Charles M. Chamness | President & CEO, NAMIC
I’m an optimist, and I believe that every year brings new opportunities. As we begin 2010, our mutual segment of the industry includes the largest and the smallest, and every size in between, property/casualty insurance companies in North America. And while business has been tough in this soft market, we have inherent strengths and new opportunities for mutual insurance companies in the United States and Canada. No matter what size, whether a household name or an obscure niche player, it’s a great time to be a mutual, reciprocal, or closely held stock company.
Let’s start by naming three fundamental strengths we possess:
And speaking of communities, as the mutual insurance trade association, it is NAMIC’s job to be your community. We will do everything we can to make sure your companies thrive for years to come, whether it’s our work ensuring that mutual insurance companies have access to holding company structures under Gramm-Leach-Bliley (we do, thanks to our “community” work) or opposing efforts by the NAIC to enact SOX-based changes to the Model Audit Rule (NAMIC led the advocacy against this proposal, and our work resulted in a savings of $446 million in compliance costs for non-public companies). NAMIC has been engaged as a critical amicus party in two recent and notable lawsuits specifically addressing mutual insurance company governance issues surrounding board discretion regarding policyholder surplus and dividend declarations.
Additionally, NAMIC has provided focused and ongoing efforts that address the mutuality of our membership. In particular, we have created resources specifically designed to address mutual structure issues in governance and finance, including our Directors’ Education series; on-site board governance training and education; and CEO Roundtables and Financial Focus seminars addressing mutual issues. New efforts in executive-officer training will incorporate mutual-specific education – including mutual company simulation exercises. Our new Public Relations Workshop (launched last August) addresses “marketing mutuality” as a distinct public relations issue.
NAMIC has issued publications during the last several years that examine governance, finance, and rating issues from a mutual company perspective, including “Analysis of the Role, Function, and Impact of Rating Organizations on Mutual Insurance Companies;” “Focus on the Future: Options for the Mutual Insurance Company;” and “Report of the NAMIC Structural Strategies Task Force; Proxy Practice; and Financial Literacy.” Current work in this area includes maintenance of several resource centers, and helping to coordinate and promote a surplus notes facility for members interested in pursuing this capital option.
Coming out of the financial crisis, we have a unique opportunity to define “the mutual difference” with our policyholders and agents. People are paying attention, and they’re bringing a healthy dose of skepticism about financial institutions. Let’s redouble our efforts to show them the benefits of our “community!”