An insurance program to protect U.S. futures traders fromfinancial losses when a brokerage collapses would come at a highcost, according to a study released on Friday.

The study, commissioned last year by exchange-operator CME GroupInc (CME.O) and three industry organizations, analyzed thepotential costs and benefits of four insurance models, includinggovernment-mandated coverage. It did not make a recommendation onwhether any option should be pursued.

The industry began considering insurance after the high-profilefailures of brokerages MF Global in 2011 and Peregrine FinancialGroup in 2012 resulted in the loss of hundreds of millions ofdollars in customer money. MF Global's commodity customers havesince been paid back.

The most feasible privately run option studied seemed to be aproposal from eight insurance companies to create a captiveinsurance company that would offer coverage to futures customers ona voluntary basis, said Christopher Culp, who led the study for theconsulting firm Compass Lexecon.

As proposed, the group would initially cover up to $300 millionin claims by customers of participating brokers. The total cost ofthe program was estimated at $18 million to $27 million a year.

“The proposal is a bit restrictive and costly,” Culp toldreporters on a conference call. He declined to say how much he waspaid to run the study.

Earlier this year, a survey of more than 500 futures traders andfirms from February 28 to April 15 by the Commodity CustomerCoalition found that 91.5 percent of respondents supported thecreation of a customer-protection fund. The coalition helpedfutures customers get their money back after MF Global andPeregrine failed.

The industry-funded study found it would be “too cost-intensive”for primary insurance carriers to insure individual futurescustomers and for brokers, known as futures commission merchants(FCMs), to purchase insurance on behalf of all their clients.

A government-mandated insurance program, similar to theSecurities Investor Protection Corp (SIPC) that protects securitiesinvestors, “would be significantly under-funded to meet its initialtarget funding level,” according to the study.

The program could provide up to $250,000 to all U.S. FCMcustomers to cover losses arising from the failure of brokeragesthat are short on client funds. It would be funded by mandatorypayments from FCMs, up to a stated target funding level of $2.5billion.

However, it could take 55 years to reach the target fundinglevel, and a “government backstop” likely would be needed to closethe gap between actual funds available and potential customerliabilities, according to the study.

After Peregrine's demise, Bart Chilton, a member of the U.S.Commodity Futures Trading Commission, proposed a futures industryversion of SIPC, which covers up to $500,000 in losses to customersof bankrupt stock brokerages.

CME Group, the world's largest futures exchange operator, haspreviously said a public insurance fund would be too expensive andunfair to the biggest brokers.