Jamie2k9 - an insurer ceasing to provide cover to passengers for scheduled airline failure does not mean that the airline will cancel any flights at all - only that it's no longer to buy insurance against the airline doing so. Similiarly, someone living in an area which has experienced flooding every few years might find it very difficult to get home insurance - that does not mean that there will be a flood tomorrow.
The same insurer withdrew cover for passengers on Alitalia in August 2008 but reinstated it in January 2010. While Alitalia had a rather eventful period between August 2008 and Jan 2010 and was regularly the subject of news articles, they continued flying as a normal scheduled airline, and continued to satisfy all the usual EU and Italian regulations.
One might be able to infer that an insurer has more information than is publicly available about Pegasus and has cause for concern, but this does not imply that Pegasus cannot recover.