Shawn - it is not certain that operators or regulators have turned a blind eye to these type of operations. It may well be that they have been assessed under the system alluded to by KOS and deemed them to be acceptable to the target set by the authority (or the operator).
Even if assessed by the regulator, the operator still has a duty of care to satisfy himself, by a risk assessment, that operations can be conducted safely.
Let me take an example (if I have this wrong please let me know): extended overwater operations for helicopters is defined as an operation over water at a horizontal distance of more than 50 nautical miles from the nearest shoreline and more than 50 miles from an off-shore heliport structure. Following a risk assessment, what operator would permit a helicopter to be launched for a flight to an offshore installation of 95 miles, without carrying a liferaft; even though not required by FAR 135.167.
We must also assume that the launching of a twin without single-engine performance must have been risk assessed and considered to be safe (notwithstanding that KOS's engine-failure rates appear to give the possibility of an engine failure every 5,000 hours - KOS's worst case scenario).
If Shawn's contention that insurance rates reflect the assessment of risk is true - how can such an operation wipe its face?