[Adopted 2-6-1995 by Ord. No. 1995-8]
A.
The Finance Secretary of the Municipality of Kingston
or such official's designee (hereinafter, the "municipal officer")
is hereby appointed as the designated officer who is authorized to
carry out all responsibilities and duties of the Municipality stated
herein.
B.
A "fire loss" or "claim for fire damage" is defined
as any loss occurring after the effective date of this article and
covered under a policy of fire insurance, including any endorsements
or riders to the policy.
A.
No insurance company, association or exchange (hereinafter
the "insurer") doing business in the Commonwealth of Pennsylvania
shall pay a claim of a named insured for fire damage to a structure
located within the Municipality of Kingston (hereinafter the "Municipality")
where the amount recoverable for the fire loss to the structure under
all policies exceeds $7,500, unless the insurer is furnished by the
municipal officer with a municipal certificate pursuant to Section
508(b)[1] and unless there is compliance with Sections 508(c) and
(d)[2] and the provisions of this article. The Municipality has,
simultaneously with the adoption of this article, adopted a separate
companion Ordinance No. 1995-7,[3] which provides for the payment of delinquent taxes to
the Municipality from proceeds of certain fire loss claims.
B.
After full compliance with the requirements of Section
508(b)(1)(i)[4] and Ordinance No. 1995-7,[5] a companion ordinance adopted simultaneously with the
adoption of this article, the insurer shall pay the claim of the named
insured; provided, however, that if the loss is agreed upon by the
named insured and the insurer equals or exceeds 60% of the aggregate
limits of liability on all fire policies covering the building structure,
the following procedures shall be followed:
(1)
The insurer shall transfer from the insurance proceeds
to the municipal officer the aggregate of $2,000 for each $15,000
of a claim and for each fraction of that amount of a claim, provided
that:
(a)
This section is to be applied such that if the
claim is $15,000 or less, the amount transferred to the Municipality
shall be $2,000; and
(b)
If, at the time of a loss report, the named
insured has submitted a contractor's signed estimate of the costs
for removing, repairing or securing the building or other structure
in an amount less than the amount calculated under the foregoing transfer
formula, the insurer shall transfer to the Municipality from the insurance
proceeds the amount based upon the estimate.
(2)
The transfer of proceeds shall be on a prorated basis
by all companies, associations or exchanges insuring the building
or other structure. Policy proceeds remaining after the transfer to
the Municipality shall be disbursed in accordance with the policy
terms.
C.
After the transfer, the named insured may submit a
contractor's signed estimate of the costs of removing, repairing or
securing the building or other structure, and the designated officer
shall return the amount of the funds transferred to the Municipality
in excess of the estimate to the named insured, if the Municipality
has not commenced to remove, repair or secure the building or other
structure.
D.
Upon receipt of proceeds under this section, the Municipality
shall do the following:
(1)
The municipal officer shall place the proceeds in
the separate fund to be used solely as security against the total
costs of removing, repairing or securing the building or structure
which are incurred by the Municipality. Such costs shall include,
without limitation, any engineering, legal or administrative costs
incurred by the Municipality in connection with such removal, repair
or securing of the building or any other proceedings related thereto.
(2)
It is the obligation of the insurer when transferring
the proceeds to provide the Municipality with the name and address
of the named insured. Upon receipt of the transferred funds and the
name and address of the named insured, the municipal officer shall
contact the named insured, certify that the proceeds have been received
by the Municipality and notify the named insured that the procedures
under this subsection shall be followed.
(3)
When repairs, removal or securing of the building
or other structure have been completed in accordance with all applicable
regulations and orders of the Municipality and the required proof
of such completion received by the municipal officer, and if the Municipality
has not incurred any costs for repairs, removal or securing, the fund
shall be returned to the named insured. If the Municipality has incurred
costs for repairs, removal or securing of the building or other structure,
the costs shall be paid from the fund; and if excess funds remain,
the Municipality shall transfer the remaining funds to the named insured.
(4)
To the extent that interest is earned on proceeds
held by the Municipality pursuant to this section, and retained by
it, such interest shall belong to the Municipality. To the extent
that proceeds are returned to the named insured, interest earned on
such proceeds shall be distributed to the named insured at the time
that the proceeds are returned.
E.
Nothing in this section shall be construed to limit
the ability of the Municipality to recover any deficiency. Furthermore,
nothing in this article shall be construed to prohibit the Municipality
and the named insured from entering into an agreement that permits
the transfer of funds to the named insured if some other reasonable
disposition of the damaged property has been negotiated.
The Municipality of Kingston may by resolution
adopt procedures and regulations to implement Section 508[1] and this article and may by resolution fix reasonable
fees to be charged for municipal activities or services provided pursuant
to Section 508 and this article, including but not limited to issuance
of certificates and bills, performance of inspections and opening
separate fund accounts.
[1]
Editor's Note: See 40 P.S. § 638.
Any owner of property, any named insured or
any insurer who violates this article shall be subject to a penalty
of up to $1,000 per violation.