The five federal agencies charged with implementing flood regulations (FDIC, OCC, FRB, NCUA, and Farm Credit Administration – collectively, Agencies) issued a joint proposed rule to implement private flood insurance provisions of the Biggert-Waters Act of 2012 (Act). The Act requires regulated lending institutions to accept private flood insurance policies if they meet the requirements of the Act. The proposed rule was published in the Federal Register on November 7th. The Agencies are soliciting comments to the proposed rule, which are due no later than January 6, 2017.
The Agencies newly proposed regulations are based upon comments the Agencies received to their October 2013 proposed regulations. Based on comments received, the Agencies addressed the following topics:
- Regulatory definition of “private flood insurance” and “at least as broad as” terms
- Use of a regulatory safe harbor to facilitate compliance
- Whether policies that do not conform to the statutory definition of “private flood insurance” should be accepted
- Whether alternative criteria for non-conforming policies should be developed by the Agencies
- Whether regulated lenders should be permitted to accept policies from mutual aid societies
PFI has prepared a detailed outline which can be accessed here for your convenience.
A copy of the proposed regulations can be found here.
PFI will continue to monitor this topic and provide updates as they develop.