[HISTORY: Adopted by the Borough Council of the Borough of
Middletown 5-3-1993 by Ord. No.
1041, approved 5-3-1993. Amendments noted where applicable.]
The Commonwealth of Pennsylvania has enacted Act 98 of 1992,
effective on September 7, 1992, amending the Insurance Company Law
of 1921 to provide procedures for the payment of certain fire loss
claims. It is the purpose of said legislation to deter the commission
of arson and related crimes, to discourage the abandonment of property
and to prevent urban blight and deterioration. The Borough Council
desires to adopt an ordinance pursuant to Section 508 of the Insurance
Company Law of 1921[1] to provide for the payment of proceeds from certain fire
loss claims to the Borough of Middletown, Pennsylvania, and to this
end, the Council enacts this chapter.
[1]
Editor's Note: See 40. P.S. § 638.
As used in this chapter, the following terms shall have the
meanings indicated:
The Borough of Middletown, Dauphin County, Pennsylvania.
The Code Enforcement Officer of the Borough of Middletown,
Dauphin County, Pennsylvania.
The Finance Director of the Borough of Middletown, Dauphin
County, Pennsylvania.
Any insurance company, association or exchange.
The person or persons who are insured for the building or
structure where the fire occurred.
The Code Enforcement Officer or his designee is hereby appointed
as the designated person who is authorized to carry out all responsibilities
and duties stated herein.
[Amended 12-1-2020 by Ord. No. 1373, approved 12-1-2020]
No insuring agency 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
named insured or insuring agent is furnished by the Finance Director
with a municipal certificate pursuant to Section 508(b) of Act 98
of 1992[1] and unless there is compliance with Section 508(c) and
(d) of Act 98 of 1992 and the provisions of this chapter.
[1]
Editor's Note: See 40 P.S. § 638.
Pursuant to Section 508(b)(1)(i) of Act 98 of 1992,[1] the Finance Director shall issue a certificate indicating
that there are no delinquent taxes, assessments, penalties or user
charges against real property, and the insuring agent shall pay the
claim of the named insured; provided, however, that if the loss that
is agreed upon by the named insured and the insuring agent equals
or exceeds 60% of the aggregate limits of liability on all fire polices
covering the building restructure, the following procedures must be
followed:
A.Â
The
insuring agent shall transfer from the insurance proceeds to the Borough
in the aggregate of $2,000 for each $15,000 of a claim and for each
fraction of that amount of a claim, this section to be applied such
that if the claim is $15,000 or less, the amount transferred to the
Borough shall be $2,000.
[Amended 12-1-2020 by Ord. No. 1373, approved 12-1-2020]
B.Â
If,
at the time of a proof of loss agreed to between the named insured
and the insuring agent, the named insured has submitted a contractor's
signed estimate of the costs of removing, repairing or securing the
building or other structure, the insuring agent shall transfer to
the Borough from the insurance proceeds the amount specified in the
estimate.
C.Â
The
transfer of proceeds shall be on a pro rata basis by all insuring
agents insuring the building or other structure.
D.Â
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 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.
[1]
Editor's Note: See 40 P.S. § 638(b)(1)(i).
A.Â
Upon receipt of proceeds under § 24-5, the Borough shall do the following:
(1)Â
The Finance Director shall place the proceeds in a 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)Â
It is the obligation of the insuring agent 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 name and address
of the named insured, the designated officer 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)Â
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 Code Enforcement Officer, and if the Borough has not
incurred any costs for repairs, removal or securing, the fund shall
be returned to the named insured. If the Borough 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 Borough shall transfer the remaining funds to the named insured.
B.Â
To
the extent that interest is earned on proceeds held by the Borough
pursuant to this section and not returned to the named insured, 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.
Nothing in this section shall be construed to limit the ability
of the Borough to recover any deficiency. Furthermore, nothing in
this section shall be construed to prohibit the Borough and the named
insured from entering an agreement that permits the transfer of funds
to the named insured of some other reasonable disposition of the damaged
property has been negotiated.
Any owner of property, any named insured or any insuring agent
violating the provisions of this chapter shall, upon conviction, be
fined not less than $100 per offense nor more than $1,000 per offense,
plus costs of prosecution, and, in default of payment thereof, shall
be imprisoned for not more than 90 days.
