom and pop shops aren't exactly flush with cash!)

Next they have to divvy up the funding to pay OSS developers. Now you have the same problem you started with.

It's the spirit of the same problem, but the distribution is different.

Before, it's "make the US government funnel taxpayer dollars into OSS directly". Now it's "the US government forces megacorps to buy insurance, and the insurance companies figure out how to minimize risk by investing in the supply chain" one layer removed.

One reason why this might be better than the original version of the problem is that you can simply (but not easily; nothing in politics is ever easy) reproduce the same regulations and insurance business models in other countries, and the load is now balanced across the globe. Then the whims of individual countries' leadership is no longer a single point of failure.

In the abstract, you are correct. But the details matter.

Of course, I could be wrong. I'm not an expert on policy, economics, or law.