Answer:
When the new rules were announced the agencies were concerned that many lenders, especially smaller ones, may lack technical expertise regarding flood insurance policies in general. Therefore, it might be challenging with such lenders to evaluate whether a policy meets the statutory definition of “private flood insurance” in the Biggert-Waters Act.
The final rule includes the “compliance aid” provision designed to facilitate lenders' determination as to whether a flood insurance policy meets the definition of “private flood insurance,” and therefore must be accepted under the “mandatory acceptance” provision.
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Learn more about Susan Costonis’s webinar Flood Insurance Fundamentals – Passing the next Compliance Exam
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