If you are testing data entry, Have a look at WinRunner. Dont know the cost, but a good testing tool for mainframe as well as GUI based applications.
it is important to know which development tools have been used to build this insurance application. the testing is required for application and not for the mainframe, so application can be put on a test server, some open source test tools can perform the testing.
now the important things to know is:
what development tools have been used?
what testing is to be performed ?
A third option is to outsource it will be as costly as buying a tool like winrunner.
I have used Compuware’s TestPartner successfully with Mainframe applications. This is a window/web record and playback testing tool. Because you are recording against the emulator window you will have to add events to synchronise with the mainframe application being tested. (TestPartner will only recognise the emulator window it is focused on). This is easy to do in TestPartner and I have done this successfully for a bank and a credit card checking agency and a car insurance company.
You could also consider Hiperstation. This is a tool that at resides on the mainframe (also Compuware product). There is no synchronisation problem and comparing actual and expected screens is done automatically. It can also be used for load testing by the running it in batch via some JCL and adding some HiperStation parameters.