Your "Compliance people" are correct in that the Flood Book
(pg 55) says, "If at any time during the term of a covered loan, the lender or servicer determines that the building securing the loan is not covered by flood insurance,...the lender or servicer must first notify the borrower of the need to carry adequate flood insurance coverage."
On day 1 after the expiration date, if you're aware the insurance has not been renewed, you need to notify your borrower. Keep in mind, your 45-day countdown can't begin UNTIL you've notified the borrower. So, if you're waiting 'til day 10, not only have you failed to notify them in a timely manner, you've also extended the time-frame for the borrower to obtain insurance at their
expense and increased the amount of your
expense to protect the collateral.