My name is Melinda Ballard and I run a nonprofit association of homeowners called Policyholders of America or "POA". Since we founded POA six months ago, we have 18,763 American families in our membership. Texas is the state most represented in our membership (approximately 6,500 Texas families are members). That is largely because Texas is where we call home and where rate abuse is most out of control.

Our members range from welfare families to some of the most affluent in America. We're almost equally split between Republicans and Democrats.

As you know, 95% of the insurance companies selling homeowners insurance here are unregulated. No one could have predicted that insurers would have used the Texas legislators as conduits for rate abuse simply by directing business through off shore Lloyds or county mutual companies.

In a sense, they did us all a favor. Texans now have undisputable evidence of the rate chaos that occurs when insurers are unregulated. Irrespective of this proof, insurers are asking you to fall for it again. They say that the market will stabilize if you impose fewer restrictions.

Please listen to your constituents who can no longer afford the American dream of homeownership because they cannot afford the premiums or because major insurers are refusing to write coverage on homes having previous water damage.

If the insurance industry in Texas was to operate fairly, rates would be commensurate with coverage. When coverage is lessened, as it was after Commissioner Montemayor's recent order limiting mold repair requirements, homeowners premiums should go down. Unfortunately, after the Commissioner's order, rates soared. The Texas homeowner is paying for a loaf of bread but getting one slice. And, Texans are still paying the highest rates in the nation.

If insurers refuse to write homeowners policies in Texas, they should stop selling their more profitable lines - auto, health, life -- in Texas. These carriers should not cherry pick at the expense of the average Texan.

POA further asks that you impose immediate rate regulations and a "stay" on all coverage until a federal Bill has a chance to make its way through Congress. HR 5040 establishes a FEMA-like pool for toxic mold clean ups that would mimic flood insurance. The reason why this federal Bill was introduced is because insurers have capped, limited or excluded mold clean up costs, even if mold is a consequence of a covered peril. In a nut shell, the Bill takes the responsibility of toxic mold clean up off of the private carriers and puts it on FEMA, if and only if the homeowner elects to purchase the coverage.

Some view this Bill as an insurance bail out. I can promise you that we've seen enough insurance committed fraud and bad faith that we are not advocating an insurance bail out. We view the federal Bill as the only mechanism available for homeowners (if they opt to purchase it) to secure coverage for this, potentially, catastrophic loss.

But what's of even greater import to the average Texan is that this federal Bill gives Texas legislators an opportunity to be heroes. You will be able to mandate that rates are reduced to reflect the new coverage. If insurance companies no longer have to cover mold clean up, then rates should be dropped by 60% or more.

Kindly keep the current rate crisis in mind and the fact that 95% of the insurers operating in Texas HAVE been given a chance to demonstrate the benefits of a free market system by escaping regulation. They failed miserably. They demonstrated nothing but rate abuse. Your constituents are asking you to step in and get these companies to act responsibly. Unfortunately, that means more regulation as voluntary compliance has not and never will be a reality.

Our association has been asked to speak this Thursday before the House Committee on Financial Services in Washington, DC on this topic. I would not have been one of only a handful of people invited if our nation's eyes were not on Texas. Let's do the right thing for the people of Texas and be a shining example of what TO DO, not what NOT to do. Thank you for listening and for this opportunity.