View this article online: https://www.insurancejournal.com/blogs/research-trends/2019/06/19/529872.htm
The big day is coming! I suspect by now, you’ve heard a great deal about the implementation of 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.
What happens on July 1st?
This year’s 2019 Private Flood Report includes comments from compliance consultants to the banking industry, who are working with their clients to educate lenders and compliance officers in advance of the enforcement of this Act (which can cost a institution $2,000 per policy, no cap, for non-compliance).
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.”
What can you do? Network with your lenders and inform them of the change, and make them comfortable with your offering. Discuss approval processes and find out if additional review time is required by banks, in order to avoid delays on loan closings.
Finally, what can you expect from the 2019 Private Flood Report?
Check out all of our hurricane resources on Research & Trends in preparation for the season. As it is now upon us, may our coastlines be safe and our homeowners and businesses be protected.
Happy reading – Pam Simpson