Q: If a policy includes the compliance aid assurance clause language, does a lender need to conduct additional review of the policy for compliance with the definition of private flood insurance? Is a lender required to accept a policy that includes the compliance aid statement?
A: The answer would be no to this question. The regulation provides that if a policy or an endorsement to the policy contains the compliance aid assurance clause language, no further review is necessary in order for the lender to accept the policy. However, a lender is not required to accept a policy solely because the policy contains the compliance aid assurance clause if the lender determines the policy actually does not meet the mandatory acceptance requirement.
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