OCC BULLETIN 2010-40
Subject: Flood Insurance
Date: November 17, 2010
To: Chief Executive Officers and Compliance Officers of All National Banks, Department and Division Heads, and All Examining Personnel
Description: Preferred Risk Policies Eligible for Use after Remapping
The guidance attached to this bulletin continues to apply to federal savings associations.
The Federal Emergency Management Agency (FEMA) announced on July 15, 2010, that Preferred Risk Policy (PRP) eligibility will be extended for two years effective January 1, 2011, or the effective date of the flood map revision, whichever is later, for some policies covering buildings newly mapped within a Special Flood Hazard Area (SFHA) by a flood map revision effective on or after October 1, 2008. PRPs offer low-cost coverage to owners and tenants of eligible buildings located in National Flood Insurance Program (NFIP) Regular Program communities. FEMA’s stated goal in providing this temporary extension of PRP eligibility is to reduce some of the financial burden on borrowers with collateral located in newly mapped SFHAs. FEMA states that insurance companies will be contacting those policyholders who may qualify for this extension at least 90 days before their policy expires.
The PRP two-year eligibility extension does not apply to properties that were already located in SFHAs prior to the map change. Residential condominium associations eligible for coverage under the Residential Condominium Building Association Policy (RCBAP) are not eligible for the PRP and, therefore, they are not eligible for this two-year extension of PRP coverage.
Determining PRP Eligibility
Zone Discrepancy Issues
Mandatory Purchase Requirement
For further information, lenders should contact the NFIP Help Center at (800) 427-4661, FEMA via e-mail at FloodSmart@dhs.gov, or their supervisory regulator.
For more information, please contact Pamela Lea Mount, National Bank Examiner, Compliance Policy Division, at (202) 649-5470; or Margaret Hesse, Special Counsel, Community and Consumer Law Division, at (202) 649-6350.
Ann F. Jaedicke