[HISTORY: Adopted by the Borough Council of the Borough of Trafford 6-11-2002
by Ord. No. 686. Amendments noted where applicable.]
This chapter may be known and cited as the "Fire Insurance Escrow Ordinance."
The Commonwealth of Pennsylvania has enacted Act 93 of 1994, effective
January 11, 1995, which further amends the Insurance Company Law of 1921,
as amended,[1] to provide procedures for payment of certain fire loss claims.
The Council of the Borough of Trafford finds it necessary and advisable, and
declares the purpose of this chapter to be, to deter the commission of arson
and related crimes, to discourage the abandonment of property, to prevent
urban blight and deterioration and to provide for the collection of delinquent
municipal taxes, assessments, penalties and user charges against real estate
by adopting this chapter to provide for the payment of proceeds from certain
fire loss claims to the Borough.
[1]
Editor's Note: See 40 P.S. § 341 et seq.
The Borough Administrator or his or her designee is hereby appointed
as the designated officer who is authorized to carry out all responsibilities
and duties stated herein.
No insurance company, association or exchange (hereinafter the "insuring
agent") doing business in the Commonwealth of Pennsylvania shall pay a claim
of a named insured for fire damage to a structure located with the Borough
of Trafford (hereinafter the "borough") where the amount recoverable for the
fire loss to the structure under all policies exceeds $7,500, unless the insuring
agent is furnished by the Financial officer with a municipal certificate within
14 working days of a request for same, pursuant to Section 508(b) of Act 93
of 1994 and unless there is compliance with Section 508(c) and (d) of Act
93 of 1994 and the provisions of this chapter.[1]
[1]
Editor's Note: See 40 P.S. § 638.
A.
Where, pursuant to Section 508(b)(1)(ii) of Act 93 of
1994, 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 against shall
transfer to the Financial Officer an amount from the insurance proceeds necessary
to pay the taxes, assessments, penalties, charges and costs as shown on the
bill, which amount shall be applied or credited by the city to payment of
the items shown the bill. A tax, assessment, penalty or user charge becomes
delinquent at the time and on the date a lien could otherwise have been filed
against the property by the city under applicable law.
B.
Where, pursuant to Section 508(b)(1)(i) of Act 93 of
1994, the Financial Officer issues a certificate or, at the discretion of
the Borough, a verbal notification which shall be confirmed in writing by
the insured, to the effect that there are no delinquent taxes, assessments,
penalties or user charges against the 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 policies covering the building
or structure, the following procedures must be followed. Amount to be transferred:
(1)
The insuring agent shall transfer from the insurance
proceeds to the designated officer of the city in the aggregate of $2,000
for each $15,000, and each fraction of that amount, of a claim; or
(2)
If, at the time of a loss report, the named insured or
insuring agent 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.
The Borough Council may by resolution adopt procedures and regulations
to implement Act 93 of 1994 and this chapter and may by said fee schedule
fix reasonable fees to be charged for Borough activities or services provided
pursuant to Act 93 of 1994 and this chapter; including but not limited to
issuance of certificates and bills, performance of inspections and ongoing
separate fund account.
[Amended 5-10-2005 by Ord. No. 702]
Any owner of property, any named insured or any insuring agent who violates
this chapter shall be subject to a penalty of not less than $100 nor more
than $1,000 per violation.
