We received a private flood policy with the compliance aid statement; but it reads "This policy meets the definition of private flood insurance contained in 42 U.S.C. 4012a(b)(7) and the corresponding regulation.

So it includes "this policy" instead of "the policy" and adds " ...and the corresponding regulation." Is this acceptable? or does it have to be exactly the same? It does reference the correct citation. Do we still need to review the policy for the requirements because it not exactly the same?

Thanks.

We still reviewed the policy for the requirements and the only thing I could not locate is "it includes information about the availability of flood insurance coverage under the NFIP."

I'm not sure I understand your question as the assurance clause listed in your original post appears to align with the final rule's compliance aid: "“This policy meets the definition of private flood insurance contained in 42 U.S.C. 4012a(b)(7) and the corresponding regulation."

I'm sorry, you are right. I was following a checklist that didn't include the last part of the statement. So the only thing I could not locate within the policy is the "availability of flood insurance coverage under the NFIP", but if the compliance aid statement is there, we don't have to worry about it not being there, correct? We don't have to review it?

Thanks,

Would ignoring the fact that you already reviewed the policy and found that it's missing one of the conditions not amount to willful blindness?

Banker 12: Technically, no, you wouldn't have to worry about identifying all/missing elements if the compliance aid is there. You can rely on the compliance aid, or you can do a full review (and ignore the compliance aid) if you want to, for whatever reason. That said, COMPL101TX brings up a good angle, and I am not an attorney so I have no idea on willful blindness. However, you would (most likely) be able to still accept this policy under discretionary acceptance, so I can't see why it would be an issue to accept it based on the compliance aid. Maybe others will have thoughts - Randy?

Yes. No one will know it's been reviewed. It's the same policy copied from the NFIP, that's why they missed that information. But below the compliance aid statement, it does state the policy meets all the provisions required under the private flood rule and lists all the requirements. Is this sufficient?

The lender is going to accept it as is due to the compliance aid statement.

Thanks,

Thank you. We are going to accept it as is.

Where is everyone noticing the "availability of flood insurance coverage under the NFIP" in the policy? We just received another policy and it does not include it.

Thanks,

The one I've seen has the following:

Availability of Flood Insurance Coverage under the National Flood Insurance Program – Similar coverage as contained in this policy is available from insurance agents representing FEMA National Flood Insurance Program. You can locate an agent at www.floodsmart.gov.

Does the compliance aid statement have to be verbatim to the statement included in the rule? I recall attending a webinar in which it was stated that it did have to read exactly as stated in the rule but of course cannot locate anything now that I need it. We have received a policy that is not word for word:

"This flood coverage endorsement meets the private flood insurance requirements specified in 42 USC s. 4012a(b) and does not contain any provision that is not in compliance with 42 USC s. 4012a(b)."

Not in my opinion:

(ii) Compliance aid for mandatory acceptance. A member bank may determine that a policy meets the definition of private flood insurance in paragraph (b)(9) of this section, without further review of the policy, if the following statement is included within the policy or as an endorsement to the policy: “This policy meets the definition of private flood insurance contained in 42 U.S.C. 4012a(b)(7) and the corresponding regulation.”