Private Flood Q&As, Loss Drafts Updates and State Mail Delivery Delays
Agencies Propose Private Flood Insurance Q&As
The five federal agencies (FDIC, OCC, FRB, NCUA, and Farm Credit Administration – collectively, Agencies) issued a request for public comment on new Interagency Questions and Answers Regarding Private Flood Insurance.
The Agencies’ proposal includes 24 new Q&As divided into three general categories:
- PRIVATE FLOOD INSURANCE – MANDATORY ACCEPTANCE
- PRIVATE FLOOD INSURANCE – DISCRETIONARY ACCEPTANCE
- PRIVATE FLOOD INSURANCE – GENERAL COMPLIANCE
Comments to the proposal are due 60 days from the date the Q&As are published in the Federal Register.
A copy of the proposed Q&As can be found here.
Proctor Loan Protector is in the process of reviewing the proposed Q&As and their potential impact on clients’ business rules.
Maryland Insurance Administration Responds to Mail Delays
In response to recent mail delivery delays by the U.S. Postal Service, the Insurance Commissioner of Maryland issued a bulletin advising insurers, producers, and premium finance companies of the Administration’s expectations.
The Insurance Administration requests that robust efforts are made to advise policyholders of all available options to receive required notices and make payments electronically. The Insurance Administration also expects that cancellations and nonrenewals resulting from nonpayment of premium will be monitored and that proactive measures will be implemented that seek to avoid, to the greatest extent possible, cancellations and nonrenewals resulting from non-payment of premium where the delay in receipt of payment may be attributable to mail delivery delays.
Please note, if we are providing borrower notification services for your institution, no changes will occur to the notification cycle or lender placement. To review Bulletin 21-08 in its entirety, including measures suggested by the Administration, follow the link provided here.
Fannie Clarifies Loss Draft Disbursement Approval Process
To provide clarification, Fannie Mae recently published an announcement that pertains to requesting approval to pay third parties from insurance loss proceeds.
Currently servicers must request prior approval from Fannie to disburse funds to pay fees from insurance loss proceeds to a third party retained by the borrower to assist with the recovery of insurance loss proceeds in connection with an insured loss. In efforts to increase clarity and efficiency, Servicing Guide section B-5-01, Insured Loss Events, was revised to instruct servicers where and how to submit requests.
Servicers must request approval by submitting Form 176 to Fannie Mae’s SF CPM Division. The request must include the mortgage loan and property information, a description of the specific damage or loss, details of the insurance claim, and a business justification for the request.
To review SVC-2021-02 in its entirety, click here. This policy clarification is effective immediately.
Proctor Loan Protector will continue to monitor these topics and provide updates as they develop.