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Inactive Financial Institution
Letters
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Federal
Emergency Management Agency Preferred Risk Policy: Two-Year Eligibility
Extension
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FIL-86-2010
December 16, 2010
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Summary:
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The Federal Emergency Management
Agency (FEMA) announced on July 15, 2010, that Preferred Risk Policy (PRP)
eligibility will be extended two years beginning January 1, 2011. Under
provisions of the extension, effective January 1, 2011, a building is generally
eligible for a PRP for two years after the building's flood zone is newly mapped
into a Special Flood Hazard Area (SFHA) through a map revision. Certain
conditions apply for the extended eligibility.
The PRP two-year eligibility extension does not apply to properties in SFHAs
before the map change. Residential condominium associations eligible for
coverage under the Residential Condominium Building Association Policy are
not eligible for the PRP or the two-year PRP coverage extension.
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Highlights:
- The attached announcement provides information about PRP eligibility, flood
zone discrepancies, and mandatory purchase requirements.
- The writing company, not the lender, will validate a customer's PRP
extended eligibility and initiate customer contact.
- Lenders are still required, among other things, to ensure the sufficiency
of flood insurance coverage; make flood zone determinations; and provide
borrowers with notice that their property is located in an SFHA. FEMA has
prepared guidance for lenders, including answers to frequently asked
questions, which can be found at http://www.nfipiservice.com/stakeholder/pdf/bulletin/w-10089.pdf.
- The attached announcement also provides a link to FEMA guidance to the
insurance industry. This guidance contains informational materials,
including answers to frequently asked questions to help insurers respond to
consumer questions.
- For further information, lenders should contact the National Flood Insurance
Program Help Center at (800) 427-4661, FEMA via email at FloodSmart@dhs.gov, or the
appropriate regulatory agency.
Distribution:
FDIC-Supervised Banks
(Commercial and Savings)
Suggested Routing:
Chief Executive Officer
Compliance Officer
Attachment:
FEMA Preferred Risk Policy: Two-Year Extension of
Eligibility
Contact:
John Jackwood, Senior Policy Analyst (Compliance), at (202) 898-3991 or jjackwood@fdic.gov
Note:
FDIC financial institution letters (FILs) may be accessed from the FDIC's Web
site at www.fdic.gov/news/news/financial/2010/index.html.
To receive FILs electronically, please visit http://www.fdic.gov/about/subscriptions/fil.html.
Paper copies of FDIC financial institution letters may be obtained from the
FDIC's Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA
22226 (1-877-275-3342 or 703-562-2200).
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