This is an article from Bloomberg:
FEMA Stops Issuing New Flood Policies

How are we supposed to handle new and renewed flood policies during the government shutdown?

Can they be newly issued and renewed and good until 5/31/2019, and hopefully the shutdown will be ended in the next couple of weeks?

Or do we need to have the customers get private flood insurance?

Please help!

Thanks

You need proof of coverage under the NFIP - which is going to be a challenge if a new policy is required or private insurance, if available, is the other option. The expiration date of any policy that is actually issued is not dependent on any funding authorization.

What about renewals?

Nope NADA at this point according to recent news reports.

Thanks, that was my consensus as well, just wishful thinking.

I have a call to our regulator for their opinion.

I will update everyone if you want.

Thanks

Please do. Who is your regulator?

Here is the guidance from the FDIC:

https://www.fdic.gov/news/news/financial/2010/fil10023.html

It seems that the bank will not be in violation but still taking a risk during the lapse period...if I'm reading this correctly...

That is a different situation however, it is not that the NFIP is not authorized to issue policies because of the lack of reauthorization by Congress. The NFIP was reauthorized on Dec 21st. prior to the gov't shutdown. This is an independent choice by FEMA to not issue policies. I am not sure this is an apples and oranges comparison to previous situations without further guidance from the regulators.

Then I guess you either postpone the loan closing during the shutdown or get Private insurance...

The issue is renewals (you cannot postpone the renewal)... to prevent the risk on an asset quality perspective (it would not be a regulatory risk issue), then you can temporarily require them to get coverage outside of the NFIP until FEMA reissues policies after the shutdown is concluded....

In regards to renewals, do you force place or instruct the borrower to use a private insurer?

It seems like if your willing to take the risk you can collect payments for NFIP insurance amount and it will be instituted after the shutdown otherwise you can request other insurance...

However, I defer to the experts...

It is unclear to me how the bank collecting the flood insurance premiums from the borrower mitigates not having a valid policy in place. Forcing a borrower into a private policy for a renewal might not be all that great either. I would just wait another week and see how all of this shakes out. There is no reason that you can't postpone a renewal for less that 30 days.

That makes sense RL Carey.

Hopefully this will all be corrected next week or the week after

Thanks

Nothing like a huge flip flop to waste everyone's time:

https://www.fema.gov/news-release/2018/1...priations-lapse

I know RLCAREY! So everything's cool now until 5/31/2019?

https://thehill.com/policy/finance/42317...during-shutdown


Thanks Everyone!