I wonder how much extra supervision the university has been providing in the last 6 years. Do they meet with the advisers? Do they meet with the officers of the house? Do they look at budgets and how much was spent on beer?
And yes I do think the members (and the alums who may own the house) care about insurance. That’s how they got control over the sorority houses It is a blanket rule no matter if it is a house on campus, off campus, a floor in a dorm, or just using a room at the university. No alcohol. The members might be drinking down in the basement on their own but they will be thrown out if caught and the charter will be pulled if the house hosts a party with alcohol.
I will bet there was very little oversight unless the frat houses were on university property.