Q: May a lender reject a private flood insurance policy satisfying the Biggert-Waters definition of private flood insurance for safety and soundness, or for other reasons?
A: Under the statute and regulation, a lender must accept the private flood policy if the policy meets the definition of private flood insurance. As the agencies noted in the preamble to the final rule, the private flood insurance definition already contains criteria that address safety and soundness, such as the requirements for the insurance company to be licensed, admitted, or otherwise approved to engage in the business of insurance by a State regulator.
This Q&A was part of the discussion in the Outlook Live – 2019 Interagency Flood Insurance Update on Private Flood Insurance Rule webinar held on 6/18/19 and focused on the new private flood insurance rules that become effective 7/1/19. Information may be found here: https://www.webcaster4.com/Webcast/Page/577/30085