[HISTORY: Adopted by the Borough Council of the Borough of
Whitaker as indicated in article histories. Amendments noted where
applicable.]
[Adopted 6-8-2005 by Ord.
No. 1-2005]
This article may be known and cited as the "Whitaker Borough
Fire Insurance Escrow Ordinance."
As used in this article, the following terms shall have the
meanings indicated, unless a different meaning clearly appears from
the context:
Section 638 of the Insurance Company Law of 1921, 40 P.S.
§ 638 (1999), as amended.
The Borough of Whitaker.
The Borough official named in § 202-3 herein to carry out all the duties and responsibilities as stated in this article and as provided under Act 93 of 1994.
A separate bank account established in the name of the Borough
and an escrow agent which is returned to the Borough or to a third
party upon fulfillment of escrow conditions.
The person who obtains or is otherwise covered by insurance
on his/her property.
An insurance company, association or exchange doing business
in the Commonwealth of Pennsylvania.
The Borough Secretary or the Borough Secretary's designee is
hereby appointed as the "Designated Officer" who is authorized to
carry out all the duties and responsibilities stated herein and as
provided under Act 93 of 1994. The Designated Officer also shall carry
out all the duties and responsibilities to be performed by the Municipal
Treasurer as stated in Act 93 of 1994.
No insuring agent shall pay a claim of an insured for fire damage
to a building or other structure located within the Borough where
the amount recoverable for the fire loss to the building or structure
under all policies exceeds $7,500, unless: 1) the insuring agent is
furnished by the Designated Officer with a municipal certificate within
14 working days of a request for the issuance of a municipal certificate
pursuant to Section 638(b) of Act 93 of 1994; and 2) there has been
compliance with Sections 638(c) and (d) of Act 93 of 1994[1] and the provisions of this article.
[1]
Editor's Note: See 40 P.S. § 638(b), (c) and (d),
respectively.
A.
Where the Designated Officer issues a certificate and bill pursuant
to Section 638(b)(1)(ii) of Act 93 of 1994[1] 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 agent shall transfer
to the Designated 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 Borough
to payment of the items shown on 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 Borough
under applicable law.
[1]
Editor's Note: See 40 P.S. § 638(b)(1)(ii).
B.
Where the Designated Officer issues a certificate or, at the discretion
of the Borough, a verbal notification pursuant to Section 638(b)(1)(i)
of Act 93 of 1994, 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 Insured; provided, however, that if the loss as agreed
upon by the 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:
(1)
Amount to be transferred.
(a)
The insuring agent shall transfer from the insurance proceeds
to the Designated Officer of the Borough in the aggregate of $2,000
for each $15,000 and each fraction of that amount of a claim; or
(b)
If, at the time of a loss report, the 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.
(2)
Pro rata distribution; compliance with policy terms.
(3)
Establishment of escrow account.
(a)
Upon receipt of proceeds by the Borough, the Designated Officer shall place the proceeds in an escrow account to be used solely as security against the total cost of removing, repairing or securing incurred by the Borough. When transferring the funds as required by Subsection B in this section of this chapter and Section 638(c) of Act 93 of 1994,[2] an insuring agent shall provide the Borough with the name and address of the insured, whereupon the Borough shall contact the insured, certify that the proceeds have been received by the Borough and notify the insured that the procedures under Subsection B in this section of this chapter and Section 638(c) of Act 93 of 1994 shall be followed. The funds in the escrow account shall be returned to the insured when the repairs, removal or securing of the building or other structure have been completed and the required proof received by the Designated Officer if the Borough has not incurred any costs for repairs, removal or securing. If the Borough has incurred costs for repairs, removal or securing of the building or other structures, the costs shall be paid from the escrow account, and, if any excess funds remain, the Borough shall transfer the remaining funds to the insured.
[2]
Editor's Note: See 40 P.S. § 638(c).
(4)
Recovery of deficiencies; other agreements. Nothing in this section
shall be construed to prohibit the Borough to recover any deficiency.
Further nothing in this section shall be construed to prohibit the
Borough and the insured from entering into an agreement that permits
the transfer of funds to the 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 94 of 1994 and this article and may by ordinance
fix reasonable fees to be charged for municipal activities or services
provided pursuant to Act 94 of 1994 and this article, including but
not limited to issuance of certificates and bills, performance of
inspections and opening escrow accounts.
[Amended at time of adoption of Code (see Ch. 1, General
Provisions, Art. I)]
Any person who violates or permits a violation of this article
shall, upon conviction in a summary proceeding under the Pennsylvania
Rules of Criminal Procedure, be guilty of a summary offense and shall
be punishable by a fine of not more than $1,000, plus court costs
and reasonable attorneys' fees incurred by the Borough in the enforcement
proceedings. Upon judgment against any person by summary conviction,
or by proceedings by summons on default of the payment of the fine
or penalty imposed and the costs, the defendant may be sentenced and
committed to the Borough correctional facility for a period not exceeding
10 days or to the county correctional facility for a period not exceeding
30 days. Each day that such violation exists shall constitute a separate
offense, and each section of this article that is violated shall also
constitute a separate offense. In addition to or in lieu of enforcement
under this section, the Borough may enforce this article in equity
in the Court of Common Pleas of Allegheny County.
The Designated Officer shall file a certified copy of this article
with the Pennsylvania Department of Community and Economic Development
or its successor department.
