Regulatory Alerts2021-10-05
Mutual Aid Society Flood Insurance
The Pennsylvania Department of Banking and Securities clarifies that flood insurance plans offered by mutual aid societies are acceptable to state-chartered financial institutions under the Banking Code. Although the Banking Code does not explicitly define insurance or address flood coverage, Section 303(h) permits institutions to require such plans as collateral protection in credit agreements. The Department concludes that these plans are permissible provided they conform to the private flood insurance requirements found in 12 C.F.R. § 208.25(c)(3)(iv).
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