An analysis of the recent and historical impairment activity over the last 30 years for major sectors of the financial services industry demonstrates clearly that the p&c industry has a consistent and low historic impairment rate that is uncorrelated with larger economic downturns.

Other financial sectors have shown tremendous variance, with spikes in impairments going hand-in-hand with recessions.

The life and health insurance business registered nearly 4 percent in impairments during the 1990-91 recession, while banks approached 10 percent in 2008.

But the most marked spikes, historically, have been among thrifts, which hit 4 percent by the end of the 1980-82 recession, shot past 12 percent in 1991, and zoomed off the chart in 2008 to 31.2 percent.

Conversely, the percentage of industry impairments since 1980 in the p&c insurance sector has never risen above 1.5 percent, and has been consistently close to zero since 2004–even during the current down cycle.

In dollar terms, the phenomenon is similar.

o Total assets of impaired life and health firms spiked at nearly $7.5 billion in 1991.

o The total assets of impaired banks hit the $7.5 billion mark in the early days of the 1980-81 recession, then spiked dramatically in 2008 to $56 billion.

o Thrifts once again had the most dramatic spikes, with impairments representing $17.5 billion in total assets during the 2001-03 recession, then shooting off the chart in 2008 to $62 billion.

o In stark contrast, the p&c insurance sector has been nearly at zero in the dollar value of industry impairments since 2004.

Facts are facts. While some industry sectors do have periodic failure spikes correlated with–and exacerbating–economic down cycles, p&c insurance is simply not systemically risky.

When it comes to weathering the existing economic crisis, p&c insurers, like every other industry, were hit hard and suffered a decline in net income.

But they did remain profitable in 2008 and finished the year with more than a trillion dollars available to pay claims, which is a remarkable testament to the industry's risk management and business practices.

The difference in performance between our business and other financial services industries demonstrates that the current downturn did not originate with the traditional p&c insurance sector. While things have gone wrong elsewhere, clearly something is going right on the p&c side.

As such, we would suggest systemically risky activities should bear the costs of their own risk, rather than spreading risks originating from highly leveraged activities to the p&c sector, which has consistently demonstrated good fiscal health.

If derivatives activities such as credit default swaps can create systemic problems requiring government bailouts, then those costs should be factored into those products. This solution would induce industries engaged in such activities and their regulators to seek the optimal balance between risk leveraging and solvency protection.

However, forcing heavily regulated, stable industries to cross-subsidize risky products would only increase market distortion and moral hazards.

The data does not support proposals to take an industry that has proven its stability through the worst financial crisis in generations and subject it to a duplicative federal system that oversaw the current collapse.

While the Property Casualty Insurers Association of America supports creating a systemic risk overseer to monitor and flag risky activities from non-insurance holding company parents, it would be inappropriate and unhelpful for a regulator to interfere in the activities of the insurance affiliates that are healthy and already subject to robust prudential regulation.

Insurers are subject to stringent capital and surplus requirements that are in place to ensure that they can meet their obligations to policyholders.

Any federal systemic risk oversight should also consider that the impact of insolvencies in the insurance industry is mitigated significantly by the existing insurance guaranty fund system. Consumers are protected as every state, and the District of Columbia, has a guaranty fund that pays consumer insurance claims if their carrier becomes insolvent.

The best solution to the current crisis is simply to target reforms where they are needed, which is why PCI supports the creation of a systemic risk overseer to alert regulators to looming hazards.

But the historical numbers clearly show that the p&c industry does not present a systemic risk. We should always seek solutions to our problems, but we should never try to solve problems that do not exist.

David A. Sampson is president and CEO of the Property Casualty Insurers Association of America in Des Plaines, Ill. Mr. Sampson was formerly deputy secretary of the U.S. Department of Commerce under President George W. Bush.