SmarterSafer.org contended that the costs could be significantly greater, and that the bill would not be paid for by cutting other programs, "but simply added to the growing deficit."

The group's members include the Reinsurance Association of America, Association of Bermuda Insurers and Reinsurers, National Association of Mutual Insurance Companies, National Association of Professional Insurance Agents, Allianz of America, Chubb, Liberty Mutual Group, Swiss Re and USAA.

H.R. 2555 has existed in various forms for several years. Some in the industry support it, while others oppose. Primarily, the bill looks to create a federal backstop for state catastrophe funds, and federal loans if state funds are tapped following a major event.

The group–along with other opponents–calls the legislation the "Beach House Bailout Bill." The federal assistance is not aimed at helping the middle class but instead targets mostly Florida properties worth $2 million or more, the group alleged.

In its letter, SmarterSafer.org cites an unnamed independent study that found the cost to be more than $200 million.

The federal backstop proposal would displace the private market, essentially making the federal government an insurer of natural catastrophe risk, SmarterSafer.org writes.

"This will result in significant taxpayer funds being used to take over a large segment of the private insurance market," reads the letter. The legislation, if passed, would encourage development in unsafe, risky areas, the group said.