[Adopted 8-18-2021 by Ord. No. 662-2021]
The Borough, through the provisions of this article, hereby incorporates the provisions of Section 638 of the Insurance Company Law, 40 P.S. § 638, as amended ("Insurance Company Law''), which provides the Borough with the authority to require security in the form of insurance proceeds from an insurance company, association, or exchange ("insuring agent''), doing business in Pennsylvania, for the removal, repair, and security of fire-damaged buildings and other structures subject to fire loss claims.
The Borough Treasurer, or such official's designee, shall be the designated officer authorized to carry out all responsibilities and duties stated herein. Any reference to "Borough Treasurer" or "Treasurer" shall be defined to include the Treasurer and/or the Treasurer's official designee.
No insuring agent 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 insuring agent has requested and been furnished with a municipal certificate from the Borough Treasurer pursuant to Section 638(b) of the Insurance Company Law[1] ("certificate''), unless there is compliance with the provisions of this article.
[1]
Editor's Note: See 40 P.S. § 638(b).
A. 
In the event there are delinquent taxes, assessments, penalties or other charges (collectively, "municipal claims") against the property on which the fire loss was suffered (the "property''), or there are expenses incurred by the Borough for costs of removal, repair, or securing of any structure on the property (collectively, "municipal expenses''), the Borough Treasurer shall immediately render a bill for such municipal claims and municipal expenses, if not already done. For purposes of this article, taxes, assessments, penalties and other charges shall be deemed delinquent as of the date a lien could have been filed against the property for such claims under applicable law.
B. 
Certificate.
(1) 
Upon receipt of a written request from the named insured specifying the description of the property, the name and address of the insuring agent, and the date of receipt by the insuring agent of a loss report of the claim, or at the discretion of the Borough Treasurer, upon verbal notification confirmed, in writing, by the insuring agent, the Borough Officer shall furnish to the insuring agent, within 14 working days after receipt of such request, a certificate either:
(a) 
Stating that there are no unpaid municipal claims or municipal expenses against the property; or
(b) 
Specifying the nature and amount of any unpaid municipal claims or municipal expenses against the property and accompanied by a bill for such amounts.
(2) 
Subject to the provisions of § 122-7D below, upon receipt of a certificate pursuant to § 122-7B(1)(a) above, the insuring agent shall pay the claim of the named insured in accordance with the applicable policy terms; upon receipt of a certificate and a bill pursuant to § 122-7B(1)(b) above, the insuring agent shall transfer to the Borough Officer from the applicable insurance proceeds an amount sufficient to pay said bill prior to making payment to the named insured.
C. 
Notwithstanding the provisions of § 122-7B(2) above, if the loss 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 damaged structure, the following procedures shall be followed:
(1) 
The insuring agent shall transfer from the insurance proceeds to the Borough Treasurer, in the aggregate, $2,000 for each $15,000 of such claim or fraction thereof.
(2) 
If, in addition to the loss report submitted by the named insured to the insuring agent, the named insured has submitted to the insuring agent a contractor's signed estimate of the costs of removing, repairing or securing the structure in an amount less than the amount calculated under the transfer formula set forth in § 122-7C(1) above, the insuring agent shall transfer from the insurance proceeds only the amount specified in such estimate.
(3) 
If more than one insuring agent has insured the damaged structure, the transfer of proceeds described in this Subsection C shall be on a pro rata basis by all such insuring agents.
(4) 
When transferring funds as required in § 122-7C(1) through (3), each insuring agent shall provide the Borough with the name and address of the named insured.
(5) 
Upon receipt of the portion of insurance proceeds described in § 122-7C(1) or (2) above, the Borough Treasurer shall take the following actions:
(a) 
Place said proceeds in a separate fund to be used solely as security against the total municipal expenses anticipated by the Borough for the removal, repair or securing of the damaged structure, including, without limitation, any engineering, legal or administrative costs incurred by the Borough in connection therewith or proceedings related thereto.
(b) 
Mail to the named insured at the address provided by the insuring agent a notice that the proceeds have been received by the Borough and that the procedures outlined in this article shall be followed.
(c) 
If the named insured submits to the Borough a contractor's signed estimate of the costs of removing, repairing or securing the structure in an amount less than said proceeds, return to the named insured the amount of such proceeds in excess of the amount required to pay municipal expenses, provided that the Borough Treasurer, in consultation with the Borough Building Inspector and/or the Borough Engineer, deems such estimate to be reasonable, and provided further that the Borough has not commenced the removal, repair or securing of the structure, in which case the Borough shall complete such work.
(d) 
Reimburse the Borough for the municipal expenses paid by the Borough.
(e) 
Transfer the remaining balance of such proceeds, without interest, to the named insured after certifying that the removal, repair or securing of the structure has been completed in accordance with all applicable Borough ordinances and regulations.
(f) 
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.
(g) 
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 Borough Treasurer shall return the amount of secured proceeds in excess of the estimate to the named insured, if the Borough has not otherwise commenced removing, repairing, or securing the damaged building or other structure.
(6) 
Borough's ability to recover deficiency. Nothing in this article shall be construed to limit the ability of the Borough to recover any deficiency.
(7) 
Agreement with named insured. Nothing in this subsection shall be construed to prohibit the Borough 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.