Flood Insurance Employee Training

1
Flood Insurance - Employee Training

• American Bank and Trust
• 2003

2
Introduction

• Foundation of the National Flood Insurance Reform
  Act of 1994

3
Topics of Discussion

• Flood Insurance - Why should we care?
• Definitions
• What must we do to comply?

4
Flood Insurance - Why should we care?

• Flooding is the 1 natural disaster that occurs
  each year
• Flooding is an equal opportunity offender - it
  affects businesses and homes alike
• Flooding disasters are expensive to everyone

5
Definitions

• Participating Community
• Any community that voluntarily elects to
  participate in the NFIP by adopting and enforcing
  floodplain management regulations that are
  consistent with the standards of the NFIP
• Non-Participating Community
• A community in which the sale of flood insurance
  is not authorized because the community chooses
  not to participate in the NFIP
• Special Flood Hazard Area (SFHA)
• Identifies an area on a flood map that has a
  1-percent chance of being flooded in any given
  year (100-year floodplain). Over a 30-year
  period, the life of most mortgages, there is at
  least a 26-percent chance that this area will be
  flooded. (Any flood zone that begins with an A or
  V is subject to the 100-year flood).
• Designated loan
• A loan secured by a building or mobile home
  located or to be located in a Special Flood
  Hazard Area (SFHA) where flood insurance is
  available under the 1968 Act

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8 Rules of Compliance

• Flood insurance is mandatory for buildings in
  Special Flood Hazard Areas as identified by FEMA
• Ensure that flood insurance coverage is
  maintained for the term of the loan
• Flood zone determinations are required to
  establish whether a structure is located in a
  SFHA
• Know the amount of flood insurance coverage to
  require
• Notify borrowers in writing of the requirement to
  buy flood insurance for new and existing loans
• Escrow flood insurance premiums
• There is no waiting period for flood insurance to
  go into effect when it is purchased in connection
  with the making, increasing, renewing, or
  extending a loan
• Notify the insurance company or agent when the
  lender or servicer of a loan changes

7
What must we do to comply?

• Remember M.I.R.E.
• Ensure adequate coverage! - (Sample form)
• Monitor LOL coverage