The City is hereby authorized to utilize the procedures established
by K.S.A. § 40-3901 et seq. whereby no insurance company
shall pay a claim of a named insured for loss or damage to any building
or other structure located within the City, where the amount recoverable
for the loss or damage to the building or other structure under all
policies is in excess of 75% of the face value of the policy covering
such building or other insured structure, unless there is compliance
with the procedures set out in this chapter.
The governing body of the City hereby creates a lien in favor
of the City on the proceeds of any insurance policy based upon a covered
claim payment made for damage or loss to a building or other structure
located within the City, where the amount recoverable for all the
loss or damage to the building or other structure under all policies
is in excess of 75% of the face value of the policy(s) covering such
building or other insured structure. The lien arises upon any unpaid
tax, special ad valorem levy, or any other charge imposed upon real
property by or on behalf of the City which is an encumbrance on real
property, whether or not evidenced by written instrument, or such
tax, levy, assessment, expense or other charge that has remained undischarged
for at least one year prior to the filing of a proof of loss.
Prior to final settlement on any claim covered by §
363-2, the insurer or insurers shall contact the county treasurer, Labette County, Kansas, to determine whether any such encumbrances are presently in existence. If the same are found to exist, the insurer or insurers shall execute and transmit in an amount equal to that owing under the encumbrances a draft payable to the county treasurer, Labette County, Kansas.
Such transfer of proceeds shall be on a pro rata basis by all
insurance companies insuring the building or other structure.
The City Treasurer is hereby authorized and shall create a fund
to be known as the "Insurance Proceeds Fund." All moneys received
by the City Treasurer as provided for by this chapter shall be placed
in said fund and deposited in an interest-bearing account.
If the Chief Building Inspector has proceeded under the provisions
of K.S.A. § 12-1750 et seq., as amended, all moneys in excess
of that which is ultimately necessary to comply with the provisions
for the removal of the building or structure, less salvage value,
if any, shall be paid to the insured.
If the Chief Building Inspector, with regard to a building or other structure damaged, determines that it is necessary to act under K.S.A. § 12-1756, any proceeds received by the City Treasurer under the authority of §
363-5A relating to that building or other structure shall be used to reimburse the City for any expenses incurred by the City in proceeding under K.S.A. § 12-1756. Upon reimbursement from the insurance proceeds, the Chief Building Inspector shall immediately effect the release of the lien resulting therefrom. Should the expenses incurred by the City exceed the insurance proceeds paid over to the City Treasurer under §
363-5A, the Chief Building Inspector shall publish a new lien as authorized by K.S.A. § 12-1756, in an amount equal to such excess expenses incurred.
This chapter shall not make the City a party to any insurance
contract, nor is the insurer liable to any party for any amount in
excess of the proceeds otherwise payable under its insurance policy.
Insurers complying with this chapter or attempting in good faith
to comply with this chapter shall be immune from civil and criminal
liability and such action shall not be deemed in violation of K.S.A.
§ 40-2404 and any amendments thereto, including withholding
payment of any insurance proceeds pursuant to this chapter, or releasing
or disclosing any information pursuant to this chapter.