[Code 1997; CC 2000 §8-901]
The City is hereby authorized to utilize the procedures established
by K.S.A. Section 40-3901 et seq., whereby no insurance company shall
pay a claim of a named insured for loss or damage to any building
or other structure located within the City arising out of any fire,
explosion or windstorm where the amount recoverable for the loss or
damage to the building or other structure under all policies is in
excess of seventy-five percent (75%) of the face value of the policy
covering such building or other insured structure, unless there is
compliance with the procedures set out in this Article.
[Code 1997; CC 2000 §8-902]
The Governing Body of the City hereby creates a lien in favor
of the City on the proceeds of any insurance policy based upon a covered
claim payment made for damage or loss to a building or other structure
located within the City caused by or arising out of any fire, explosion
or windstorm where the amount recoverable for all the loss or damage
to the building or other structure under all policies is in excess
of seventy-five percent (75%) of the face value of the policy(s) covering
such building or other insured structure. The lien arises upon any
unpaid tax, special ad valorem levy or any other charge imposed upon
real property by or on behalf of the City which is an encumbrance
on real property, whether or not evidenced by written instrument,
or such tax, levy, assessment, expense or other charge that has remained
undischarged for at least one (1) year prior to the filing of a proof
of loss.
[Code 1997; CC 2000 §8-903]
Prior to final settlement on any claim covered by Section 510.270, the insurer or insurers shall contact the County Treasurer, Johnson County, Kansas, to determine whether any such encumbrances are presently in existence. If the same are found to exist, the insurer or insurers shall execute and transmit in an amount equal to that owing under the encumbrances a draft payable to the County Treasurer, Johnson County, Kansas.
[Code 1997; CC 2000 §8-904]
Such transfer of proceeds shall be on a pro rata basis by all
insurance companies insuring the building or other structure.
[Code 1997; CC 2000 §8-905]
A.
When
final settlement on a covered claim has been agreed to or arrived
at between the named insured or insureds and the company or companies
and the final settlement exceeds seventy-five percent (75%) of the
face value of the policy covering any building or other insured structure
and when all amounts due the holder of a first (1st) real estate mortgage
against the building or other structure, pursuant to the terms of
the policy and endorsements thereto, shall have been paid, the insurance
company or companies shall execute a draft payable to the City in
an amount equal to the sum of fifteen percent (15%) of the covered
claim payment, unless the Chief Building Inspector of the City has
issued a certificate to the insurance company or companies that the
insured has removed the damaged building or other structure, as well
as all associated debris, or repaired, rebuilt or otherwise made the
premises safe and secure.
[Ord. No. 1477, 3-21-2018]
B.
Such
transfer of funds shall be on a pro rata basis by all companies insuring
the building or other structure. Policy proceeds remaining after the
transfer to the City shall be disbursed in accordance with the policy
terms.
C.
Upon the transfer of the funds as required by Subsection (A) of this Section, the insurance company shall provide the City with the name and address of the named insured or insureds, the total insurance coverage applicable to said building or other structure, and the amount of the final settlement agreed to or arrived at between the insurance company or companies and the insured or insureds, whereupon the Chief Building Inspector shall contact the named insured or insureds by registered mail notifying them that said insurance proceeds have been received by the City and apprise them of the procedures to be followed under this Article.
[Code 1997; CC 2000 §8-906; Ord. No.
1477, 3-21-2018]
The Finance Director is hereby authorized and shall create a
fund to be known as the "Insurance Proceeds Fund." All monies received
by the City as provided for by this Article shall be placed in said
fund and deposited in an interest-bearing account.
[Code 1997; CC 2000 §8-907; Ord. No.
1477, 3-21-2018]
A.
Upon
receipt of monies as provided for by this Article, the Finance Director
shall immediately notify the Chief Building Inspector of said receipt
and transmit all documentation received from the insurance company
or companies to the Chief Building Inspector.
B.
Within
twenty (20) days of the receipt of said monies, the Chief Building
Inspector shall determine, after prior investigation, whether the
City shall instigate proceedings under the provisions of K.S.A. Section
12-1750 et seq., as amended.
C.
Prior to the expiration of the twenty (20) days established by Subsection (B) of this Section, the Chief Building Inspector shall notify the Finance Director whether he/she intends to initiate proceedings under K.S.A. Section 12-1750 et seq., as amended.
D.
If
the Chief Building Inspector has determined that proceedings under
K.S.A. Section 12-1750 et seq., as amended, shall be initiated, he/she
will do so immediately but no later than thirty (30) days after receipt
of the monies by the City.
E.
Upon
notification by the Chief Building Inspector that no proceedings shall
be initiated under K.S.A. Section 12-1750 et seq., as amended, the
Finance Director shall return all such monies received, plus accrued
interest, to the insured or insureds as identified in the communication
from the insurance company or companies. Such return shall be accomplished
within thirty (30) days of the receipt of the monies from the insurance
company or companies.
[Code 1997; CC 2000 §8-908]
If the Chief Building Inspector has proceeded under the provisions
of K.S.A. Section 12-1750 et seq., as amended, all monies in excess
of that which is ultimately necessary to comply with the provisions
for the removal of the building or structure, less salvage value,
if any, shall be paid to the insured.
[Code 1997; CC 2000 §8-909; Ord. No.
1477, 3-21-2018]
If the Chief Building Inspector, with regard to a building or other structure damaged by fire, explosion or windstorm, determines that it is necessary to act under K.S.A. Section 12-1756, any proceeds received by the City under the authority of Section 510.300(A) relating to that building or other structure shall be used to reimburse the City for any expenses incurred by the City in proceeding under K.S.A. Section 12-1756. Upon reimbursement from the insurance proceeds, the Chief Building Inspector shall immediately effect the release of the lien resulting therefrom. Should the expenses incurred by the City exceed the insurance proceeds paid over to the City under Section 510.300(A), the Chief Building Inspector shall publish a new lien as authorized by K.S.A. Section 12-1756, in an amount equal to such excess expenses incurred.
[Code 1997; CC 2000 §8-910]
This Article shall not make the City a party to any insurance
contract, nor is the insurer liable to any party for any amount in
excess of the proceeds otherwise payable under its insurance policy.
[Code 1997; CC 2000 §8-911]
Insurers complying with this Article or attempting in good faith
to comply with this Article shall be immune from civil and criminal
liability and such action shall not be deemed in violation of K.S.A.
Section 40-2404 and any amendments thereto, including withholding
payment of any insurance proceeds pursuant to this Article or releasing
or disclosing any information pursuant to this Article.
