On July 31, 2018 Congress passed bill 1182, which includes the reauthorization of the NFIP through November, 30 2018. If on November 30, 2018 the NFIP's authority is not reauthorized, we recommend your financial institution continues to maintain all business practices as normal related to flood insurance servicing, including:
- Timely remittance of escrow payments
- Proper exposure processing
- Flood lender placement as per normal guidelines
The following are key impacts to NFIP policies should a lapse in authority occur at any point:
New Policies or Requests to Increase Coverage:
Applications for new policies or requests to increase coverage dated after lapse will not be issued or processed
Applications for new policies or requests to increase coverage will not be issued if received after the grace period AND the premium payment is not received within 10 days of the application date
Renewals:
- Renewal offers will not be made during lapse
- Renewals will be issued if renewal offer is made prior to lapse AND premium is received before or during lapse period
Cancellations:
- Policies can be canceled during lapse period according to NFIP cancellation reason codes
Endorsements:
- Endorsements that do not increase coverage will be processed
- Existing policies may be assigned during grace period
Claims:
- Claims on valid, in-force policies will be processed and paid as usual
Please note that if a lapse occurs in the NFIP authority, it will not interrupt or alter our processes related to the monitoring, escrowing, or lender-placement of flood insurance.
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