Borough of Old Forge, PA
Lackawanna County
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Table of Contents
Table of Contents
[HISTORY: Adopted by the Borough Council of the Borough of Old Forge as indicated in article histories. Amendments noted where applicable.]
[Adopted 4-18-1995 by Ord. No. 1995-4]

§ 198-1 Title.

This article may be known and cited as the "Fire Insurance Escrow Ordinance."

§ 198-2 Designated officer.

The Borough Manager or his designee is hereby appointed as the designated officer who is authorized to carry out all responsibilities and duties stated herein.

§ 198-3 Restrictions on claim payments. [1]

No insurance company, association or exchange (hereinafter the "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 of Old Forge (hereinafter the "municipality") 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 Municipal Treasurer with a municipal certificate pursuant to Section 508(b) of Act 98 of 1992, and unless there is compliance with Section 508(c) and (d) of Act 98 of 1992[2] and the provisions of this article.
[1]
Editor's Note: Amended at time of adoption of Code (see Ch. 1, General Provisions, Art. I).
[2]
Editor's Note: See 40 P.S. § 638(b), (c) and (d).

§ 198-4 Procedure for payment of claims.

A. 
Where, pursuant to Section 508(b)(1)(ii) of Act 98 of 1992,[1] the Financial Officer issues a certificate and bill for delinquent taxes, assessments, penalties and user charges against the property and also the total costs, if any, incurred by the Borough for the removal, repair or securing of a building or other structure on the property, the insuring agent shall transfer to the Financial Officer an amount from the insurance proceeds necessary to pay taxes, assessments, penalties, charges and costs as shown on the bill, which amount shall be applied or credited by the Borough to payment of the items shown on the bill.
[1]
Editor's Note: See 40 P.S. § 638(b)(1)(ii).
B. 
Where, pursuant to Section 508(b)(1)(i) of Act 98 of 1992,[2] the Financial Officer issues a certificate indicating that there are no delinquent taxes, assessments, penalties or user charges against real property, 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 polices covering the building or structure, the following procedures must be followed:
(1) 
Amount to be transferred.[3]
(a) 
The insuring agent shall transfer from the insurance proceeds to the designated officer of the Borough in the aggregate of $2,000 for each $15,000, and each fraction of that amount, of a claim; or
(b) 
If, at the time of a loss report 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, in an amount less than the amount calculated under the foregoing transfer formula, the insuring agent shall transfer to the Borough from the insurance proceeds the amount specified in the estimate.
[3]
Editor's Note: Amended at time of adoption of Code (see Ch. 1, General Provisions, Art. I).
(2) 
The transfer of proceeds shall be on a pro-rata basis by all companies, associations or exchanges insuring the building or other structure.
(3) 
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.
(4) 
Upon receipt of proceeds under this subsection, the municipality shall do the following:
(a) 
The designated 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 currently 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 proceedings related thereto.
(b) 
It is the obligation of the insuring agent, 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 designated 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.
(c) 
When repairs, removal or securing of the building or other structure has been completed in accordance with all applicable regulations and orders of the municipality and the required proof of such completion received by the designated officer, and if the municipality has not incurred any costs for repairs, removal or securing, the funds 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.
(d) 
To the extent that interest is earned on proceeds held by the municipality pursuant to this subsection and not returned to the named insured, 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.
[2]
Editor's Note: See 40 P.S. § 638(b)(1)(i).
C. 
Nothing in this section shall be construed to limit the ability of the municipality to recover any deficiency. Furthermore, nothing in this section 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.

§ 198-5 Adoption of procedures and regulations; fees.

The Borough of Old Forge may, by resolution, adopt procedures and regulations to implement Act 98 of 1992[1] and this article and may, by resolution, fix reasonable fees to be charged for municipal activities or services provided pursuant to 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.

§ 198-6 Violations and penalties. [1]

Any owner of property, any named insured or any insuring agency who or which violates this article shall be subject to a penalty of up to $1,000 per violation, plus costs of prosecution, and, in default of payment of such fine and costs, to imprisonment for not more than 30 days.
[1]
Editor's Note: Amended at time of adoption of Code (see Ch. 1, General Provisions, Art. I).