[TheBank]

Is it acceptable for the compliance aid statement to appear on the declarations page, rather than the policy or an endorsement? Until now the compliance aid statements have been stated on the policy or an endorsement page to the policy.

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[rcooper]

The flood reg states:
12 CFR 323(c)(2) Compliance aid for mandatory acceptance. An FDIC-supervised institution may determine that a policy meets the definition of private flood insurance in § 339.2, without further review of the policy, if the following statement is included within the policy or as an endorsement to the policy: “This policy meets the definition of private flood insurance contained in 42 U.S.C. 4012a(b)(7) and the corresponding regulation.”

From insurance sources I’ve spoken with and from review of policies, it seems the declarations sheet is generally part of the insurance policy -and some policies will state such in their definitions of “Declarations Page/Sheet” or “Policy” so it should be sufficient. The Private Flood Insurance final rule state the following in the preamble which I believe supports that you may be able to rely on the dec sheet in some instances (I bolded info below):

The Agencies acknowledge that under existing force placement requirements, a declarations page is sufficient to evidence a borrower’s purchase of flood insurance. However, a declarations page may be insufficient for a regulated lending institution to make a determination that the institution must accept a private flood insurance policy in satisfaction of the flood insurance purchase requirement if the declarations page does not provide enough information for the institution to determine that the policy meets the statutory definition of “private flood insurance.” In these circumstances, the regulated lending institution should request additional information about the policy to aid it in making its determination.

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