[HISTORY: Adopted by the Council of the Borough of West Chester 11-18-1992
as Ord. No. 19-1992. Amendments noted where applicable.]
This chapter shall be known as the "Borough of West Chester Fire Insurance
Escrow Ordinance."
For the purposes of this chapter, the following terms shall have the
meanings indicated:
Only individuals, partnerships or associations of individuals authorized
to engage in the business of insurance in the Commonwealth of Pennsylvania
as insurers on the Lloyd's Plan.
Includes all policies that provide insurance against direct loss
to real property or tangible personal property at a fixed location caused
by perils defined and limited in the standard fire policy prescribed and set
forth in Section 506 of the Insurance Company Law of 1921, and in the Extended
Coverage Section Endorsement approved by the Insurance Commissioner pursuant
to Section 354 of the Insurance Company Law of 1921[1] and such vandalism, malicious mischief, burglary, theft or other
such classes of insurance as may be determined by the Insurance Commissioner,
but shall not include insurance on motor vehicle, farm or such manufacturing
risks as may be excluded by the Insurance Commissioner.
The Borough of West Chester.
The Borough Manager of the Borough of West Chester and/or his or
her duly appointed assistants.
Includes incorporated insurance companies only and title insurance
companies, whether incorporated under the laws of the Commonwealth of Pennsylvania
or any other state, territory or district or under the laws of any foreign
country.
Includes only individuals, partnerships and corporations authorized
by the laws of the Commonwealth of Pennsylvania to exchange with each other
inter-insurance or reciprocal insurance contracts.
Includes any loss covered under a policy of fire insurance, including
any endorsements or riders to the policy.
[Added 5-10-1995 by Ord.
No. 7-1995]
The Insurance Commissioner of the Commonwealth of Pennsylvania and/or
his duly appointed assistants.
Any natural person, partnership, firm, association or corporation.
The Treasurer of the Borough of West Chester and/or his or her duly
appointed assistants.
[1]
The Insurance Company Law 40 P.S. § 362 et seq.
A.Â
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 building or other structure located within the borough where the amount recoverable for the fire loss to the building or other structure under all policies exceeds seven thousand five hundred dollars ($7,500.) unless the insuring agent is first furnished with a municipal certificate in accordance with § 58-3B and unless there is compliance with procedures set forth in § 58-3C.
[Amended 5-10-1995 by Ord.
No. 7-1995]
B.Â
Certificates.
[Amended 5-10-1995 by Ord.
No. 7-1995]
(1)Â
The Treasurer shall, upon the written request of the
named insured, which written request shall specify the tax parcel number of
the subject real property and the date agreed upon by the insuring agent and
the named insured as the date of the receipt of a proof of loss of the claim,
provide the named insured with either of the following certificates within
fourteen (14) working days, which certificate shall then be supplied by the
named insured to the insuring agent:
(a)Â
A certificate, or at the discretion of the borough, a
verbal notification which shall be confirmed in writing by the insuring agent
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 certificate or verbal notification, the borough
has not certified any amount as total costs incurred by the borough for the
removal, repair or securing of a building or other structure on the property;
or
(b)Â
A certificate and bill showing the amount of delinquent
taxes, assessments, penalties and user charges against the subject real 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
by the Borough Manager, that have been incurred by the borough or known by
the borough for the removal, repair or securing of a building or other structure
on the subject real property.
(2)Â
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.
C.Â
When, pursuant to § 58-3B(1), the Treasurer issues a certificate indicating that there are no delinquent taxes, assessments, penalties, user charges or costs incurred by the borough of the removal, repair or securing of a building or other structure on the subject real property, the insuring agent shall pay the claim of the named insured; provided, however, that if the loss as agreed upon by the named insured and the insuring agent equals or exceeds sixty percent (60%) of the aggregate limits of liability on all fire policies covering the building or other structure, the following procedures must be followed:
(1)Â
The insuring agent shall transfer from the insurance
proceeds to the Treasurer an amount of two thousand dollars ($2,000.) for
each fifteen thousand dollars ($15,000.) of a claim and for each fraction
of that amount of a claim. This section is to be applied such that if the
claim is fifteen thousand dollars ($15,000.) or less, the amount transferred
to the borough shall be two thousand dollars ($2,000.).
[Amended 5-10-1995 by Ord.
No. 7-1995]
(2)Â
If at the time of a proof of loss agreed to between the
named insured and the insuring agent the named insured has submitted an estimate
of the cost of removing, repairing or securing the building or other structure
which has been prepared by and signed by a bona fide contractor, the insuring
agent shall transfer to the borough from the insurance proceeds the amount
specified in the estimate.
(3)Â
The transfer of proceeds shall be on a pro rata basis
by all insuring agents insuring the building or other structure.
(4)Â
After the transfer, the named insured may submit an estimate
of the costs of removing, repairing or securing the building or other structure,
which has been prepared by and signed by a bona fide contractor, and if the
borough has not commenced to remove, repair or secure the building or other
structure, the Treasurer shall return the amount of funds transferred to the
borough in excess of the estimate to the named insured.
(5)Â
Upon receipt of the proceeds under this chapter, the
borough shall do the following:
(a)Â
The Treasurer shall place the proceeds in a separate
fund to be used solely as security against the total costs which are incurred
by the borough to remove, repair or secure a building or other structure.
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 other structure or any other proceedings related thereto.
(b)Â
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 Treasurer 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.
(c)Â
When repairs, removal or securing of the building or
other structures have been completed in accordance with all applicable regulations
and orders of the borough and the required proof of such completion is received
by the Treasurer, and provided that 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 the balance, if any, shall be transferred to the named insured.
(d)Â
To the extent that interest is earned on the proceeds
held by the borough pursuant to this chapter 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.
D.Â
Upon receipt of a certificate and bill pursuant to § 58-3B(2), 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. Upon receipt of the amount, the borough shall apply or credit such amount to the payment of the items as shown on the bill.
E.Â
Nothing in this chapter shall be construed to limit the
liability of the borough to recover any deficiencies. Furthermore, nothing
in this chapter shall be construed to prohibit the borough and the named insured
from entering into an agreement to permit the transfer of funds transferred
to the borough in excess of the estimate to the named insured.
The borough may, by resolution, adopt procedures and regulations to
implement Act 98 of 1992 and this chapter and may, by resolution, fix reasonable
fees to be charged for the borough's activities or services provided pursuant
to Act 98 of 1992 and this chapter, including but not limited to the issuance
of certificates and bills, performance of inspections and opening separate
fund accounts.
Any person, owner of property, named insured or insuring agent who shall
be convicted of a violation of any provision of this chapter or rule and/or
regulation issued pursuant to this chapter before any District Justice shall
be sentenced to pay a fine of not more than one thousand dollars ($1,000.)
per violation, together with the costs of prosecution, and/or to imprisonment
in the county jail for a term not to exceed thirty (30) days.
