Bank made loan to LLC, for the purpose of refinancing and renovating an investment property (rental house), so loan is business purpose. Property is located in a flood zone and requires flood insurance. Bank has set up escrow (which we don't require or do often on business/commercial loans) for taxes and hazard insurance. Should flood insurance also have been escrowed in this situation? I believe based on the exception found at 12 cfr 22.5(2)(i): "The loan is an extension of credit primarily for business, commercial, or agricultural purposes:" that we aren't required to escrow flood insurance, however I wanted to be sure...since we do have escrow in place for taxes and hazard insurance on this particular loan. Again, not our typical practice, but something I saw when reviewing this loan file, so wanted to ask. Thanks.