[HISTORY: Adopted by the Borough Council of the Borough of Middletown 5-3-1993 by Ord. No. 1041, approved 5-3-1993. Amendments noted where applicable.]
The Commonwealth of Pennsylvania has enacted Act 98 of 1992, effective on September 7, 1992, amending the Insurance Company Law of 1921 to provide procedures for the payment of certain fire loss claims. It is the purpose of said legislation to deter the commission of arson and related crimes, to discourage the abandonment of property and to prevent urban blight and deterioration. The Borough Council desires to adopt an ordinance pursuant to Section 508 of the Insurance Company Law of 1921 to provide for the payment of proceeds from certain fire loss claims to the Borough of Middletown, Pennsylvania, and to this end, the Council enacts this chapter.
Editor's Note: See 40. P.S. § 638.
As used in this chapter, the following terms shall have the meanings indicated:
- The Borough of Middletown, Dauphin County, Pennsylvania.
- CODE ENFORCEMENT OFFICER
- The Code Enforcement Officer of the Borough of Middletown, Dauphin County, Pennsylvania.
- FINANCE DIRECTOR
- The Finance Director of the Borough of Middletown, Dauphin County, Pennsylvania.
- INSURING AGENT
- Any insurance company, association or exchange.
- NAMED INSURED
- The person or persons who are insured for the building or structure where the fire occurred.
The Code Enforcement Officer or his designee is hereby appointed as the designated person who is authorized to carry out all responsibilities and duties stated herein.
No insuring agency 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 where the amount recoverable for the fire loss to the structure under all policies exceeds $5,000, unless the named insured or insuring agent is furnished by the Finance Director with a municipal certificate pursuant to Section 508(b) of Act 98 of 1992 and unless there is compliance with Section 508(c) and (d) of Act 98 of 1992 and the provisions of this chapter.
Editor's Note: See 40 P.S. § 638.
Pursuant to Section 508(b)(1)(i) of Act 98 of 1992, the Finance Director shall issue a certificate indicating that there are no delinquent taxes, assessments, penalties or user charges against real property, and the insuring agent shall pay the claim of the named insured; provided, however, that if the loss that is agreed upon by the named insured and the insuring agent equals or exceeds 60% of the aggregate limits of liability on all fire polices covering the building restructure, the following procedures must be followed:
The insuring agent shall transfer from the insurance proceeds to the Borough in the aggregate of $1,000 for each $20,000 of a claim and for each fraction of that amount of a claim, this section to be applied such that if the claim is $20,000 or less, the amount transferred to the Borough shall be $1,000.
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 Borough from the insurance proceeds the amount specified in the estimate.
The transfer of proceeds shall be on a pro rata basis by all insuring agents 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 funds transferred to the Borough in excess of the estimate to the named insured, if the Borough has not commenced to remove, repair or secure the building or other structure.
Editor's Note: See 40 P.S. § 638(b)(1)(i).
Upon receipt of proceeds under § 24-5, the Borough shall do the following:
The Finance Director 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 Borough. Such costs shall include, without limitation, any engineering, legal or administrative costs incurred by the Borough 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 Borough 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 designated officer shall contact the named insured, certify that the proceeds have been received by the Borough 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 Borough and the required proof of such completion received by the Code Enforcement Officer, and if the Borough has not incurred any costs for repairs, removal or securing, the fund shall be returned to the named insured. If the Borough 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 Borough shall transfer the remaining funds to the named insured.
To the extent that interest is earned on proceeds held by the Borough pursuant to this section and not returned to the named insured, such interest shall belong to the Borough. 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 Borough to recover any deficiency. Furthermore, nothing in this section shall be construed to prohibit the Borough and the named insured from entering an agreement that permits the transfer of funds to the named insured of some other reasonable disposition of the damaged property has been negotiated.
Any owner of property, any named insured or any insuring agent violating the provisions of this chapter shall, upon conviction, be fined not less than $100 per offense nor more than $1,000 per offense, plus costs of prosecution, and, in default of payment thereof, shall be imprisoned for not more than 90 days.