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#1613749 - 10/07/11 03:08 PM Increases in RCV
AuditorK Offline
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Joined: Feb 2003
Posts: 962
PA
As we receive renewals for hazard insurance coverage, and the RCV increases over time so hazard insurance coverage amounts increase, do we need to also go back to the customer and require an increase in flood coverage to coincide? Or are we okay if at inception we had enough flood insurance to cover the RCV, even though now our coverage is below RCV?

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Flood Compliance
#1613842 - 10/07/11 04:58 PM Re: Increases in RCV AuditorK
CRA Padawan Offline
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Joined: Oct 2008
Posts: 144
Iowa
My understanding is that the flood insurance would need to increase as well.

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#1613904 - 10/07/11 06:10 PM Re: Increases in RCV CRA Padawan
AuditorK Offline
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Joined: Feb 2003
Posts: 962
PA
I don't doubt you timd0802, but this is crazy if true. We have some (actually I think most) hazard insurance policy RCVs that increase every year. So we are to contact the customer every year and say, "Oh by the way, we need you to up your flood insurance coverage by $5,000 again."

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#1614049 - 10/07/11 08:15 PM Re: Increases in RCV AuditorK
RR Joker Offline
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RR Joker
Joined: Nov 2002
Posts: 20,654
The Swamp
You are okay until you MIRE the loan, IMHO. YOu are not obligated to monitor your files.
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My opinion only. Not legal advice.

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#1614067 - 10/07/11 08:24 PM Re: Increases in RCV RR Joker
AuditorK Offline
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Joined: Feb 2003
Posts: 962
PA
I remember reading that in the preamble to the 2009 Interagency Q&As. It said you didn't have to have a monitoring process, but if you became aware, you had to address it. We don't have a process of comparing, but we had a loan officer see the difference and bring it up. Is that "becoming aware"?

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#1614232 - 10/10/11 06:14 PM Re: Increases in RCV AuditorK
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
I don't think you need to think about the amount of flood insurance unless you MIRE the loan (as Joker stated). Otherwise, every year when hazard insurance renewals are received, the bank would have info to become "aware".
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David Dickinson
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