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Private flood insurance rule finalized
Five federal agencies, including the NCUA, have finalized an interagency rule that requires mortgage lenders to accept both private and government-backed flood insurance policies. The NCUA Board is set to hear a briefing on the rule during its meeting tomorrow.
The rule was originally proposed in fall 2016; it has an effective date of July 1. According to the release, the rule:
- implements a statutory requirement that regulated lending institutions accept private flood insurance policies that satisfy specified criteria;
- allows institutions to rely on an insurer's written assurances in a private flood insurance policy stating the criteria are met;
- clarifies that institutions may, under certain circumstances, accept private flood insurance policies that do not meet the statutory definition; and
- allows institutions to accept certain flood coverage plans provided by mutual aid societies, subject to agency approval.
NAFCU has pushed for a number of improvements to the National Flood Insurance Program (NFIP), including allowing private policies to fulfill the federal flood insurance mandate, increases in coverage limits, capping premiums and rates, and updating federal flood mapping procedures.
NAFCU will keep credit unions updated on the NCUA Board's discussion of the rule tomorrow.