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#2214009 - 05/20/19 04:39 PM Private Flood Insurance Policies
GBender Offline
New Poster
Joined: Jan 2015
Posts: 1
As we prepare for this new rule on 7/1/19, our project committee had a question that we just are not 100% sure about. The new rule states we can rely on a Private Policy that says it is compliant with 42 U.S.C. 4012a(b)(7). So the questions is “does the Surplus Line Disclosure on a National Catastrophe Insurance Program policy in anyway affect or nullify the compliance statement which we can rely on.

My thought is no. There is also a state requirement (Kansas) disclosure indicating the Insurers are not authorized to do business in Kansas. Does the Dodd-Frank statement “otherwise approves” that this policy can be used as insurance for property in Kansas under 4012a(b)(7)(a)(i).

Any insight would be appreciated. Thanks

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Flood Compliance
#2214625 - 05/30/19 05:41 PM Re: Private Flood Insurance Policies GBender
J Van Horn Offline
New Poster
Joined: Sep 2012
Posts: 24
Coppell, Texas
Correct, the surplus lines disclosure does not nullify the compliance statement.

The "stamps" we find on surplus lines policies are crafted to alert us to the fact that the policy purchased (its terms, conditions, rates, etc) has not been reviewed or approved by the state, which also means the state does not guarantee loss payment in the event the insurer becomes insolvent.

Though phrases like "not approved to write insurance", "not authorized to do business", and similar appear in the stamps, that approval and authorization has to do with the business of the state insurance department managing *admitted and filed* insurance programs. These statements do not negate the terms of the contract, nor are they an indication that the policy itself is fraudulent, illegal, illicit, etc.

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