[HISTORY: Adopted by the Borough Council of the Borough of Danville as indicated in article histories. Amendments noted where applicable.]
[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:
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.
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.
The transfer of proceeds shall be on pro rata basis by all companies, associations or exchanges insuring the building or other structure.
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.
Upon receipt of proceeds under this section, the municipality shall do the following:
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;
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;
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
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.
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.
Editor's Note: See 40 P.S. § 638(b)(1)(i).
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.