[HISTORY: Adopted by the Borough Council of the Borough of
Etna as indicated in article histories. Amendments noted where applicable.]
[Adopted 10-20-1998 by Ord. No. 1257]
A.
The Borough Secretary/Manager or such official's designee is
hereby appointed as the designated officer who is authorized to carry
out all responsibilities and duties of the Borough of Etna stated
herein.
B.
A "fire loss" or claim for fire damage is defined as any loss occurring
after the effective date of this article and covered under a policy
of fire insurance, including any endorsements or riders to the policy.
A.
No insurance company, association or exchange (hereinafter the "insurer")
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 Etna where the amount recoverable for the fire loss to
the structure under all policies exceeds $7,500, unless the insurer
is furnished by the municipal officer with a municipal certificate
pursuant to Section 508(b) and unless there is compliance with Section
508(c) and (d) and the provisions of this article.[1]
[1]
Editor's Note: Reference is to Section 508 of the Insurance
Company Law of 1921, as added by Act 98 of 1992 and amended Act 93
of 1994; see 40 P.S. § 638.
B.
After full compliance with the requirements of Section 508(b)(1)(i),
the insurer shall pay the claim of the named insured; provided, however,
that if the loss as agreed upon by the named insured and the insurer
equals or exceeds 60% of the aggregate limits of liability on all
fire policies covering the building structure, the following procedures
shall be followed:
(1)
The insurer shall transfer from the insurance proceeds to the Borough
Secretary/Manager or such official's designee the aggregate of
$2,000 for each $15,000 of a claim and for each fraction of that amount
of a claim, provided:
(a)
That this article is to be applied such that, if the claim is
$15,000 or less, the amount transferred to the Borough of Etna shall
be $2,000; and
(b)
That, 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 insurer shall transfer to the Borough of Etna from the insurance
proceeds the amount based upon the estimate.
(2)
The transfer of proceeds shall be on pro rata basis by all companies,
associations or exchanges insuring the building or other structure.
Policy proceeds remaining after the transfer to the Borough of Etna
shall be disbursed in accordance with the policy terms.
C.
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 Borough Secretary/Manager or
such official's designee shall return the amount of the funds
transferred to the Borough of Etna in excess of the estimate to the
named insured if the Borough of Etna has not commenced to remove,
repair or secure the building or other structure.
D.
Upon receipt of proceeds under this article, the Borough of Etna
shall do the following:
(1)
The Secretary/Manager or such official's designee shall place
the proceeds in the 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 Borough of Etna. Such costs shall
include, without limitation, any engineering, legal or administrative
costs incurred by the Borough of Etna in connection with such removal,
repair or securing of the building or any proceedings related thereto;
and
(2)
It is the obligation of the insurer when transferring the proceeds
to provide the Borough of Etna with the name and address of the named
insured. Upon receipt of the transferred funds and the name and address
of the named insured, the Borough Secretary/Manager or such official's
designee shall contact the named insured, certify that the proceeds
have been received by the Borough of Etna, and notify the named insured
that the procedures under this subsection shall be followed; and
(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 Borough of Etna and the required proof of such completion
received by the Borough Secretary/Manager or such official's
designee, and if the Borough of Etna has not incurred any costs for
repairs, removal or securing, the funds shall be returned to the named
insured. If the Borough of Etna 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 Borough of Etna
shall transfer the remaining funds to the named insured; and
(4)
To the extent that interest is earned on proceeds held by the Borough
of Etna pursuant to this article and retained by it, such interest
shall belong to the Borough of Etna. 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 article shall be construed to limit the ability
of the Borough of Etna to recover any deficiency. Furthermore, nothing
in this article shall be construed to prohibit the Borough of Etna
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 Council of the Borough of Etna may by resolution adopt procedures
and regulations to implement Section 508[1] and this article and may by resolution fix reasonable
fees to be charged for municipal activities or services provided pursuant
to Section 508 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. § 638.
Any owner of property, any named insured or any insurer who
violates this article shall be subject to a penalty of up to $1,000
per violation.
The provisions of this article shall be severable and, if any
of the provisions hereof shall be held to be invalid or unenforceable,
the remaining provisions of this article shall remain in effect.
Ordinance No. 1225, adopted 12-15-1992, is repealed. All ordinances
or parts of ordinances conflicting with any of the provisions of this
article are hereby repealed insofar as same affects this article.
