When to Provide the Notice About Flood Insurance Coverage

(1) Notice Requirement. At the time you require a purchaser or owner of a residential property to purchase or pay for flood insurance on the property in a designated loan transaction, you must provide a Notice About Flood Insurance Coverage to the purchaser or owner in accordance with 209 CMR 57.05. (2) Delivery and Timing of Notice. You must mail or deliver the Notice About Flood Insurance Coverage to the purchaser or owner of the residential property by the same method, and at the same time, that the Notice of Special Flood Hazards issued pursuant to 42 U.S.C. § 4012a(b)(6) is provided to such purchaser or owner. (3) Multiple Creditors or Creditor’s Representatives. If a transaction involves more than 1 creditor or creditor’s representative, only 1 Notice About Flood Insurance Coverage must be given to the purchaser or owner, and the creditors and creditor’s representatives shall agree among themselves which creditor or creditor’s representative must comply with the notice requirements that 209 CMR 57.04 imposes on any or all of them. (4) Notice Not Required at Policy Renewal. (a) Except as provided under 209 CMR 57.04(4)(b), you are not required to provide the Notice About Flood Insurance Coverage to the insured owner of the residential property on an annual basis at the time the owner is notified of the need to renew the existing flood insurance policy. (b) You must provide the Notice About Flood Insurance Coverage to the insured owner of the residential property at the time the owner is notified of the need to renew the existing flood insurance policy if there is an increase, extension, or renewal of the existing mortgage loan, or a new mortgage loan, made at that time, or the addition of new coverage or an increase in the amount of flood insurance coverage in excess of the policy amount which was in effect for the expiring policy period. (5) Lender Placed Insurance. If during the term of the designated loan, you determine that the designated loan is not covered by flood insurance, or if the flood insurance coverage is determined to be deficient pursuant to applicable guidelines for the National Flood Insurance Program, you must provide the Notice About Flood Insurance Coverage to the owner of the property at the time you provide notice to such owner of the requirement to obtain the necessary amount of flood insurance prior to the forced placement of insurance. (6) Multiple Purchasers or Owners. When 2 or more purchasers or owners are joint obligors with primary liability on a designated loan, you may provide the Notice About Flood Insurance Coverage required under 209 CMR 57.04(1) through 209 CMR 57.04(5), inclusive, to any 1 of them. If 1 purchaser or owner is a surety or guarantor, you must provide the Notice About Flood Insurance to the principal debtor. (7) Insurance Producers. (a) An insurance producer required to provide notice as set forth in M.G.L. c. 183, § 69 must provide such notice to the purchaser or owner of the residential property in clear and conspicuous print either: 1. At the time the purchaser or owner is notified of the need to purchase or pay for flood insurance; or 2. At the time the purchaser or owner submits an application for flood insurance. (b) The Division of Insurance shall administer and enforce the requirements set forth in 209 CMR 57.04(7)(a), including the determination of the form of notice to be provided by an insurance producer. 57.05 Format of Notice About Flood Insurance Coverage (1) Clear and Conspicuous Standard. You must make the Notice About Flood Insurance Coverage clearly and conspicuously. (2) Contents of the Notice. You must include the following in the Notice About Flood Insurance Coverage: (a) the name of the borrower(s); (b) the address of the residential property to be insured; (c) your name and address as the provider of the notice; (d) a statement on the limitations on required flood insurance coverage as set forth in M.G.L. c. 183, § 69; and (e) a section for the signature of the borrower to acknowledge receipt of the Notice About Flood Insurance Coverage; provided, however, you are not required to obtain such signature from the borrower when you are providing the notice prior to the forced placement of flood insurance pursuant to 209 CMR 57.04(5). (3) Form of Notice. If you require in a mortgage, note, or otherwise, that a purchaser or owner of a residential property purchase or pay for flood insurance on the property, you must provide a Notice About Flood Insurance Coverage to the purchaser or owner of the property which strictly conforms to the following: IMPORTANT NOTICE ABOUT YOUR REQUIRED FLOOD INSURANCE COVERAGE Borrower(s): Property Address: This Notice is being provided by your:  Creditor:  Creditor’s Representative: In this Notice, the term ‘we’ refers to your creditor or creditor’s representative. We have determined that the above address is located in a special flood hazard area. As a result, we are requiring that you purchase a minimum level of flood insurance on the property. This Notice provides important information about what protection this insurance will and will not provide. • Please note that the flood insurance we are requiring you to purchase will only protect your creditor’s or lender’s interest in your property. • Massachusetts law prohibits a creditor or lender from requiring you to purchase flood insurance in excess of the amount of your principal mortgage and, in the case of a home equity line of credit, home equity loan or second and subsequent mortgage, the full value of the credit line, outstanding principal on the equity loan or second or subsequent mortgage on that property at the beginning of the year for which the policy will be in effect. • The insurance may not be sufficient to pay for many needed repairs after a flood and may not compensate you for your losses in the property due to the flood. • If you wish to protect your home or investment, you may want to purchase more flood insurance than the amount we are requiring you to buy. You should contact a licensed insurance professional to purchase required flood insurance on this property, and to determine if additional coverage is appropriate for your circumstances. Please retain a copy of this Notice because it contains important information about your flood insurance coverage. ACKNOWLEDGMENT OF RECEIPT The undersigned acknowledges receipt of a copy of the above Notice About Your Required Flood Insurance Coverage. Borrower’s Signature Date