The mutual property and casualty insurance industry has a verylong and substantial history. In fact, it predates the independenceof the United States and has a place among some of the firstcorporate entities formed on this continent.

As we gather in San Diego this week for the 115th annualconvention of the National Association of Mutual InsuranceCompanies, we will reflect on our history for a moment but thenturn our attention to the much more important issue of ourfuture.

If you subscribe to Peter Drucker's principle that "the purposeof business is to create and keep a customer," then you see why inour industry the mutual alignment between the insurer and thepolicyholder is so effective.

With mutuals, growth and retained earnings must be generated andmanaged with policyholder interests at the forefront, or companiescease to exist. While stock companies must achieve business successby balancing shareholder interests with the needs of theircustomers, mutuals require no such balance.

For an example of this alignment playing out, see the recentJ.D. Power or Consumer Reports rankings of auto insuranceproviders, where policyholder-owned insurers dominate the top 10.It is the result of an organizing principle that is focusedexclusively on the policyholder/customer and not compromised byinvestor value considerations.

The strength of this principle is what has allowed ourpolicyholders, companies and association to enjoy successthroughout the years.

That strength is also evidenced by continuity in the industry.Most of our member companies are more than a century old.Furthermore, of the companies operating in the United States thatare 100 years old, more than 60 percent are mutuals.

While many others have come and gone in the last century,mutuals continue on as a reliable source of protection providingpeople with peace of mind.

Mutuality is about coming together. Few crises are overcomealone–accomplishments are realized when we work together. An"everyone-for-himself" mentality does not work, especially in thiscomplex business and legal environment.

NAMIC, as an association, strives to embody the philosophy ofthe mutual model–the coming together to pursue shared objectives.We also have a long and stable history–NAMIC itself was founded 115years ago, and there have been only five presidents of theassociation in our history.

NAMIC members naturally embrace this "coming together" as anassociation. Our members share experiences, spread our message andfight for what we believe.

When we pool our passion, 1,400 companies make one very strongvoice. In fact, our membership is the most diverse of any p&ctrade association and represents the largest percentage of themarketplace.

Specifically, during the last several years we've been preparingfor the increase in political risk emanating from Washington byenhancing our resources, doubling the size of our D.C. staff, andraising our political action committee to record levels.

This effort was well timed. Initially, our industry was paintedwith the broad brush of culpability for the financial crisis.However, over time, our message–that we're fundamentally differentfrom the rest of the financial services sector, in outlook,operations and solvency practices–started to resonate.

This past summer, when President Barack Obama signed into lawthe long-debated Dodd-Frank legislation–a 2,300-page restructuringof the regulatory system of the U.S. financial servicesindustry–the bill did not focus on the p&c insurance industrybut on others in financial services. This outcome can only beunderstood as a result of our industry's efforts.

While events in Washington have occupied much of our attention,NAMIC–in collaboration with our state trade partners–has beenworking throughout the country to stave off enactment of bad lawand public policy.

In the past 12 months, our industry stopped 80 bills in 27states that would have harmed policyholders by scaling back oreliminating credit-based insurance scoring. These were hugevictories for our freedom to underwrite risk fairly andappropriately.

So called "bad-faith bills" pushed through the legislativeprocess kept us busy, and we were largely victorious here, too. Wedefeated all but two bills, and those that passed were watereddown–even in the face of a formidable trial bar opponent.

The mission that is ahead of us is no different from what wehave endured in the past. A new Congress will soon be elected.Thirty-seven states will elect governors–leading to many newlyappointed insurance regulators and new players setting policy atthe National Association of Insurance Commissioners. In addition,several state legislatures will experience significantturnover.

As these new faces enter the scene, we'll find ourselvesfighting another round of legislative and regulatory battles, somenew and some a continuation of what has gone on before.

These built-in challenges are key factors in the policymakingprocess affecting our industry. The political risks we face haveincreased in both frequency and magnitude.

We must continue to educate those in Congress, in the states andin the marketplace. The concerted efforts of NAMIC and its members,our other colleagues in the p&c trade associations, and theindustry as a whole must continue and accelerate.

Charles M. Chamness is president and chiefexecutive officer of that National Association of Mutual InsuranceCompanies in Indianapolis, Ind.