For private flood insurance, is the bank required to accept a policy written by an insurance company not licensed with the state in which the property is located?
For residential properties, no. For nonresidential commercial properties, possibly if the insurance company meets the requirements of the second option.
The Biggert-Waters Act requires banks to accept private flood insurance if the policy meets the elements in the definition, which includes that the insurance provider be "licensed, admitted, or otherwise approved to engage in the business of insurance in the State or jurisdiction in which the insured building is located, by the insurance regulator of that State or jurisdiction." Nonresidential commercial properties, however, may provide coverage by an insurance company that is "recognized, or not disapproved, as a surplus lines insurer by the insurance regulator of the State or jurisdiction where the property to be insured is located." This second option for nonresidential commercial properties applies to "policies of difference in conditions, multiple peril, all risk, or other blanket coverage."
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