[Adopted 11-21-2002 by Ord. No. 02-11]
The Township, through provisions of this Part 2, hereby incorporates the provisions of Section 638 of the Insurance Company Law, 40 P.S. § 638, as amended, which provides the Township with the authority to require security in the form of insurance proceeds from an insurance company, association or exchange (hereinafter the "insuring agent"), doing business in Pennsylvania, for the removal, repair and securing of fire-damaged buildings and other structures subject to fire loss claims.
The Township Manager, or such official's designee, shall
be the designated officer authorized to carry out all responsibilities
and duties stated herein. Any reference to "Township Manager" or "Manager"
shall be defined to include the Manager and/or the Manager's
official designee.
No insuring agent shall pay a claim of a named insured for fire
damage to a structure located within the Township where the amount
recoverable for the fire loss to the structure under all policies
exceeds $7,500, unless the insuring agent is furnished with a municipal
certificate from the Township Manager pursuant to Section 638(b) of
the Insurance Company Law, as amended,[1] and unless there is compliance with the provisions of
this Part 2.
[1]
Editor's Note: See 40 P.S. § 638(b).
A.
Issuance of certificate where delinquent taxes or charges are due
and/or costs have been incurred by Township related to the fire-damaged
building or structure. Where, pursuant to Section 638(b)(1)(ii) of
the Insurance Company Law, as amended,[1] the Township Manager is requested to issue a certificate
to the insuring agent regarding property that is subject to delinquent
taxes, assessments, penalties and user charges, the Manager shall
issue such certificate along with a bill showing the amount of delinquent
taxes, assessments, penalties and user charges against the subject
property that have not been paid as of the date of the Manager's
certificate and also showing, as of the date of the Manager's
certificate, the amount of the total costs, if any, certified to the
Manager that have been incurred by the Township for the removal, repair
or securing of a damaged building or other structure on the property.
(1)
The Township shall be responsible for certifying to the Manager any
such costs incurred by the Township for removal, repair or securing
of a damaged building or other structure on the property.
(2)
The insuring agent shall, upon receipt of such certificate and bill,
return the bill to the Township Manager and transfer to the Manager
an amount from the insurance proceeds necessary to pay the taxes,
assessments, penalties, charges and costs as shown on the bill.
(3)
The Township shall, upon receipt of such amount, apply or credit
the amount to payment of the items shown on the bill.
[1]
Editor's Note: See 40 P.S. § 638(b)(1)(ii).
B.
Issuance of certificate where no delinquent taxes or charges are
due and no costs have been incurred by the Township related to the
fire-damaged building or structure. Where, pursuant to Section 638(b)(1)(i)
of the Insurance Company Law, as amended,[2] the Township Manager is requested to issue a certificate to the insuring agent, or, at the discretion of the Township Manager, a verbal notification confirmed in writing by the insuring agent, regarding property that is not subject to delinquent taxes, assessments, penalties or user charges, the Manager shall issue such a certificate which indicates that there are no delinquent taxes, assessments, penalties or user charges against the property and that, as of the date of the Manager's certificate or verbal notification, the Township has not certified any amount as total costs incurred by the Township for the removal, repair or securing of a damaged building or other structure on the property, and the insuring agent shall pay the claim of the named insured; provided however, that if the loss as agreed upon by the named insured and the insuring agent equals or exceeds 60% of the aggregate limits of liability on all fire policies covering the building or other structure, the insuring agent shall transfer proceeds, as security, to the Township in accordance with Subsections C and D of this section, which conform to Section 638(c) and (d) of the Insurance Company Law.[3]
C.
Transfer of proceeds. In accordance with Section 638(c) of the Insurance
Company Law,[4] the insuring agent shall transfer from the insurance proceeds,
as security, to the Township Manager:
(1)
An amount in the aggregate of $2,000 for each $15,000 of a fire loss
claim and for each fraction thereof; however, if the amount of such
claim is $15,000 or less, the amount transferred to the Township shall
be $2,000.
(2)
If at a time of the 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 that is in an amount less
than the above formula, the insuring agent shall transfer to the Township
the amount specified in the estimate.
[4]
Editor's Note: See 40 P.S. § 638(c).
D.
Pro rata transfer. The transfer of proceeds shall be on a pro rata
basis by all companies, associations or exchanges insuring the damaged
building or structure.
E.
Post-transfer contractor's estimate. After the transfer of proceeds,
the named insured may submit a contractor's signed estimate of
the costs of removing, repairing or securing the damaged building
or other structure, and the Township Manager shall return the amount
of secured proceeds in excess of the estimate to the named insured,
if the Township has not otherwise commenced removing, repairing or
securing the damaged building or other structure.
F.
Accounting procedure for transferred proceeds. Upon receipt of security
under this section, the Township shall conform to the following procedure,
pursuant to Section 638(d) of the Insurance Company Law[5]:
(1)
The Township Manager shall place the proceeds in a separate fund
to be used solely as security against the total costs of removing,
repairing, or securing the damaged building or structure incurred
by the Township. Such costs shall include, without limitation, any
engineering, legal or administrative costs incurred by the Township
in connection with such removing, repairing or securing of the building
or any procedure related thereto.
(2)
When transferring the proceeds, it is the obligation of the insuring
agent to provide the Township with the name and address of the named
insured, whereupon the Township Manager shall contact the named insured,
certify that the proceeds have been received by the Township and notify
the named insured that the procedures under this section and Section
638(d) of the Insurance Company Law shall be followed.
(3)
The proceeds shall only be returned to the named owner upon the following
stated occurrences: the damaged building or other structure has been
properly repaired, removed or secured in accordance with all applicable
laws, regulations and requirements of the Township; the requisite
proof of such completion has been received by the Township Manager;
and the Township has not incurred any costs associated with repairing,
removing or securing the damaged building or other structure.
(4)
If the Township has incurred costs associated with repairing, removing
or securing the building or other structure, such costs shall be paid
from the secured funds. If excess funds remain, the Township Manager
shall transfer the remaining funds to the named insured.
(5)
Any interest earned on proceeds held by the Township that are not
returned to the named insured shall belong to the Township. Any interest
earned on proceeds that are returned to the named insured shall be
distributed to the named insured at the time said proceeds are returned.
[5]
Editor's Note: See 40 P.S. § 638(d).
G.
Township's ability to recover deficiency. Nothing in this Part
2 shall be construed to limit the ability of the Township to recover
any deficiency.
H.
Agreement with named insured. Nothing in this subsection shall be
construed to prohibit the Township and the named insured from entering
into an agreement which permits the transfer of funds to the named
insured if some other reasonable disposition of the damaged property
has been negotiated.
The Township Board of Supervisors may by resolution adopt procedures
and regulations to implement Section 638 of the Insurance Company
Law, as amended,[1] and this Part 2 and may by resolution fix reasonable fees to be charged for municipal activities or services provided pursuant to Section 638 of the Insurance Company Law, as amended, and this Part 2, 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 person, firm or corporation who shall violate any provision of this Part 2, upon conviction thereof in an action brought before a District Justice in the manner provided for the enforcement of summary offenses under the Pennsylvania Rules of Criminal Procedure, shall be sentenced to pay a fine of not less than $100 nor more than $1,000, plus costs, including reasonable attorney fees incurred by the Township, and, in default of payment of said fine and costs, to a term of imprisonment not to exceed 90 days. Each day that a violation of this Part 2 continues or each section of this Part 2 which shall be found to have been violated shall constitute a separate offense.
