VIDEO: What Changed in the 2022 Flood Q&As?
In this Compliance Clip (video), Adam discusses the changes that are included in the May 2022 Interagency Questions and Answers Regarding Flood Insurance. Of course, there were many different changes as these revisions are the first in over a decade that saw many law and rule changes related to flood insurance.
For those interested in taking a deep-dive into the 2022 Flood Q&A changes, check out our 2022 Flood FAQs program in our store here.
Video Transcript
The following is a transcript of this video.
This Compliance Clip is going to answer the question, ”What changed in the 2022 Flood Question and Answers?”
What we have are a group of flood question and answers that have been around since the late 1990’s. These questions and answers are provided by the agencies, otherwise known as the interagencies, that have worked together to try to provide clarity to flood insurance rules. Flood insurance rules are complex, are difficult to understand and interpret, so these questions and answers traditionally have provided a lot of great guidance to financial institutions in a lot of the gray areas where we didn't have an understanding of what the rules said or required. The Questions and Answers have been around since the late nineties. Well, they were revised, of course, back in 2009 and in 2011, kind of as one major revision, because when they released them in 2009, they proposed a couple of additional questions and changes that were finalized in 2011.
Since that time, we had not seen, for over a decade, a revision to the flood question and answers. That said, we saw a lot of different law changes, which of course, changed requirements for flood insurance. And these law changes included, of course, the Biggert-Waters Act and the Homeowners Flood Insurance Affordability Act. In these laws, there were actually some significant changes that took place, and so those changes were rolled out by the agencies. And then, of course, we saw FEMA 2.0 in the Fall of 2021. Based on those law changes, basically, what has changed in the flood question and answers are all the laws and regulations that have changed since the last issuance of the Flood Q&A’s back in 2009 and 2011.
What does that include? That includes a number of things. It includes technical flood insurance related issues. It also includes the escrow requirements for escrowing flood insurance premiums. It also includes the detached structure exemption and the mandatory purchase of flood insurance requirement. And it also includes a requirement for force placement. Those are some changes that took place there. So, there are some significant changes that took place in this realm.
The Q&A's also had a big change because they were reorganized. What they did is they read numbered them. It used to be really 1 through 80 something. What was challenging about that is if you want the question on, let's say, force placement or really a better example would be the amount of insurance required. If you had a question on that, you may understand that you look at Insurable Valuable Question Number 9. But all the questions related to the amount of coverage as needed on flood insurance were not in the same place. So if they add a new question, that may be question 84, maybe they have to add question 10 and they bump all the questions down, then 84 becomes 85 and 74 becomes 75 and so on and so forth. So it was not an ideal numbering system. It was just a chronological order.
What they've done is reorganized the numbering system. And what they've done is they've come up with 19 different categories and each category starts over at one. For example, they may have a category called “Force Placement” and they start with one, they have one through whatever, I think the lowest number is two in a category and the highest number is maybe 16, something like that. The reorganization is one of the biggest things and probably one of the most helpful things in the changes to the 2022 Flood Questions and Answers. That said, there are now 144 questions and answers where previously there were 87.
They're big, big changes, and what you need to do in your organization is make sure you understand what has changed and how it could affect your organization. The reason I say this is the regulators now have clear guidance in a lot of areas where there was no clear guidance. There were no Q & A's in a lot of these areas before, now the regulators have them, auditors have them, and they're going to be looking in your financial institution to make sure you're doing things correctly. That means it's very important for your organization to understand the flood requirements as outlined in the May 2022 Flood Question and Answers.
You could take a look at those questions and answers, but I believe the FDIC’s version of the PDF is 266 pages long. It's very big, very burdensome. They go through a lot of backstory, back history, all of that. Or if you want to fast track, you can go through our program in our store at compliancecohort.com/store. We have 2022 Flood FAQs and the program takes less than three hours to complete, comes with a comprehensive manual, and you can essentially outsource learning and understanding these Q&A's because we'll walk through everything you need to understand related to the 2022 Flood FAQs.
If you're interested in fast tracking your understanding of what changed in detail of the 2022 Question and Answers, take a look at our store, at compliancecohort.com/store, and look for the product called 2022 Flood FAQ's.
That's it for this Compliance Clip.