The U.S. stock-market crash associated with scrutiny of portfolio insurance was Black Monday, the 19 October 1987 collapse.
Portfolio insurance was a computerized strategy intended to limit losses by selling stock-index futures as markets declined. During the 1987 sell-off, many investors and institutions attempted to sell at the same time. The resulting feedback loop may have intensified downward pressure, although researchers have never identified one explanation that accounts for every feature of the crash.
The Dow Jones Industrial Average fell 22.6% in one session, while other markets also suffered steep losses. Afterward, regulators examined program trading, clearing systems, and the lack of coordinated trading halts. The crash helped inspire circuit breakers and other safeguards. Portfolio insurance did not single-handedly cause Black Monday, so it is more accurate to describe it as one contributing mechanism among several market and economic pressures.