Q: May a lender rely on an assurance clause that has language that's similar to, but is not exactly the same as the compliance aid assurance clause language in the regulation?
A: In order for the lender to rely on the compliance aid assurance clause without further review of the policy, the assurance clause must be stated in the policy exactly as set forth in the regulation. If the language in the policy is different from the compliance aid assurance clause set forth in the regulation, the lender should not rely on the assurance clause in the policy and should review the policy to determine if it meets the definition of private flood insurance.
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