Private Flood Insurance Procedures
Are the Private Flood Insurance requirements causing you headaches? If so, we can help!
Check out the Private Flood Insurance Procedures (with checklist) available now as a Free Download on our website!
These are just a guide to get you started so feel free to
take these procedures and customize them for your institution!
If you need more on these requirements, be sure to check out our New Private Flood Insurance Rules webinar that is available on-demand.
Flood Insurance Extended for 6 Months
Well that was fast! Last Friday, we alerted you that the National Flood Insurance Program (NFIP), which was set to expire on May 31st, was extended for two weeks, until June 14th. Yesterday; however, the Senate’s disaster relief plan was given the green light by the House and, once the President signs, will extend the NFIP through September 30, 2019.
Our hope is that before September the powers that be will find a longer-term solution to keeping the NFIP afloat.
Flood Insurance Extended
For those of you that keep an eye on the never-ending saga of the National Flood Insurance Program (NFIP), we have some good news, some bad news and some kind of good news.
In case you missed it, the NFIP was set to expire today (May 31st); however, yesterday the House approved an extension to fund the NFIP (good news) … for two weeks (bad news). So, they have until June 14th to come up with another plan.
The kind of good news is that the Senate does have a disaster relief package in the works which, if approved, will extend the NFIP for six months. It’s not a long-term solution but we’ll have to take what we can get.
As always, stay tuned!!
Want to know more about Flood Insurance check out – https://www.bankerscompliance.com/banking-regulations-compliance-services/reviews-2/flood/
Private Flood Insurance: Disparate Impact?
What do fair lending and disparate impact have to do with the new private flood insurance rules?
July 1, 2019, is the “go date” for the new private flood insurance requirements, which basically say that if a borrower provides the bank with a private flood insurance policy and it meets the definition of private flood insurance under the Rule, the bank is required to accept it.
Now it’s not quite that simple but you get the idea.
Since the Rule came out; however, there have been some evolutions. One of the things that keeps coming up is the issue of fair lending and disparate impact.
Within the Rule, there are two types of private policies where a bank is allowed to apply discretion with respect to whether or not they want to accept the private policy.
Listen to the video as Jerod explains more.
Since we are in the business of providing solutions, we’ve put together a last-minute webinar on the Private Flood Insurance Rules that will be held on May 29, 2019. We’ll spend 30 minutes giving you the latest and greatest information we have. We’ll look at the requirements and the evolution since the Final Rule was issued. All this in time so you have time to adjust your program/procedures if necessary.
Want to find out more about Flood Insurance? See the regulation page here. https://www.bankerscompliance.com/banking-regulations-compliance-services/reviews-2/flood/
Private Flood Insurance: Compliance Aide Statement Confusion
The industry is beginning to adapt to the New Private Flood Insurance Rules as we get closer to the July 1, 2019 mandatory compliance date. We have already discussed this new Rule in previous blogs but there is one recent development that has caused some confusion.
The new Rule mentions a Compliance Aide Statement that lenders may rely on when they are looking at a private policy. Specifically, if a private policy contains the statement, a lender may accept the policy.
We’ve recently seen a few private flood policies that include the Compliance Aide Statement but it is followed by a disclaimer stating that “the insurer is not licensed in the state or jurisdiction in which the property is located”. The Rule also requires that private policies can only be accepted from licensed insurers!
So, what gives?
In some cases, it appears that the “unlicensed insurer” is actually working with a local insurance agent or broker who IS licensed in the state. There is also flexibility with policies issued by “surplus lines insurers”. These are usually a large insurance company (like Lloyd’s of London, for example) that insure areas that a regular insurance company will not. The key is to have a surplus lines insurer that is “not disapproved” by the insurance regulator.
In short, if you see such a disclaimer, don’t panic. The Compliance Aide Statement was designed to make it easier to evaluate the policy and you can rely upon it.
We will be addressing this issue and much, much more regarding private insurance in our “New Private Flood Insurance Rules” webinar on May 29th!
Want to know more about Flood? https://www.bankerscompliance.com/banking-regulations-compliance-services/reviews-2/flood/