[Adopted 2-14-1995 by Ord. No. 377 (Ch.
65 of the 1975 Code)]
Pursuant to the Act of July 9, 1992, (P.L. 678.
No. 98) Section 1, as amended in October 1994, the Fire Insurance
Escrow Law, the Borough of Danville hereby adopts the procedure prescribed
in that Act, which amends Section 508 of the Insurance Company Law
of 1921, Act of May 17, 1921 (P.L. 682, No. 284), to provide for payment of certain fire loss claims to
municipalities.
The Secretary of the Borough of Danville is
hereby appointed as the designated officer who is authorized to carry
out the duties of this chapter.
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 within the Borough of Danville (hereinafter
the "municipality") 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 Municipal Treasurer with a municipal certificate
pursuant to Section 508(b) of the Insurance Company Law of 1921, as amended by Act
No. 98 of 1992, and as amended in October 1994 and unless there is
compliance with Section 508(c) and (d), as amended by Act No. 98 of 1992, and amended in October
1994 and the provisions of this chapter.
Where, pursuant to Section 508(b)(1)(i), as amended, the Municipal Treasurer issues to the insuring
agent a certificate or, at the discretion of the municipality, a verbal
notification which shall be confirmed in writing by the insurer to
the effect that, as of the date specified in the request, there are
no delinquent taxes, assessments, penalties or user charges against
real property, including delinquencies to the municipality, the County
of Montour, the Danville Area School District and the Danville Municipal
Authority and that, as of the date of the Treasurer's certificate
or verbal notification, no municipality has certified any amount as
total costs incurred by the municipality for the removal, repair or
securing of a building or other structure on the property. The insuring
agent shall pay the claim of the named insured; provided, however,
that 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 building restructure, the following
procedures must be followed:
A. The insuring agent shall transfer from the insurance
proceeds to the designated officer of the municipality in the aggregate
of $2,000 for each $15,000 of a claim and for each fraction of that
amount of a claim, or, if at the time of a 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 in an amount
less than the amount calculated under the foregoing transfer formula,
the insurance company, association or exchange shall transfer from
the insurance proceeds the amount specified in the estimate.
B. 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 municipality from the insurance proceeds the amount
specified in the estimate.
C. The transfer of proceeds shall be on pro rata basis
by all companies, associations or exchanges insuring the building
or other structure.
D. 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 municipality
in excess of the estimate to the named insured, if the municipality
has not commenced to remove, repair or secure the building of other
structure.
E. Upon receipt of proceeds under this section, the municipality
shall do the following:
(1) The designated officer 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 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;
(2) 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 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;
(3) When repairs, removal or securing of the building
or other structure have 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 fund 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 funds, and if
excess funds remain, the municipality shall transfer the remaining
funds to the named insured; and
(4) To the extent that interest is earned on proceeds
held by the municipality pursuant to this section, 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.
F. 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.
The Borough Council may by resolution adopt
procedures and regulations to implement Act 98 of 1992, as amended
in October 1994, and this chapter and may, by resolution, fix reasonable
fees to be charged for municipal activities or services provided pursuant
to Act 98 of 1992, as amended in October 1994, and this chapter, including
but not limited to issuance of certificates and bills, performance
of inspections and opening separate fund accounts.
Any owner of property, any named insured or
any insuring agent who violates this chapter shall be subject to a
penalty of up to $1,000 per violation.