[Adopted 3-18-2002 by Ord. No. 3-2002]
The Borough of Mount Pocono Treasurer, or such
official's designee, is hereby appointed as the designated officer
who is authorized to carry out all responsibilities and duties stated
herein.
No insurance company, association or exchange
(herein after the "insuring agent") doing business in the Commonwealth
of Pennsylvania shall pay a claim for fire damage to a structure located
within the Borough of Mount Pocono (hereinafter the "municipality")
where the amount recoverable for the fire loss to the structure under
all policies exceeds $7,500, unless the insuring agent is furnished
by the Municipal Treasurer 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
article].
Where, pursuant to Section 508(B)(1)(I) of Act
98 of 1992, the Municipal Treasurer issues a certificate indicating
that there are no delinquent taxes, assessments, penalties or user
charges against real property, the insuring agent shall pay the claim
of the named insured, provided, however, that if the loss agreed upon
by the named insured and the insuring agent equals or exceeds 60%
of the aggregate limits of liability on all fire policies covering
the building structure, the following procedures must be followed:
A. The insuring agent shall transfer from the insurance
proceeds to the designated officer of the municipality 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 municipality shall
be $2,000.
B. 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 insuring agent shall transfer to the municipality from the insurance
proceeds the amount specified in the estimate. The contractor, who
submits the claim, must acknowledge that the Borough will rely on
its representation.
C. The transfer of proceeds shall be on pro rata basis
by all companies, associations or exchanges 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 the funds transferred to the municipality
in excess of the estimate to the named insured, if the municipality
has not commenced to remove, repair or secure the building or other
structure.
E. Upon receipt of proceeds under this section, the municipality
shall do the following:
(1) The designated officer 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 municipality; such costs shall include, without
limitation, any engineering, legal or administrative costs incurred
by the municipality in connection with such removal, repair or securing
of the building or any proceedings related thereto; and
(2) It is the obligation of the insuring agent when transferring
the proceeds to provide the municipality with the names 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 municipality 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 municipality and the required proof
of such completion received by the designated officer, and if the
municipality has not incurred costs for repairs, removal or securing,
the fund shall be returned to the named insured; if the municipality
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 municipality shall transfer the remaining funds
to the named insured; and
(4) To the extent that interest is earned on proceeds
held by the municipality pursuant to this section, and not returned
to the named insured, such interest shall belong to the municipality;
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; and
(5) Nothing in this section shall be construed to limit
the ability of the municipality to recover any deficiency. Furthermore,
this subsection expressly permits the designated officer to enter
into any arrangement for the release of escrow funds provided that
the Borough's interest is reasonably protected.
The Borough of Mount Pocono may by resolution
adopt procedures and regulations to implement Act 98 of 1992, as amended,
and this article, and may by resolution fix reasonable fees to be
charged for municipal activities or services provided pursuant to
Act 98 of 1992, as amended, and this article; including but not limited
to issuance of certificates and bills (performance of inspections
and opening separate fund accounts).
Any owner of property, any named insured or
any insuring agent who violates this article shall be subject to a
penalty of up to $1,000 per violation. Additionally, the insuring
agent shall be responsible for any fees, costs, or deposits that should
have been made to the Borough in accordance with the provisions of
this article.