WASHINGTON–Two freshman members of Congress today introduced legislation that would allow for high-risk states to pool their catastrophic risk resources and make use of the private market.

Reps. Ron Klein, D-Fla., and Tim Mahoney, D-Fla., introduced the legislation to help stabilize the catastrophic insurance market without adding to taxpayers' burden. The bill, known as the Homeowners Defense Act of 2007, has the support of 35 members of Congress, representing 20 states, they said.

Under the proposed legislation, states would be allowed to pool their catastrophic risk together, and then transfer it to the private market through the use of catastrophe bonds or the purchase of reinsurance. Additionally, the bill would establish a National Homeowners Insurance Stabilization Program to provide low-interest federal loans to states impacted by severe natural disasters.