Do you have to revalidate insurable value each year when your determining required coverage upon receipt of the annual flood insurance? Can anyone point me to regulation that would help us answer this question?

The renewal of annual flood insurance is not a triggering event that would cause you to do anything other than ensure that the policy was properly renewed or replaced and done so on time. Pointing to something is a little difficult. If it was required to do so, the regulations would say so.

That is my view as well; however, my compliance officer is advising that we must validate the current insurable value upon receipt of each flood renewal to determine if we have adequate coverage. I have tried to find text within the regulation that can support my opinion, but I'm having difficulties.

It would be reasonable to verify that the coverage amount has not been reduced. Assuming there's been no balance increase (a trigger), you'd remain in compliance. But if your policy requires that the coverage amount reflect changes in the value of the property (subject to the maximum policy amount available), you have a problem.

Ha - put the shoe on the other foot, since they are the compliance officer. Tell them to provide you with any support they can find for their position. They won't find any. How do they suggest you re-evaluate the property?? Get another appraisal? Flood insurance is based on RCV or ACV and has nothing to do with market values. So either building materials and labor would have to become more expensive (and if ACV there has been no depreciation since the loan was made) to impact replacement costs.

The only thing underwater in this argument is your compliance staff.