WASHINGTON—-Democratic presidential candidate Barack Obamaoffered his support to a proposed national catastrophe fund,provided it does not also encourage risky development.

“I think that we need a national catastrophe fund,” Sen. Obamasaid in an interview with the Palm Beach Post. “The key is to makesure that it's run efficiently, that it's adequately funded, andthat we build in smart incentives to assure that developers aremitigating risk when they're making decisions on where to locatehomes or businesses.”

Sen. Obama referred to legislation passed by the House toimplement a national catastrophe fund as a “good start.” Thelegislation, the Homeowners Defense Act, or HR 3355, is currentlyawaiting action by the Senate Banking Committee.

He added that there are “a number of ways” to encouragedevelopers to mitigate their risks as much as possible, and that“the key is to make sure you're not setting up a fund wheredevelopers don't have to have any regard as to whether they'rebuilding in a flood plain or whether they're creating more riskysituations.”

The national catastrophe fund is one seen as favorable toFloridians, and the legislation passed by the House was sponsoredby two Florida representatives. Sen. Obama compared the situationfacing homeowners in the sunshine state to those living in otherparts of the country.

“The bottom line for the residents of Florida is they needprotection in the same way that people in the Midwest needprotection from tornadoes or other natural disasters,” he said.“And I think its important for us to make sure the federalgovernment is playing a role as a backstop in that process.”

Edward Collins, national director of Protectingamerica.org, agroup lobby for the national catastrophe fund concept, hailed Sen.Obama's support for the proposal.

“There is urgency as we are reminded by the recent forecast thatmajor catastrophes are, unfortunately, inevitable,” he said.“Fortunately, however, a growing number of leaders are calling forreforms. Senator Obama rightfully realizes that catastrophepreparation and protection must be a nationwide priority and thataction should be taken immediately, before the next catastrophestrikes.”

ProtectingAmerica.org has called for a national catastrophe fundto be established as a backstop for state guaranty pools and fundedusing mandatory contributions from insurance companies.

Opponents of the concept have argued that the bill wouldeffectively force homeowners in low-risk areas to subsidize thosein coastal regions prone to hurricanes and other storms.

During the House debate on the legislation, Rep. ShelleyMoore-Capito, R-W.Va., said the bill “could put the taxpayers atrisk for bailing out” state insurance pools, pointing to Florida'sstate-run Citizens Property Insurance Corp. as an example.