Township of Shirley, PA Chapter 151 Insurance

[HISTORY: Adopted by the Board of Supervisors of the Township of Shirley as indicated in article histories. Amendments noted where applicable.]

Article I Fire Insurance Claims

[Adopted 8-28-2008 by Ord. No. 2008-4]

§ 151-1 Appointment of designated officer.

The Township Secretary or such official's designee is hereby appointed as the designated officer who is authorized to carry out all responsibilities and duties stated herein.

§ 151-2 Certificate required.

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 Shirley Township (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 the appropriate provisions of the Insurance Company Law of 1921,[1] as amended, and the provisions of this article.

[1] Editor's Note: See 40 P.S. § 341 et seq.

§ 151-3 Procedure for payment of claims.

A. The Municipal Treasurer shall, upon the written request of the named insured specifying the tax description of the property, name and address of the insuring agent and the date agreed upon by the insuring agent and the named insured as the date of the receipt of a loss report of the claim, furnish the insurance company, association or exchange either of the following within 14 working days of the request:

(1) 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 the property 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; or

(2) A certificate and bill showing the amount of delinquent taxes, assessments, penalties and user charges against the property as of the date specified in the request that have not been paid as of the date of the certificate and also showing, as of the date of the Treasurer's certificate, the amount of the total costs, if any, certified to the Treasurer that have been incurred by a municipality for the removal, repair or securing of a building or other structure on the property. For the purpose of this subsection, the municipality shall certify to the Treasurer the total amount, if any, of such costs. 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 municipality under applicable law.

B. Upon the receipt of a certificate pursuant to Subsection A(1) of this section, the insuring agent shall pay the claim of the named insured in accordance with the policy terms, unless the loss agreed to between 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 other structure. In the case of such a loss, the insuring agent, the insured property owner and the municipality shall follow the procedures set forth in Subsections D and E of this section.

C. Upon the receipt of a certificate and bill pursuant to Subsection A(2) of this section, the insuring agent shall return the bill to the Treasurer and transfer to the Treasurer an amount from the insurance proceeds necessary to pay the taxes, assessments, penalties, charges and costs as shown on the bill. The municipality shall receive the amount and apply or credit it to payment of the items shown in the bill.

D. When the loss agreed to between the named insured and the company, association or exchange equals or exceeds 60% of the aggregate limits of liability on all fire policies covering the building or other structure, the insuring agent shall transfer from the insurance proceeds to the designated officer of the municipality in the aggregate $2,000 for each $15,000 and 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, securing, or rebuilding the building or other structure in an amount less than the amount calculated under the foregoing transfer formula, the insuring agent shall transfer from the insurance proceeds the amount specified in the estimate. The transfer of proceeds shall be on a pro rata basis by all companies, associations or exchanges insuring the building or other structure. Policy proceeds remaining after the transfer to the municipality shall be disbursed in accordance with the policy terms. The named insured may submit a contractor's signed estimate of the costs of removing, repairing, securing, or rebuilding the building or other structure after the transfer, and the designated officer shall return the amount of the fund in excess of the estimate to the named insured if the municipality has not commenced to remove, repair or secure the building or other structure. This subsection only applies to municipalities that have adopted an ordinance authorizing the procedure described in Subsections D and E of this section and applies only to fire losses that occur after the adoption of the ordinance. The ordinance shall designate the officer authorized to carry out the duties of this section.

E. Upon receipt of proceeds by the municipality as authorized by this section, the designated officer shall place the proceeds in a separate fund to be used solely as security against the total cost of removing, repairing or securing incurred by the municipality. When transferring the funds as required in this article, an insuring agent shall provide the municipality with the name and address of the named insured, whereupon the municipality 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. The funds shall be returned to the named insured when repairs, removal or securing of the building or structure have been completed and the required proof received by the designated officer if the municipality has not incurred any costs for repairs, removal, securing, or rebuilding. 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. Nothing in this section shall be construed to limit the ability of a municipality to recover any deficiency. Further, nothing in this subsection 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. In the event that the owner or builder does not intend to rebuild or repair the building or other structure, the escrowed funds shall be paid to the insured upon completion of the process of removing and/or securing the property. In the event that the owner or builder intends to rebuild or repair the building or other structure, the escrowed funds shall not be paid to the insured until a certificate of occupancy has been issued. The Township may from time to time adopt a policy as to this process.

F. Proof of payment by the insuring agent of proceeds under a policy in accordance with Subsection D of this section is conclusive evidence of the discharge of its obligation to the insured under the policy to the extent of the payment and of compliance by the insuring agent with Subsection D of this section.

G. Nothing in this section shall be construed to make an insuring agent liable for any amount in excess of proceeds payable under its insurance policy or for any other act performed pursuant to this section or to make a municipality or public official an insured under a policy of insurance or to create an obligation to pay delinquent property taxes or unpaid removal liens or expenses other than as provided in this section.

H. An insuring agent making payments of policy proceeds under this section for delinquent taxes or structure removal liens or removal expenses under this section for delinquent taxes or structure removal liens or removal expenses incurred by a municipality shall have a full benefit of such payment, including all rights of subrogation and of assignment.

§ 151-4 Adoption of procedures and fees.

The Township Board of Supervisors may by resolution adopt procedures and regulations to implement the Insurance Company Law of 1921[1] and this article and may by resolution fix reasonable fees to be charged for municipal activities or services provided pursuant to the Insurance Company Law of 1921 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. § 341 et seq.

§ 151-5 Violations and penalties.

Any owner of property, any named insured or any insuring agent who violates this article shall be subject to a penalty of up to $1,000 per violation.