FEMA announced effective date for multi-family coverage authorized by B-W. The announcement stated: The new coverage limits are available for new business, renewals, or change endorsements that are effective on or after June 1, 2014. I had assumed that this meant existing policies need not be changed unless a loan is increased, refinanced,etc. or endorsement changes. However, FIS regulatory advisory services suggested that banks review existing policies and increase coverage when warranted or force-place if not increased. What is the accurate interpretation?

You know the amount available is going to increase.

You know the collateral that secures your flood loans.

How could you not have knowledge that they will be underinsured?

Per the FEMA memorandum dated 12/16/13 insurers should have already mailed letters to policyholders regarding the maximum building coverage increase.

The letters states the policyholder may increase coverage limits on their flood policy at any time on or after June 1st however since there is a 30 day waiting period for the revised coverage limits to go into effect policy holders should submit the annual premium, including the amount of the increased coverage, at least 30 days prior to the renewal effective date.

Do you think reviewing the loans that are secured with Other Residential buildings to determine if they have appropriate coverage and if need be start the force placement process can be conducted starting on May 1st or should we wait until June 1st?

They would not be underinsured until June 1st. Your 45 days letters would not go out until then.

OK, Thanks as always.

Are these amounts in the proposed delay in Congress currently?

These changes are not addressed in either the House or Senate bills.