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.
As used in this chapter, the following terms shall have the
meanings indicated:
BOROUGH
The Borough of Middletown, Dauphin County, Pennsylvania.
FINANCE DIRECTOR
The Finance Director of the Borough of Middletown, Dauphin
County, Pennsylvania.
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.
[Amended 12-1-2020 by Ord. No. 1373, approved 12-1-2020]
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 $7,500, 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.
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:
A. The
insuring agent shall transfer from the insurance proceeds to the Borough
in the aggregate of $2,000 for each $15,000 of a claim and for each
fraction of that amount of a claim, this section to be applied such
that if the claim is $15,000 or less, the amount transferred to the
Borough shall be $2,000.
[Amended 12-1-2020 by Ord. No. 1373, approved 12-1-2020]
B. 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.
C. The
transfer of proceeds shall be on a pro rata basis by all insuring
agents insuring the building or other structure.
D. 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.
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.