WASHINGTON--A coalition opposing legislation that would create anational risk pool for natural catastrophes said it has done ananalysis showing the measure would create massive new taxpayerliabilities.

The study commissioned by Americans for Smart NaturalCatastrophe Policy, which is partially funded by insurance andreinsurance interests, lists estimates of what its said would bethe burdens on individual states.

Its cost study was done on the "Homeowners Defense Act of 2007,"H.R. 3355, whose supporters envision a federal pool as a method ofcombating high homeowners' insurance in hurricane-prone areas.

In addition, it evaluated the House version of legislationreauthorizing the National Flood Insurance Program. That measure(H.R. 3121) would add wind insurance to the flood program.

But the Senate version of the bill, passed in May with the samenumber, does not contain the provision.

The Homeowners Defense Act would allow states to poolcatastrophe risks and then transfer them to the private marketthrough the sale of catastrophe bonds or purchase ofreinsurance.

That bill also came under fire from presumptive Republicanpresidential candidate Sen. John McCain, R-Ariz., earlier thisweek. He said that while he sympathizes with homeowners battered bysoaring insurance costs, he was not prepared to endorse a nationalrisk pool as a way to bring those prices down.

Instead, Sen. McCain said, states threatened by the stormsshould form regional alliances to protect themselves.

The study released today was prepared by Robert J. Shapiro, whoserved as under secretary of commerce for economic affairs in theClinton administration, and Aparna Mathur, a research fellow at theAmerican Enterprise Institute.

Taxpayers in 20 states would be hit particularly hard bymultibillion-dollar burdens under the legislation, theShapiro-Mathur economic study found.

Specifically, the study said, the cost would be $19 billion forCalifornians; $11 billion for New Yorkers; $7 billion for Illinoisresidents; $6 billion for Pennsylvanians and taxpayers in NewJersey; $5 billion for those in Ohio; $4 billion each for taxpayersin Massachusetts, Michigan and Virginia.

It estimated the cost as at least $3 billion for taxpayers inConnecticut, Indiana, Maryland, Minnesota, North Carolina andWashington.

The new economic study projected that enactment of H.R. 3355 oradding wind coverage to the NFIP would add these costs to thetaxpayer even though it said private insurance and reinsurancearrangements already in place have worked well.

The Shapiro/Mathur study argued that enactment of either bill"would displace private capital deployed in insurance andreinsurance companies and, in its place, force enormous financialtransfers from taxpayers in most states to some businesses andresidents of Gulf states, especially in Florida."

Eli Lehrer, a senior fellow at the Competitive EnterpriseInstitute, another member organization of Americans for SmartNatural Catastrophe Policy, argued in reaction to the new studythat, "We shouldn't displace productive private insurance andreinsurance industries with expensive, unworkable governmentprograms."

Mr. Lehrer said, "The House and Senate conferees on the NationalFlood Insurance Program should take a very careful look at thisgroundbreaking study. Above all else, we need to create aninsurance environment that preserves the environment and encouragessafe, effective building.

"A national catastrophe policy commission could play animportant role pointing the way toward a better system for managingcatastrophes," he added.

The issue of some sort of government backstop arrangement fornatural catastrophes is one which has split the industry with somecarriers such as Allstate behind the ProtectingAmerica.orgorganization, which supports the concept.