Private Flood Ins. – May lenders accept private flood insurance policies that include a compliance aid statement, but also state that "the insurer is not licensed in the state or jurisdiction in which the property is located?”

Compliance > Lending > Flood > 2019 Private Flood Insurance Rule
Q:  May lenders accept private flood insurance policies that includes a compliance aid statement, but also include a disclaimer explaining that "the insurer is not licensed in the state or jurisdiction in which the property is located," unquote, suggesting that the policy is issued by a surplus lines insurer?
 
A:  So if the policy includes a statement indicating that the insurer is not licensed in the state, therefore suggesting that the policy is from a surplus lines insurer, the agencies explained in the preamble to the rule that lenders may accept policies issued by surplus lines insurers recognized or not disapproved by the state insurance regulator for commercial properties.  Separately, lenders may accept policies issued by surplus lines insurance for noncommercial properties as policies issued by insurance companies that are "otherwise approved to engage in the business of insurance by the insurance regulator of the State or jurisdiction in which the property to be insured is located."
 
 
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
 
 

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