Major Announcement about Private Flood Insurance
A Major announcement for Flood Insurance!
There is big implementations in the provisions of the Biggert-Waters Flood Insurance Reform Act of 2012, requiring regulated institutions to accept certain private flood insurance policies in addition to National Flood Insurance Program policies.
So what happened on July 1st?
Regulated lending institutions will be required accept private flood insurance policies that satisfy criteria specified in the Act; Institutions can rely on an insurer’s written assurances in a private flood insurance policy stating the criteria are met; Institutions may, under certain conditions, accept private flood insurance policies that do not meet the Biggert-Waters Act criteria; and Institutions can accept certain flood coverage plans provided by mutual aid societies, subject to agency approval.
There are concerns that too much responsibility will be placed upon lenders to make determinations, with recommendations that agents educate their local marketplace on their offering to reduce friction around the new process. Further, they urge that all policies that do meet the criteria, carry the Compliance Aid Statement, to assure institutions that the criteria has been met.
If you haven’t seen it yet? It simply reads:
“This policy meets the definition of private flood insurance contained in 42 U.S.C. 4012a(b)(7) and the corresponding regulation.”