30-day wait for Lender-placed policies

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  • #4176
    HMDA Guy 78

    Has anyone had to force-place a policy since 10/1/13? Just recently I became aware that effective 10/1/13, the “no waiting period” for lender required policies not in connection with a loan transaction (i.e. “force-placed policies”) has been eliminated. This means that if I ordered a force-placed policy today and we made the payment to our local insurance agent vendor, that the policy would not take effect for 30 days until 11/30, whereas before it would be effective today – date of payment.

    I am wondering how this elimination of the “no wait” period is going to affect us with the 45-day timing. We have two customers who – while not in writing – have in practice for years relied on the Bank to do the force-placing of their flood insurance (except the initial year in connection with their loan closing).

    Do I now have to “order” and get payment made on day 16 after expiration of the policy, so that on day 46 – 30 days later – the policy is in effect? If I do that though, I think I am in violation, since I am not supposed to start the force-placed policy until after 45 days of no coverage after hte previous policy lapses.

    Here is a link to some changes effective 10/1/13 for anyone interested:

    Any thoughts and help are welcome!!


    I would also be interested to know how this would affect the bank as well.

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