Agencies confirm updated flood insurance Q&As are guidance

May 19, 2022

Federal regulators issued revised questions and answers regarding federal flood insurance law and the agencies’ implementing regulations.

Details: The new Q&As replace previously issued versions and reflect significant changes to federal flood insurance requirements in recent years. They cover topics including escrowing premiums, the purchase requirement’s detached-structure exemption, force-placement procedures, and private flood insurance.

ICBA Comments: In a joint letter last year, ICBA and other groups said the final document should affirm that lenders and servicers should not be cited for failures to adhere to the Q&As. The final version acknowledges those comments and says the Q&As are guidance and failure to comply is not grounds for any adverse supervisory action.

Background: The agencies previously issued a joint final rule to implement the provisions of the Biggert-Waters Flood Insurance Reform Act of 2012 that require regulated institutions to accept certain private flood insurance policies, when previously they were only required to accept National Flood Insurance Program policies. That rule took effect in July 2019.