Regulators schedule webinar on new flood insurance coverage rule, which takes effect July 1

A webinar focusing on the interagency final rule on private flood insurance issued in February, and which goes into effect July 1, is scheduled June 18 by the federal insurer of bank deposits; the event is free but registration is required.

The Federal Deposit Insurance Corp. (FDIC) said the one-hour webinar (from 2-3 p.m.) will include discussions about:

  • Mandatory acceptance of private flood insurance;
  • Compliance aid for mandatory acceptance;
  • Discretionary acceptance of private flood insurance;
  • Flood coverage provided by mutual aid societies; and
  • Preparations to comply with the Rule.

The final rule issued in February requires lenders to accept flood insurance policy coverage meeting the statutory definition of “private flood insurance,” including those provided by private insurers that do not meet the statutory definition if the coverage meets certain conditions. It also permits institutions to accept certain flood coverage issued by mutual aid societies.

The final, interagency rule was adopted by the four federal bank and credit union regulators to implement provisions of the Biggert-Waters Flood Insurance Reform Act of 2012. All four regulators, including also the Federal Reserve Board, Federal Deposit Insurance Corp. (FDIC), and National Credit Union Administration (NCUA), had finalized the rule by Feb. 12.

The final rule requires lenders to accept “private flood insurance,” as defined in the Biggert-Waters Act, to satisfy the requirement that flood insurance be purchased in connection with loans secured by buildings or mobile homes located in special flood hazard areas for which flood insurance is available under the National Flood Insurance Program (NFIP). It includes a “compliance aid” provision to help lenders determine whether a flood insurance policy meets the Biggert-Waters Act definition of “private flood insurance.”

Staff from the FDIC, Office of the Comptroller of the Currency (OCC), Federal Reserve System, National Credit Union Administration (NCUA), and Farm Credit Administration will be on hand for the discussion.

Banker Teleconference Series: Private Flood Insurance Rule

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