A notice and request for comment was issued for new interagency questions and answers (Q&As) regarding the acceptance of flood insurance issued by private insurers, as required by regulations implementing the Biggert-Waters Flood Insurance Reform Act of 2012.
On July 1, 2019, the Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Farm Credit Administration, and National Credit Union Administration (collectively, the Agencies) amended their regulations regarding loans in areas with special flood hazards to implement the private flood insurance provisions of the Biggert-Waters Flood Insurance Reform Act of 2012. The regulations require lending institutions to accept policies that meet the statutory definition of “private flood insurance” in the Biggert-Waters Act. Lending institutions may also exercise their discretion to accept flood insurance policies issued by private insurers and plans providing flood coverage issued by mutual aid societies that do not meet the statutory definition of “private flood insurance,” subject to certain restrictions.
The 24 proposed Q&As are “broadly applicable to supervised lenders and servicers” and provide clarity on three consolidated topics:
- The mandatory acceptance of private flood insurance;
- The circumstances where discretionary acceptance or refusal of private flood insurance is acceptable; and
- Additional general compliance issues related to regulations implementing the Biggert-Waters Act.
Comments on the proposed questions and answers must be submitted on or before May 17, 2021. Instructions for submitting written comments are available here.