But in the past year, NAMIC has been very pleased to be able to help offer "some very creative and effective new ways to raise capital through surplus-notes transactions," Mr. Chamness said.

In past years, surplus notes only had a limited ability to assist mutual companies on their balance sheet, he commented. "But there have been significant developments in the past year, and NAMIC now has partnerships with companies that are offering new surplus notes programs that can be securitized," Mr. Chamness said.

"So now, larger offerings can be made where many mutuals are included, and they can all benefit through surplus notes transactions," he observed. "It really is a significant development for the mutual insurance world because it's a much more efficient way of offering surplus notes compared to what was available in the past. It's very low-cost and long-term."

An increasing number of mutual companies are taking part in this ongoing transition from the old type of surplus notes programs to the newer type of securitized programs that offer much greater capacity and capital on better terms, Mr. Chamness pointed out.

Mr. Chamness also advised that a company would still need a strong balance sheet to take advantage of this emerging opportunity. "It is not a last-chance capital--this is capital that's available to companies that have strong business and business plans for the future with strategic goals and needs."