NCUA Alert - Flood Insurance Alternatives

The National Credit Union Administration (NCUA) issued Regulatory Alert (19-RA-01) - Flood Insurance Alternatives that becomes effective July 1, 2019. Starting July 1,  credit unions must accept private flood insurance policies for applicable loans.  The policies must meet the definition of private flood insurance as included under the Biggert-Waters Flood Insurance Reform Act of 2012 (Biggert-Waters Act) and incorporated into Part 760 of the NCUA’s regulations. In addition, credit unions may accept private flood insurance policies that do not meet the definition of private flood insurance as explained in this letter, as well as NCUA-approved private flood insurance plans provided by mutual aid societies.

The Biggert-Waters Act was intended to ease the financial strain on the National Flood Insurance Program (NFIP) by expanding the acceptance of private flood insurance.

On February 20, 2019, the NCUA published an interagency rule regarding loans in areas having special flood hazards in order to implement the private flood insurance provisions of the Biggert-Waters Act. As a result, Part 760 of the NCUA regulations has been updated to account for this rule.

This letter explains the alternatives to NFIP policies and the conditions for their acceptance.

Read the full Regulatory Alert here.