1. No insurance company, association or exchange (hereinafter “insurer”) 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 insurer is furnished by the Borough Treasurer with a certificate pursuant to 508(b) of the Insurance Company Law of 1921, as amended by Act 98 of 1992 and Act 93 of 1994 (collectively, the “Act”) and unless there is compliance with the procedures set forth in 508(c) and (d) of the Act.
2. Where there are delinquent taxes, assessments, penalties or user charges against the property (“municipal claims”), or there are expenses which the Borough has incurred as a cost for the removal, repair or securing of a building or other structure on the property (collectively “municipal expenses”), the Secretary/Treasurer or such official’s designee of the Borough shall immediately render a bill for such work, if he has not already done so. Upon written request of the named insured specifying the tax description of the property, the name and address of the insurer and the date of receipt by the insurer of a loss report of the claim, the Treasurer shall furnish a certificate within 14 working days after the request, to the insurer, a certificate (or at his discretion an oral notice confirmed in writing) either:
A. Stating that there are no unpaid municipal claims or municipal expenses against the property.
B. Specifying the nature and amount of such claims or expenses, accompanied by a bill for such amounts.
C. Taxes, assessments, penalties and user charges shall be deemed delinquent for this purpose if a lien could have been filed for such claims under applicable law. Upon receipt of a certificate and bill pursuant to subsection .2.A of this Section, the insurer shall transfer to the Treasurer an amount from the insurance proceeds sufficient to pay such sums prior to making payment to the named insured, subject to the provisions of subsection .3 hereof.
3. When all municipal claims and municipal expenses have been paid pursuant to subsection .2 of this Section, or where the Treasurer has issued a certificate described in subsection .2.A indicating that there are no municipal claims or municipal expenses against the property, the insurer shall pay the claim of the named insured; provided, however, that if the loss agreed upon by the named insured and the insurer equals or exceeds 60 percent of the aggregate limits of liability on all fire policies covering the building or structure, the following procedures must be followed:
A. The insurer shall transfer from the insurance proceeds to the Treasurer, in the aggregate, $2,000 for each $15,000 of such claim or fraction thereof.
B. If at the time a loss report is submitted by the insured, such insured has submitted to the insurer, with a copy to the Borough, a contractor’s signed estimate of the cost of removing, repairing or securing the building or other structure in an amount less than the amount calculated under the foregoing transfer formula, the insurer shall transfer to the Treasurer from the insurance proceeds the amount specified in the estimate. If there is more than one insurer, the transfer of proceeds shall be on a pro rata basis by all insurers insuring the building or other structure.
C. Upon receipt of the above described portion of the insurance proceeds, the Treasurer shall do the following:
(1) Place the proceeds in a separate fund to be used solely as security against the total municipal expenses anticipated by the Borough to be required in removing, repairing or securing the building or structure as required by this Part. Such costs shall include, without limitation, any engineering, legal or administrative costs incurred by the Borough in connection with such removal, repair or securing or any proceedings related thereto.
(2) Mail to the named insured, at the address received from the insurer, a notice the proceeds have been received by the Borough and that the proce dures under this subsection shall be followed.
(3) After the transfer, the named insured may submit to the Borough a contractor’s signed estimate of the cost of removing, repairing or securing the building or other structure, in which event the Treasurer shall, if such estimate is deemed by the Treasurer to be reasonable, return to the insured the amount of the funds transferred to the Borough in excess of that required to pay the municipal expenses; provided, the Borough has not commenced to remove, repair or secure the building or other structure, in which case the Borough will complete the work.
(4) Pay to the Borough Secretary/Treasurer or such official’s designee for reimbursement to the Borough general fund, the amount of the municipal expenses paid by the Borough.
(5) Pay the remaining balance in the fund (without interest) to the named insured upon receipt of a certificate issued by the Borough Secretary/Treasurer or such official’s designee that the repair, removal or securing of the building or other structure has been completed in accordance with all applicable codes and regulations of the Borough.
(6) Nothing in this Section shall be construed to limit the ability of the Borough to recover any deficiency in the amount of municipal claims or municipal expenses recovered pursuant to this Part, or to insurance proceeds, by an action at law or in equity to enforce the codes of the Borough or to enter into an agreement with the named insured with regard to such other dispo sition of the proceeds as the Borough may deem responsible.
(A.O.)