In his remarks, he discussed the trial over the World Trade Center claim dispute concerning whether its destruction by terrorists constituted one or two covered incidents under the policies that were issued.

He was critical of the insurers for not having agreed upon wording of the policies before putting the contracts in place, noting that the entire incident casts doubt on contract certainty.

"In which other industry would so-called sophisticated parties find this acceptable?" Mr. Levene asked. "It seems totally ridiculous that this wording should not have been there. And you might wonder what harm this is doing to the reputation of our industry."

He added that it is "absolutely idiotic" that an insurance transaction can be completed without the contract in place, and that no other industry completes a transaction in a similar fashion.

He went on to talk about the scrutiny the commercial insurance industry is now under because of New York Attorney General Eliot Spitzer's probe of contingency fees and other facets of the financial services industry.

"The financial services industry as a whole has already been left with a tarnished image in the minds of consumers, regulators and commentators," said Mr. Levene.

He said the investigations show that, on the issue of transparency, the industry has some significant catching up to do to meet the expectations "of what a 21st century business" should be, adding, "We can't ignore this any longer."

He said the keys to the solution are greater transparency and disclosure of the insurance transaction process, and better communication with those outside of the industry.

"The good news is that there appears to be an awakening across the top levels of our industry that things have got to change," he continued.

He said the industry must make clear to the policyholder what is being done for them and what precisely the terms of the agreements are. He called on the industry to craft rules that will clarify transparency and contract certainty, adding that additional regulation from outside would only be a burden.

He said Lloyd's is taking a lead in developing rules, in conjunction with its U.K. regulator, to solve questions of contract certainty while at the same time enhancing transparency and working to improve communication with those outside of the industry.

"More time communicating and building relationships with policyholders and economic leaders in the first place means a lot less time firefighting a bit later on," he observed.

Mr. Levene also addressed the industry's challenges dealing with risk management and the current market cycle.

He said insures must work to manage cycle swings for the health of the industry. Lloyd's, in an effort to do that, has cut capacity 9 percent. It is also practicing disciplined underwriting, with its review boards rejecting undisciplined contracts.

"Good cycle management is critical to our future success," he remarked.

In the area of risk, he was critical of the growing litigiousness the industry is seeing throughout the world, sarcastically calling it "a fantastic export [the U.S. created]."

Lloyd's is very concerned about U.S. litigation because the nation is a significant market for the syndicate, he said.

Despite the signing of the tort reform act recently in the U.S., Mr. Levene said litigation problems are worsening in some states and some lines, especially in the area of medical malpractice. The situation is stifling innovation and, he added, more reforms in other areas of the system are needed.

One of the most significant problems, he noted, is that the bulk of the awards go to the attorneys, with the injured party receiving less than a quarter of the award.

"The U.S. tort culture has become inefficient, inconsistent and inequitable," he said. "Any drive to reform it needs to address these flaws."

"It is wrong to reduce this to a political issue," he continued. "It is a burden on the whole economy. It stifles innovation on risk and it stifles risk-taking everywhere from the family business to the public sector. It is a subject we should do more to adopt a united front on and lobby more effectively for change."