Agencies issue final rules giving FIs more flexibility in flood insurance acceptance
January 29, 2019 / Source: Regulatory Report
Agencies issue final rules giving FIs more flexibility in flood insurance acceptance
January 29, 2019 FDIC, NCUA, OCC, The Fed 0
Final rules requiring financial institutions to accept flood insurance policies that meet the statutory definition of “private flood insurance” – and to allow financial institutions to exercise their own discretion in accepting other plans, including those by mutual aid societies – were made final Tuesday by federal banking and credit union regulators.
The rules represent amendments to current regulations of the agencies which implement the private flood insurance provisions of the Biggert-Waters Flood Insurance Reform Act of 2012. The rules were released jointly by the National Credit Union Administration (NCUA), the Federal Reserve, the Federal Deposit Insurance Corp. (FDIC) and the Office of the Comptroller of the Currency (OCC). The Farm Credit Administration (FCA) also issued the final rule. The rules affect loans in areas having special flood hazards.
“Specifically, the final rule requires regulated lending institutions to accept policies that meet the statutory definition of ‘private flood insurance’ in the Biggert- Waters Act,” the summary of the final rule states. It also notes that the final rule “permits regulated lending institutions to 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 final rule takes effect July 1.