Day 1 of existing policy expiration
Day 30 to eliminate the 15 day gap
Day 45

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With the new 30-day waiting period requirements we changed our procedures and we force place on the 1st business day after the policy expires. We do not charge until day 46.

I agree with Dan. If you are force placing on day 46 you are going to have a 45 day gap in any sort of flood insurance coverage.

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We Force Place on day 46. OCC just today told me that we can force place and charge the borrower on day one. If customer gives us proof of insurance, then you refund the customer to the date of that policy. Still need to send the letter out.

OCC just today told me that we can force place and charge the borrower on day one.

You might want to clarify this statement, as it is wrong as it currently stands. You cannot charge them until day 46, however you can charge them for any period of time that the policy has been in place including going back to day one.

This was all explained in Financial Institution Letter, FIL-14-2013, March 29, 2013

That was my understanding also. You could not charge the customer until day 46. I will have to show my examiner that.
Thanks rlcarey!

The OCC person in charge of Compliance heading up our exam left this on my desk: Interagency Statement on the Impact of Biggert-Waters Act dated March 29, 2013 and highlighted the three points after Force Placement as the text showing that we can charge the customer from day one.

That was the same FIL you stated earlier. So he is interpreting it as we can charge from day one.


Do you know of any specific verbiage that states you can not charge the borrower until day 46?

What portion of this sentence do they not understand??

If the borrower fails to purchase flood insurance within 45 days after notification, the lender or servicer must purchase flood insurance on behalf of the borrower and may charge the borrower for the cost of premiums and fees incurred by the lender or servicer.

You can charge them at that time for any period of time (day 1 or day 45 or anything in between).

Besides, what do they care when you charge them? Charging them on day 46 is not a violation regardless.

Our force placed insurance policy becomes effective immediately. So why would we force place on day 1 and not day 31 if the original policy has a 30 day window after expiration? wouldn' that ensure that we had coverage at all times but not double coverage for the 30 days after expiration?

How you manage this process, as long as you are force placing timely, is up to you. Why would you force place in your case - no reason. If you were using a standard NFIP policy or the MPPP program, they have a 30 day wait period, so if you wanted to protect the bank from loss, you need to time the process accordingly.