[HISTORY: Adopted by the Borough Council of the Borough of
Muncy as indicated in article histories. Amendments noted where applicable.]
[Adopted 4-3-2007 by Ord. No. 490]
As used in this article, the following terms shall have the
meaning indicated:
Any loss occurring after the effective date of this article
and covered under a policy of fire insurance, including any endorsements
or riders to such policy.
The Borough Secretary-Treasurer, or such other official designated
by the Borough Council, is hereby appointed as the designated officer
who is authorized to carry out all responsibilities and duties of
the Borough stated herein.
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
Borough where the amount recoverable for the fire loss to the structure
under all policies exceeds $7,500, unless the insurer is furnished
by the Borough Secretary-Treasurer with a Borough certificate pursuant
to Section 508(b) of Act 98 of 1992[1] and unless there is compliance with Sections 508(c) and
(d) of Act 98 of 1992 and the provisions of this article and the ordinance
for payment of delinquent taxes from fire insurance proceeds and the
delinquent tax ordinance.
[1]
Editor's Note: See 40 P.S. § 638(b).
B.
After full compliance with the requirements of Section 508(b)(1)(i)
of Act 98 of 1992, 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 Borough
Secretary-Treasurer the aggregate of $2,000 for each $15,000 of a
claim and for each fraction of the amount of a claim, provided:
(a)
That this section is to be applied such that if the claim is
$15,000 or less, the amount transferred to the Borough shall be $2,000;
and
(b)
That, if at that time of a loss report the named insured has
submitted a contractor's signed estimate of the costs of 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 Borough from the insurance proceeds
the amount based upon the estimate.
(2)
The transfer of proceeds shall be on a pro rata basis by all companies,
associations or exchanges insuring the building or other structure.
Policy proceeds remaining after the transfer to the Borough 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 Borough in excess of the
estimate to the named insured, if the Borough has not commenced to
remove, repair or secure the building or other structure.
D.
Upon receipt of proceeds under this section, the Borough shall do
the following:
(1)
The Borough Secretary-Treasurer 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 Borough. Such costs shall include, without limitation, any
engineering, legal or administrative costs incurred by the Borough
in connection with such removal, repair or securing of the building
or any proceedings related thereto;
(2)
It is the obligation of the insurer when transferring the proceeds
to provide the Borough with the name and address of the named insured.
Upon receipt of the transferred funds and the names and addresses
of the named insured, the Borough Secretary-Treasurer shall contact
the named insured, certify that the proceeds have been received by
the Borough 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 Borough and the required proof of such completion
received by the Secretary-Treasurer, the Borough has not incurred
any costs for repairs, removal or securing, the fund shall be returned
to the named insured. If the Borough 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 Borough shall
transfer the remaining funds to the named insured; and
(4)
To the extent that interest is earned on proceeds held by the Borough
pursuant to this section, and retained by it, such interest shall
belong to the Borough. 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 Borough to recover any deficiency. Furthermore, nothing in this
article shall be construed to prohibit the Borough 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 Borough Council will adopt procedures and regulations to
implement Section 508 of Act 98 of 1992[1] and this article and may by resolution fix reasonable
fees to be charged for Borough activities or services provided to
Section 508 of Act 98 of 1992 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 not more than
$1,000 per violation, together with the costs of prosecution, and
in default of payment of such fine and costs, to imprisonment for
not more than 30 days. Every day's violation shall be deemed
to be a separate offense.
