The National Association of Mutual Insurance Companies is the largest and most  diverse national property/casualty insurance trade and political advocacy  association in the United States.  

 “We are a full-service trade association for property casualty insurance  companies,” says Paul Tetrault, NAMIC’s state affairs manager for the Northeast Region. “Our mission is to serve our member companies and one of our primary things is  advocacy, working on legislation and regulation on both the state and federal  level.”  

 NAMIC’s 1,400 member companies write all lines of property/casualty insurance business  and include small, single-state, regional, and national carriers accounting for  half of the automobile/ homeowners market and nearly a third of the business  insurance market.  

 A Look Back

 The National Association of Mutual Insurance Companies was founded in 1895 by a  group of farmers in Iowa who first had formed their own mutual insurance  companies for the purpose of creating better insurance coverage for their farms  at lower prices.  

 “From there they decided a national association of mutual insurance companies  would help promote and build the mutual model,” says Brent Bahler, vice president of public affairs for NAMIC. “The great-grandson of one of those founders still runs the farm mutual company  in Iowa, and is active in the association established by his great-grandfather.”  

 Through the years, mutual insurance companies were formed to offer better  coverage at lower costs to drivers, homeowners, professional groups such as  doctors, jewelers, even lumbermen.  

 Mutual vs. Non-Mutual

 There are several major differences between mutual insurance companies and  non-mutual insurance companies, and it’s important that people understand mutual insurance and its benefits, the  organization’s spokesmen say.  

 These include the fact that your premium dollars typically stay local, that as a  mutual policyholder you can have a say in the affairs of your insurance  company, that the cost of insurance provided by a mutual company is as  competitive—if not more so—as insurance from a global stock insurance company, and that the level of  personal service you get from a mutual insurance company is as good as it gets.    

 “First, in the technical sense, mutual companies are ‘owned’ by their policyholders, who have a vote in electing the company’s board of directors and therefore in the general conduct of the business,” Bahler says. “Non-mutual insurance companies, typically referred to as ‘stock companies,’ are owned by stock holders. Where that difference is most profound is in the  commitment to the policyholder. Mutual companies serve the interests of their  member-policyholders first and foremost, whereas stock companies first serve  the interests of the shareholders, sometimes as the expense of the  policyholders.”  

 There is no precise data on how many property/casualty insurance companies are  mutual and how many are stockholder owned, but NAMIC’s 1,400 members serve more than 135 million member-policyholders.  

 “Our companies write 52 percent of all automobile insurance in the country, 43  percent of all homeowners insurance, and 30 percent of all commercial  insurance,” Bahler says. “Altogether, that’s more than $177 billion worth of insurance.”  

 Local Issues

 For those in New England, issues currently taking priority are modernizing  antiquated statutes on the books and modernizing ratings. NAMIC also remains in  favor of state-based insurance regulation being maintained.  

 “A perennial issue we work on is something called underwriting freedom, and one  of the big sub-issues for that is the use of credit-based insurance scores,” Tetrault says. “It’s something that was once controversial, but it shouldn’t be because it’s been studied to death and found to be beneficial to consumers.”  

 Advocacy Issues

 The day-to-day business of insurance is regulated at the state level, so much of  NAMIC’s advocacy occurs in the state capitals.  

 “A few of the big issues we’ve taken on this year have included so-called ‘crash tax’ proposals, the use of credit-based insurance scores as one of many factors to  determine a prospective policyholder’s potential risk,” Bahler says, “and the push for more effective building codes that can help mitigate the damage  and deaths caused by natural disasters.”  

 The “crash tax” is a scheme proposed by some local governments caught in a budget squeeze to  collect fees from insurance companies and their policyholders to pay for  expenses incurred by police and fire department personnel who respond to  automobile crashes.  

 “We oppose these accident response fees because they are a form of double  taxation imposed on drivers who already pay for public safety services as part  of their property taxes,” Bahler says. “Also, in most instances these fees are applied only to responsible drivers who  have auto insurance. No municipalities have payment provisions for drivers who  do not have insurance to pay for this service.”  

 NAMIC also opposes efforts to provide costly federal support for state-sponsored  insurance programs, which encourage states to create risky catastrophe plans  similar to the one in Florida.  

 “The continuing concentration of the country’s population in areas vulnerable to natural disasters poses significant  challenges for policymakers, property owners, mortgage lenders, and insurers,” Bahler says. “We support a variety of legislative initiatives such as strong, statewide  building codes and responsible land-use planning, to help greatly reduce the  level of property damage and human suffering caused by natural disasters.”  

 Of the hot property-related insurance issues, the building code issue is  probably the most important one facing property owners today.  

 The Louisiana State University Hurricane Center, for instance, estimated that of  the $10 billion in wind damage to homes in Louisiana as a result of Hurricane  Katrina, modern building codes would have spared 80 percent of the damage.  

 “Simply put, stronger, safer buildings for Americans and their families can save  lives and reduce loss, thereby reducing the need for public disaster aid. We  support congressional action to encourage the adoption and enforcement of a  strong building code,” Bahler says. “NAMIC and the Building Code Coalition (BCC) support the creation of a separate  financial incentive for states that have adopted and enforce statewide building  codes. We think that legislation promising greater post-event aid for those  states with strong building codes can serve as a powerful incentive to state  governments.”  

 Future Challenges

 Looking ahead, NAMIC understands that challenges await, as the insurance  industry in general confronts consolidation, increased government scrutiny and  an economy that is still trying to find its way out of a long recession.  

 “Insurers are in the risk management business, so it’s something we know well. So I’m confident that NAMIC and the companies we serve share a future that is sound  and secure,” Bahler says. “It certainly helps that mutual insurance companies don’t have to decide between serving their member-policyholders or stockholders only  interested in the near-term. We know whose side we’re on, and we know we have their support to make the right decisions.”    

 Keith Loria is a freelance writer and a frequent contributor to New England  Condominium.