Banking agencies issue updated flood insurance guidance

The banking agencies today issued a set of reorganized, revised and expanded interagency questions and answers on flood insurance compliance. This guidance consolidates Q&As that were previously proposed in July 2020 and March 2021.

Among other things, the new Q&As provide guidance related to major amendments to the flood insurance laws with regard to the escrow of flood insurance premiums, the detached structure exemption, force placement procedures, and the acceptance of flood insurance policies issued by private insurers.

In response to concerns raised by the American Bankers Association and other trade groups in comments on the previously proposed Q&As, the agencies confirmed that they “are providing the interagency questions and answers as guidance only,” and do not serve as the basis for supervisory action.