Subsidised insurance for people in cyclone or flood-prone areas a bad idea, say experts

Insurance bill for damage caused by Cyclone Debbie in Queensland and New South Wales is predicted to top $1bn

Experts have argued against subsidising insurance premiums for people in cyclone or flood-prone areas as the multi-million dollar cleanup continues after Cyclone Debbie, saying that will only provide short-term relief.

The insurance bill for damage caused by the cyclone, which struck near Airlie Beach on 28 March before causing widespread damage in northern Queensland and extensive and ongoing flooding in the state’s south-east and northern New South Wales, reached $410m on Thursday and is predicted to top $1bn.

A number of homes and businesses, particularly in the NSW town of Lismore, were reportedly uninsured or without flood insurance, because premiums for flood insurance had climbed as high as $30,000 a year.

It has sparked renewed calls for a review of the insurance regulations covering natural disasters.

But Justine Bell-James, an expert in environmental and insurance law from the University of Queensland, said moving to reduce premiums just pushed the cost of recovery on to government and would not reduce the scale of the damage.

“If we are just covering the cost of the premium that isn’t going to improve anything in the future,” Bell-James told Guardian Australia. “All the other costs – loss of income, loss of residence, psychological damage, are still going to occur. We are going to have the same problems in the future with insurance premiums going higher and higher.”

Bell-James said funding should instead go toward mitigation measures such as flood levees and ensuring houses are built to a cyclone standard.

That was the conclusion of a Productivity Commission report following the 2011 Queensland floods, which recommended the federal government increase disaster mitigation funding to $200m a year, and also the conclusion drawn by the northern Australia insurance premiums taskforce in 2016.

Bell-James said existing mitigation measures – such as the flood levee in Lismore, which was breached when flood waters reached the town last week – should also be reviewed to ensure they can withstand more severe flood and storm events under climate change.

“We use the language of a one-in-100-year flood, but what that really means is there’s a 1% chance of that flood happening any given year,” she said. “Under climate change, that could increase to a 5% or even 10% chance.”

Insurance Council of Australia spokesman Campbell Fuller said government intervention in the insurance market “would have little impact on affordability, would risk encouraging inappropriate development, and would expose taxpayers to billions of dollars of losses”.

Fuller said the industry was pushing for a greater government spend in permanent mitigation measures, including a stricter land use planning and building codes. He also defended the availability of flood insurance, saying 96% of all household policies included flood insurance, up from 3% prior to the 2011 floods.

“The premium charged reflects the flood or other natural hazard risk to each property based on the latest available government data and the insurer’s underwriting criteria,” he said.

Insurance premiums in northern Queensland increased by 80% between 2005/2006 and 2012/2013, the period covering Cyclone Larry, the Mackay storm, Cyclone Yasi, and the Brisbane floods, according to a 2014 report by Australian government actuary Peter Martin. Premiums for Brisbane in the same period increased by 45%, while premiums in Sydney and Melbourne increased 12%.

Choice spokesman Tom Godfrey said the price increase was unsustainable and left many people in the highest-risk areas unable to afford insurance. “When homeowners can’t afford insurance in disaster prone areas, there’s clearly a big problem with the market,” he said.

Susan Quinn, insurance policy expert from the Consumer Action Law Centre, said there was currently no requirement that coverage offered by insurance companies is appropriate for the person seeking insurance, so long as the limits of the policy were clearly set out in the policy documents, which 80% of people do not read.

“Ultimately that assumption is that you buy insurance and automatically assume that is going to cover you for the things that might happen to your house, but that’s not guaranteed under law,” she said.

Quinn said updating the minimum standard cover definition, which was set in 1984, and requiring insurance companies to explicitly state when they are offering less than standard cover, would make things fairer for consumers.



Fearless Brokers on Disruption by Insurtech: ‘Bring It On’

Executives of retail and wholesale property/casualty brokers, who have heard predictions about disintermediation for years, are not worried about the latest wrinkle in the stories of their demise—the rise of insurtech disrupters with digital platforms.

Steven DeCarlo, chief executive officer of AmWINS, summed up their thoughts in three words: “Bring it on.”

Speaking during a CEO broker panel at the S&P Global Ratings Insurance 2017 conference last month, DeCarlo responded to a question posed by S&P Director Julie Herman whether insurtech startups or existing carriers, such as Berkshire Hathaway, Travelers and Allstate, launching direct-to-customer initiatives in the small business commercial insurance space creates a long-term threat to brokers.

“At the very beginning, when we wanted to raise capital, everyone said, ‘You will be disintermediated,’” DeCarlo said, thinking back to the launch of AmWINS over a decade ago. “My response was, ‘Maybe.’ Here we are [today] with a billion dollars in revenue, up from when we started when we had $10 million in revenue.”

I’m a believer in retail clients. I’m a believer in local relationships.

To avoid disintermediation, a broker has to bring value, he said.

“I sure as hell am not worried about insurtech disintermediating what I do for a living. They’d better be good at their jobs because I’m damn good at sales,” he continued.

“They can be damn good at technology, but they’d better find the retail client. I’m a believer in retail clients. I’m a believer in local relationships. I’m a believer in people, and I’m a believer that technology can change the way we do business. I am not worried about a guy buying a policy at 10:00 at night to disintermediate me. Bring it on.”

As for insurers selling direct, “I’m not worried about insurance companies thinking they can do sales,” he added. “They can’t. Trust me, they can’t.”

“You come to me, and I get 700,000 submissions today, and I can reduce frictional costs and I can deal with quality retailers who trust me to take care of their clients in a way I’ll never get noticed. I think I can win that game,” he said, noting that he has his own on-staff tech experts working on technology plays for AmWINS.

AmWINS’ Steve DeCarlo

Referring to one insurtech in particular—Lemonade, a technology company that writes insurance and pays claims using artificial intelligence and behavioral economics—DeCarlo dismissed the claims of success as propaganda. “If I had started ‘Iced Tea’ [or] a slick-named firm instead of AmWINS,…I could go out and do propaganda. I don’t do propaganda. I do insurance and I do insurance sales.”

The only disintermediation that worries DeCarlo would come about if his wholesale brokerage firm wasn’t providing value to retail broker clients. “If I can’t solve retail brokers’ needs, they will fire me,” he said.

DeCarlo noted that small retailers cannot invest in analytics, data, processing, and they don’t have the bandwidth and technology to compete in the digital economy. “But they do trust me,” he said.

“And I think I can bring them product because Americans shop. They rarely just buy direct from one opportunity. That’s why there’s Amazon, right? People shop. I believe I’m a helper in how they shop for products.”

Marsh and Aon

What about retailers like Marsh and Aon? Are they immune from disintermediation? Herman asked Daniel Glaser, CEO of Marsh & McLennan, and Greg Case, CEO of Aon. “Conversely, given your firms’ extensive focus on technology, data analytics, are there efforts underway to partner with insurtech as the value proposition is evolving?” she added.

Glaser responded: “I hope that we’re always at the risk of disintermediation because that’s what keeps us on our toes. Any company, whether it’s an advisory firm or a capital provider, can be disintermediated unless they increase the value that they offer—and should be disintermediated if they’re not increasing the value. The determinant of that value is the client.

MMC’s Daniel Glaser

“When I came into the business in 1982, I was reading articles that were written in 1977 about disintermediation. I think there’s a fundamental threat but not a fundamental reality.”

Addressing insurtech firms directly, Glaser said he doesn’t think they’re actually “geared toward disintermediation or necessarily disruption.”

Glaser also noted that the reason for a predominant focus of insurtech on distribution is clear. “What VC [venture capital firm] would want to put their money into something that is highly capital-intensive and highly regulated? Clearly, going toward distribution—closer to the client—makes a lot of sense from my perspective.”

Aon’s Case picked up on Glaser’s remarks. “My colleague just said it here: This is about relevance, pure and simple. Of course we’re going to be investing in technology. We’ll just be more relevant, Godspeed. If investment in data analytics helps us be more relevant to our clients, we’re going to go for it. For us, this is not about the zero-sum game. It’s about a battle for relevance. If we’re not relevant—whether you call it disintermediation, whatever you want to call it—you’re going to decrease in magnitude. You’re going to decrease in scale.

Our [aim] is all about trying to change that and to make a difference with clients. Fundamentally it isn’t about insurtech. It’s literally about relevance on behalf of the clients.”

Bullish on Brokers

The S&P session began with a two-question poll of the audience of insurance financial executives and analysts, asking first whether they were bullish or bearish about prospects for insurance brokers, and then whether carriers or brokers are better positioned in the insurance value chain. Brokers won on both fronts, with nearly 71 percent of respondents saying they are bullish about broker prospects and brokers winning out over carriers, with 46 percent giving brokers the nod in the value chain and 33 percent going with carriers (21 percent were undecided).

Case took issue with the question.

“We are very optimistic about our industry—not brokers or carriers, about our industry and our industry’s ability to actually make a difference,” he said.

“The whole question of broker versus carrier for us is a little bit misdirected. For us this is and has to be about delivery for clients every day. Understanding client needs, measuring client needs, dealing with client needs—[which] in many respects…are greater than ever before.

Aon’s Greg Case

“It’s got to require greater innovation on all of our parts. We’ve got to innovate faster than our clients on the topic of risk in every way, shape or form,” he said, citing cyber insurance. According to Case, companies reported cyber losses in excess of $450 billion last year, yet the industry generated $2.5 billion in premium, much of it probably written from this panel.

“Our view is this isn’t about brokers and carriers. This is about the clients and how we serve clients in an effective way. In that regard, my gosh, there’s never been more risk out there, never been more volatility, [and] never been more opportunity for the industry to make a difference.”

Stressing the same point in response to a later question about market dynamics, Case said that Aon is focused on the demand side of the supply-demand equation and that insurance buyers are worried about many risks that the insurance industry is not addressing. In fact, referencing Aon’s bi-annual Global Risk Survey (published in April), Case noted that only half of the top 10 risks that treasurers and CFOs say are affecting their businesses are insured.

“We’ve got to innovate,” said Case. “This shouldn’t be about solving the same pie and reassessing it,” he said, referring to competition among suppliers. “It should be about increasing the size of the pie in a way our clients see it.”

Asked later about the prospect of bringing third-party capital to the table, Case opined that there’s room for more capital, highlighting more survey results. “The opportunity to serve clients on a global stage, on the topic of risk, is fundamentally unprecedented. To look at it any other way is just missing all that’s out there from the client’s view.

“We don’t even have to start with the emerging risks. Of the risks they face today, the top 50, we’re serving a fraction.” The Global Risks report shows that only a dozen of the top 50 risks impacting clients are insured.

“The opportunity to fundamentally expand how we think about helping clients understand, measure and mitigate risk is fundamental. It is unprecedented, and it’s sitting here. How we react to it as an industry is up to us, but we have to act. If we don’t, our relevance goes down; if we do, our relevance goes up.

“In that context, alternative capital is another source of opportunity. We’re matching capital with risk. In the end it’s going to help, we hope, expand the opportunities on behalf of the clients, expand the industry, and you’ve seen us take steps to try to make that happen and do that…

“It isn’t about, again, brokers and carriers. It isn’t about alternative capital and traditional capital. It’s about client needs and the opportunity to just flat out address them,” Case said.

Advisors Not Distributors

Glaser objected to Herman’s description of the panelists as “distributors” in phrasing a question about industry opportunities.

“I don’t think that’s what we do as brokers. If anything, we’re evaluators of product rather than distributors of it,” adding that he believes a lot of carriers still think of brokers as distributors of their products. “Generally I view that as inside-out thinking, as opposed to focusing on what the clients’ needs are.”

Glaser is bullish about the advisory role of brokers. Giving historical perspective about industry changes, he said, “Ten years ago capital was king. The insurance companies generally promoted themselves focusing on their capital, their rating, their financial strength, their solvency view, etc. We live in a world now with super-abundant capital, so in some ways capital as a value has reduced somewhat in our clients’ eyes. I can’t tell you the last time a client talked to us about solvency type of risk.

“On the other hand, the world has gotten much more dynamic and complex. It’s natural that the need for advice has risen,” he said, noting that this means brokers are currently better positioned along the value chain because of their proximity to clients and advisory skills. “That’s an immediate benefit. It’s not necessarily a permanent one. I would expect both brokers and insurance companies to recognize that we all serve clients, we all exist to serve clients, and our job is to increasingly provide additional value to clients. Whether that’s on risk mitigation, risk avoidance, risk management or whatever those topics are, over time I would expect insurance companies and brokers to be very much focused on the risk issues and not necessarily just on the capital insurance risk-transfer issues,” he said.



Axa and Aviva extend insurance cover for those affected by Donald Trump ‘Muslim ban’

Because of the ‘unprecedented and unforeseen’ events, Axa said it would pay out on claims even though customers not technically covered

Insurers are very rarely congratulated on their generosity when it comes to paying out on claims, but on Monday, Axa and Aviva made a unique exception.

Both said that they will pay out on claims for those affected by US President Donald Trump’s controversial refugee and immigration ban, even though those affected are not “technically covered” for this type of circumstance.

It is unclear how much the two companies might actually pay out – neither provided an estimate of the number of their customers they thought might be affected.

In a statement issued on Monday, Axa said: “In light of the sudden and unexpected decision by the Trump administration to block entry to the US for nationals from Syria, Somalia, Sudan, Iraq, Iran, Libya and Yemen, AXA Insurance UK confirms that individuals who have been denied entry as a result of the executive order, will be able to claim on their policy.

“Although not technically covered, we view the current situation as unprecedented and unforeseen and as such we are extending the cover under our policies.”

Aviva said it would extend the cover on its standard travel insurance for those unable to get assistance from their travel provider and who are in the US and need to arrange an alternative route home.

Thousands of people joined marches across Britain in protest at Mr Trump’s ban on people from Somalia, Iran, Iraq, Syria, Yemen, Iran, Libya and Sudan from entering the US for 90 days. The executive order also bans entry of those fleeing from war-torn Syria indefinitely.

Insurance is not the first industry to react publicly to the shock ban. A host of Silicon Valley tech bosses, including chief executives of Netflix, Google and Microsoft have condemned the order, expressing moral concern and saying it will hamper their ability to recruit highly-skilled employees.

On Monday, Google launched a $4m (£3.2m) crisis fund to help employees and other people affected.

Apple founder Steve Jobs was the biological son of a Syrian immigrant. In a memo to employees on Sunday, current chief executive Tim Cook said: “Apple would not exist without immigration, let alone thrive and innovate the way we do. We have reached out to the White House to explain the negative effect on our coworkers and our company.”




Swiss Re: Product recall insurance

Well respected manufacturers across Asia Pacific have been confronted with increased product recalls in recent years. Multi-billion dollar recalls involving Samsung, Toyota, Takata and Maggi Noodles, which have been highly publicised, highlight the short- and long-term financial and market capitalisation consequences to these firms. However, many manufacturers operate without recall insurance, missing out on expert consulting advice, flexible coverages and financial balance sheet protection. For example, the recent Samsung Galaxy Note 7 recall is estimated to have cost at least $5.3 billion according to some reports, yet the company is reported to have had no product recall insurance.

What is recall insurance?

Product recall insurance policies cover the expenses associated with recalling a product from the market. Typical costs would include, but are not limited to, notifying consumers, shipping costs, testing/checking, costs of disposal and the costs of replacing faulty products. In addition, recall policies will typically include provision for crisis management consultancy services, which will help corporates to prepare and better manage a recall incident and minimise potential brand damage. Such policies protect corporations from claims arising from actual or alleged defective products that can cause imminent danger of bodily injury or property damage.

Recall exposure across the supply chain

One problematic area that has been more prevalent recently, is where a company (the supplier) manufacturers a component that is incorporated into someone else’s product. If the manufacturer of the final product needs to initiate a recall because of a manufacturing error of the supplied component, the part supplier could be charged for the recall costs incurred by the end manufacturer. Such expenses would only be covered if product recall insurance had been purchased by the supplier.

For example, a packaging company discovered that there was an unintended reaction between the food and the can, leading to the food being spoilt. As a result, the canned food was recalled and the packaging manufacturer was sued for nearly US$8 million. The third-party recall costs were not covered under the product liability policy purchased by the packaging manufacturer, and the component supplier was driven into bankruptcy following litigation of this recall incident.

Top concerns of a product recall incident

From conversations with manufacturing clients, Swiss Re Corporate Solutions understands that the top concerns for boards of directors during a recall incident include:

  1. Reputation risk to brand equity
  2. Business interruption: loss of earnings and supply chain disruption
  3. Cost of disposal, replacement and reimbursement
  4. Legal costs
  5. Regulatory fines and penalties

Four key points in managing a product recall incident

Prepare a recall plan

  • Develop a comprehensive recall plan that documents how to respond to consumers, manage the incident, who should announce the recall, channels of communication, the process for contacting consumers and the use of mass media as well as social media.
  • Once the plan has been prepared, all relevant parties should become fully knowledgeable about the plan through training sessions and regular rehearsals. Cooperation with component suppliers is also necessary during stress testing.

Tracking the products

  • Manufacturers should ensure they can quickly and accurately identify the location of products, by using barcodes or batch numbers for example. Products that could pose similar or related risks should also be identified. This is also important for minimising the impact of a recall.
  • Develop product documentation to promptly identify the location of the products. This may reduce the potential event of bodily injury and/or property damage.
  • As a future precaution, it is advisable to keep samples of finished products from each batch order in case testing is required.

Response preparation

  • Prompt response to a recall is essential and can help reduce future incidents. After reaching a quick decision, the manufacturer should suggest the necessary countermeasures and make every attempt to reduce the risk.
  • Manufacturers should also ensure they are in a prepared state at all times and ready to respond to a potential recall incident.

Communication rules

  • Manufacturers should appoint an executive as the person in charge of communications channels, and centralise this system so as to eliminate as much as possible any unauthorised comments about the recall. Spokespeople should be media trained and practice their responses during stress testing.
  • Manufacturers should pay special attention to social media channels and how to effectively use these platforms to communicate quickly with consumers. This may involve setting up a rapid response hotline.

In summary

Product recall insurance coverage has gained more popularity in recent years as a result of an increased number of reported recall cases across different sectors and geographies. In order to get the most appropriate recall insurance covers, you need to work with professional insurance brokers and insurers who take the time to understand your business and risks, have a long history of helping companies protect themselves against product recalls and managing crises, and who can recommend the best solutions and coverage. The worst-case scenario for a risk manager or insurance professional is reporting to the board that a product recall is not covered or will be inadequately compensated.

Product recall myths and misconceptions

Although the investment in product recall insurance is gathering momentum across the world, there are many misconceptions that corporations have about recall and contamination policies. We explore some of the more common myths here:

Is recall coverage generally included in my product liability insurance?

Typically, product recall expenses cover will not be included in a product liability policy. Although very limited extensions can be added to policies, generally product liability insurance covers actual bodily injury and property damage. However, such limited recall extensions or endorsements will offer a narrow coverage compared to a specific stand-alone product recall insurance programme. For example, crisis management services are not offered and several cost elements such as business interruption, for example, will not be compensated.

Whereas product recall insurance reimburses necessary recall expenses and costs incurred due to an imminent or potential bodily injury and property damage.

Contaminated products insurance coverage will also typically provide access to crisis management specialists who can help assist a corporation to be better prepared for a future recall and provide expertise in areas such as recall planning, communication training and more.

Is buying recall insurance coverage always simply optional?

Product recall insurance may be specifically required in a contract between a manufacturer of final products and suppliers of raw ingredients or component parts.

Also in cases where the company has no mandatory obligation to buy such insurance, the purchase of recall insurance is generally an appropriate decision as it can also offer a competitive advantage for small to mid-sized business to demonstrate that they have evaluated their recall exposure with respective financial protection in place.

Is crisis management a necessary element?

Yes, crisis management is a vital component of product recall insurance and can support clients in their efforts to regain consumer trust and restore brand image after the recall. Many product recall insurance policies will provide easy access to professional crisis consultants, who will be able to help to define the appropriate strategy and approach for product recall preparedness, including:

  • Evaluate the exposure and where the crisis could occur
  • Building a communication infrastructure
  • Defining a comprehensive plan to manage media interaction
  • Establish a plan to manage internal and external stakeholders as well as to support the client in its efforts to minimise reputation damage

What is the appropriate insurance limit for recall coverage?

A recall can be extremely complex and there is no straight forward approach to calculate the severity of such a recall incident and finally to determine the appropriate insurance limit. Professional risk and insurance advisers will be able to help clients to evaluate their individual recall exposure, work through a number of scenarios and examples from past recalls and to support them in the decision to purchase an appropriate insurance limit.

Can a recall happen to every company?

Every organisation has the potential to experience a product recall. The media is littered with stories of product recalls, some of which have challenged the viability of companies. Statistics show that the number of recalls has risen in recent years as a result of many reasons, including globalisation, technology, platform standardisation and more complex supply chains.

As a consequence, it is paramount to invest in the best quality assurance and recall preparedness. However, it is also a matter of fact that such efforts might reduce the probability of a recall incident happening, but it will not give the company the respective guarantee that no recall incident will occur. But it is also true that companies with effective recall preparedness in place will better emerge from a recall.



Senator urges Trump to extend key Obamacare subsidies until next year, in bid to stabilize market

The chairman of the Senate’s key health committee urged President Donald Trump to continue making payments on subsidies that reduce out-of-pocket costs for low-income Obamacare plan enrollees, and urged his fellow Republican lawmakers to fund those subsidies through 2018.

“Without payment of these cost-sharing reductions Americans will be hurt,” said Senator Lamar Alexander, R-Tenn., in announcing hearings next month to come up with a short-term bipartisan plan to stabilize markets, noting that insurers have said they will have to raise premium rates up to 20 percent if the subsidies are cut.

“If the president over the next two months, and Congress over the next year, take steps to provide certainty that there will be cost-sharing subsidies, that should allow insurance companies to lower the premiums that they have projected,” said Alexander.

The Senator is proposing that Congress enact a temporary one-year stabilization funding plan by mid-September, ahead of the Sept. 27 deadline for insurers to commit to sign contracts to provide coverage on health insurance exchanges for 2018.

“It sounds a little late, doesn’t it?” said Peggy O’Kane, president of the National Committee for Quality Assurance, a non-profit health firm that works with large employers, doctors and health plans on health quality measures.

“We are at a point of tremendous urgency to get this resolved,” O’Kane said, with insurers facing deadlines to file their final rate requests over the next two weeks.

Deadline looms for CSR payment

In the meantime, the Trump administration is facing a deadline when it comes to CSRs the week of Aug. 20. That’s when the next payments to insurers are due to be made.

The president has repeatedly threatened to cut off the payments, citing a federal judge’s ruling in favor of House Republicans that said CSR funding had not been authorized by Congress. His latest threat came via Twitter in the wake of the Senate’s failed Obamacare repeal vote.

That lawsuit, originally brought against the Obama administration, has been on hold while Republicans and the White House worked on repealing Obamacare. The administration and House leaders will need to update the judge on how they want to proceed with the case within the next three weeks.

Additionally, a U.S. appeals court on Tuesday granted a motion filed by 16 attorneys general to defend the subsidy payments, Reuters reported.

Presidential advisor Kellyanne Conway said on CNN last Sunday that the president would make an announcement this week.

“It’s unclear to me if decisions have been made at the administration level about this because of hurt feelings” following last week’s vote, O’Kane said.

Price impact of CSR uncertainty

The Kaiser Family Foundation has estimated that insurers would need to raise premiums on mid-tier “silver” exchange plans nearly 20 percent for 2018, if CSRs are eliminated.

To account for the risk that the administration could pull the plug on CSRs, many states instructed insurers to submit two sets of rate requests. As a result, some states are now showing just how the Trump administration’s decision on the subsidies will directly impact premiums next year.

Covered California, the Golden State’s health exchange entity, said that if payments were stopped, exchange plan insurers would be allowed to impose a “CSR surcharge” of 12.5 percent on silver plans next year — which would result in a rate increase of up to 27 percent.

“A decision by the federal government is needed in the next few weeks,” said Peter Lee, executive director of Cover California, in a news release. “Without clear confirmation from the administration that these payments are secured, we will be forced to have health insurance companies in California add a CSR surcharge to the Silver-tier rates.”

Most exchange plan enrollees who receive tax credits may not feel the full brunt of the increases, because higher premium rates would also result in higher tax credits.

“The federal funds will simply shift to (tax credits) from CSR, and continue to support eligible individuals,” said analyst Deep Banerjee, of S&P Global ratings, in a note to research clients,. He added, those who don’t receive tax credits “will feel the full brunt of the increase, resulting in a mix of dis-enrollment and buy-downs (to cheaper plans).”

State waiver requests

States are also presenting the Trump administration with a challenge to provide funding to stabilize their markets. Last spring, amid the debate over repealing Obamacare, HHS encouraged states to apply for so-called 1332 waivers.

Minnesota is one of three states that is hoping to get approval for a reinsurance program. The state wants to use the funding to help underwrite insurers’ most expensive claims on the exchanges. If the waiver is approved, the state’s insurance commissioner says exchange rates in the state could fall as much at 40 percent for 2018.

Oklahoma and Maine have also submitted 1332 waiver requests.

Alexander is hoping that the urgency of the situation will push Congress to act on at least a temporary measure.

“We need to put out the fire in these collapsing markets wherever these markets are,” he said.