You've also heard from Mark Delegal, representing State Farm Insurance Company. Mark pointed out that the market in Florida is in a very delicate condition. I would venture to say that it is in an even more precarious condition. The destruction caused by Hurricane Wilma has only underscored the problem, and only time will tell how the market will react to this latest catastrophe. Elaborating further, I also had the opportunity to speak briefly with Tom Wilson, president and CEO of the Allstate Corporation.

In his remarks, he said, and I paraphrase, "We will not risk our company on one hurricane. That's it, we are out of here." Now, admittedly these remarks were made in the context of all types of national catastrophes. But look at how he chose to illustrate his point. The market is indeed very delicate and if you send negative signals, you should expect the market to react negatively. The standard policy is such a signal.

Implementing a standard policy places numerous burdens on companies. For example, there is the expense of developing the policy, which is substantial. You have to develop the language, print it, and, more importantly, develop the software systems to administer it. Then there is the expense of training agents to sell the policy and in-house staff to handle it. And all of this must be done just for the Florida market, when many companies operate in all 50 states. This sends a very negative signal to the market, a market that would just like to find some stability in Florida. The hurricane risk is bad enough, but all the legislative and regulatory changes are unacceptable unless they are absolutely necessary. The standard policy is not necessary.

A similar and potentially devastating expense to the industry is the way in which the legal system will approach this new policy language. Everyone complains about policy language, but that language has in large part been placed in policies because courts have interpreted it to mean specific things, which are critical to the contract. The new language of a standard policy would give those who make their living off of suing insurance companies a whole new role of the dice. The courts would have to interpret policy provisions all over again to bring some sense of stability back to the policy. Even if the industry won every suit, the cost would be enormous.

Oh, and by the way, guess who gets to pay the cost of this new expense in the system? You got it: the Florida homeowner who is already reeling from the increased cost of the present coverage, which will continue to go up as Florida property values escalate. The consumer will not greet this new standard policy cost with enthusiasm, I can assure you.

Finally, people should know that this standard policy idea has been tried before and it was a failure. I've had the opportunity to talk to my counterparts at the Insurance Council of Texas, a state that mandated the use of a standard policy for years. Guess what happened? Texas homeowners' rates became the highest in the country and market availability dried up. This was not solely the fault of standard policies, but it was enough of a problem that the state went back to using company forms. The standard policies were expensive to administrate and were not responsive to consumers' needs. So this has been tried before in a market similar to Florida and it did not work. Can we learn from this example? Yes. Let's not make the same mistake that Texas did.

I have been pretty negative to this point, but our industry is anything but negative. We want to find solutions for our customers. So, what do we suggest?

Right now, there is a checklist being developed by the regulator with the help of the insurance industry. The checklist will help consumers understand their coverage in simple to understand terms. The industry also is working with the regulator to simplify the declaration page of the policy, the "outline of coverage." It is also working with the regulator to develop a hurricane mitigation premium savings schedule. All of these refinements are simple and quick to read. This is the way to go. I ask you, if you are a policyholder in Florida, would you want to read a checklist, or a new standard policy? This is the most reasonable solution for the good intentions of the committee and the legislature.