Tax-exempt municipal yield curves are markedly steeper than after-tax corporate curves, with long maturity borrowing cost higher by 20%, a pattern not explained by liquidity or default. Exploiting cross-state variation, I show that households price short maturities but have little influence at long maturities; using the TCJA natural experiment—which cut P&C insurers’ muni tax advantage from ~29.8% to ~15.8%—I show that insurers price long maturities, not short ones. I develop a term-structure model with heterogeneous taxes, no shorting, and insurer ALM in which insurer entry at the long end creates an “exposure channel” that raises households’ rate-exposure sensitivity and transmits steepness back toward shorter maturities. The calibrated model matches the steeper curve, the cross-state household-tax patterns, and the TCJA-induced maturity gradient. Counterfactuals indicate that giving P&C insurers household-like tax treatment would largely eliminate the excess steepness, lowering municipal borrowing costs by about $15 billion annually.