1Amending the act of May 17, 1921 (P.L.682, No.284), entitled "An
2act relating to insurance; amending, revising, and
3consolidating the law providing for the incorporation of
4insurance companies, and the regulation, supervision, and
5protection of home and foreign insurance companies, Lloyds
6associations, reciprocal and inter-insurance exchanges, and
7fire insurance rating bureaus, and the regulation and
8supervision of insurance carried by such companies,
9associations, and exchanges, including insurance carried by
10the State Workmen's Insurance Fund; providing penalties; and
11repealing existing laws," in fire and marine insurance,
12further providing for municipal certificate required prior to
13payment of fire loss claims.

14The General Assembly of the Commonwealth of Pennsylvania
15hereby enacts as follows:

16Section 1. Section 508(c), (d) and (i) of the act of May 17,
171921 (P.L.682, No.284), known as The Insurance Company Law of
181921, amended October 13, 1994 (P.L.609, No.93), are amended to
19read:

20Section 508. Municipal Certificate Required Prior to Payment
21of Fire Loss Claims.--* * *

22(c) When the loss agreed to between the named insured and
23the company, association or exchange equals or exceeds sixty per

1centum (60%) of the aggregate limits of liability on all fire
2policies covering the building or other structure, the insurance
3company, association or exchange shall transfer from the
4insurance proceeds to the designated officer of the municipality
5in the aggregate [two thousand dollars ($2,000)] four thousand 
6dollars ($4,000) for each fifteen thousand dollars ($15,000) and
7each fraction of that amount of a claim, or, if at the time of a
8loss report the named insured has submitted a contractor's
9signed estimate of the costs of removing, repairing or securing
10the building or other structure in an amount less than the
11amount calculated under the foregoing transfer formula, the
12insurance company, association or exchange shall transfer from
13the insurance proceeds the amount specified in the estimate. The
14transfer of proceeds shall be on a pro rata basis by all
15companies, associations or exchanges insuring the building or
16other structure. Policy proceeds remaining after the transfer to
17the municipality shall be disbursed in accordance with the
18policy terms. The named insured may submit a contractor's signed
19estimate of the costs of removing, repairing or securing the
20building or other structure after the transfer, and the
21designated officer shall return the amount of the fund in excess
22of the estimate to the named insured if the municipality has not
23commenced to remove, repair or secure the building or other
24structure. This subsection only applies to municipalities that
25have adopted an ordinance authorizing the procedure described in
26subsections (c) and (d) of this section and applies only to fire
27losses that occur after the adoption of the ordinance. The
28ordinance shall designate the officer authorized to carry out
29the duties of this section.

30(d) Upon receipt of proceeds by the municipality as

1authorized by this section, the designated officer shall place
2the proceeds in a separate fund to be used solely as security
3against the total cost of removing, repairing or securing
4incurred by the municipality. When transferring the funds as
5required in subsection (c) of this section, an insurance
6company, association or exchange shall provide the municipality
7with the name and address of the named insured, whereupon the
8municipality shall contact the named insured, certify that the
9proceeds have been received by the municipality and notify the
10named insured that the procedures under this subsection shall be
11followed. The fund shall be returned to the named insured when
12repairs, removal or securing of the building or other structure
13have been completed and the required proof received by the
14designated officer if the municipality has not incurred any
15costs for repairs, removal or securing. If the municipality has
16incurred costs for repairs, removal or securing of the building
17or other structure, the costs shall be paid from the fund, and,
18if excess funds remain, the municipality shall transfer the
19remaining funds to the named insured. The repairs, removal or 
20securing of the building or other structure must be completed 
21within one year of the receipt of proceeds by the municipality 
22under this subsection. Nothing in this section shall be
23construed to limit the ability of a municipality to recover any
24deficiency. Further, nothing in this subsection shall be
25construed to prohibit the municipality and the named insured
26from entering into an agreement that permits the transfer of
27funds to the named insured if some other reasonable disposition
28of the damaged property has been negotiated.

29* * *

30(i) When an ordinance is first passed or adopted by a

1municipality under subsections (a) and (b) of this section or
2subsections (c) and (d) of this section, or both, an exact copy
3of the ordinance shall be filed with the Department of Community
4[Affairs] and Economic Development, together with the name,
5position and phone number of the municipal official responsible
6for compliance with this section. Each municipality enacting an
7ordinance under this section shall supply the information
8required by this subsection to the Department of Community
9[Affairs] and Economic Development as part of the implementation
10of its ordinance. The Department of Community [Affairs] and 
11Economic Development shall periodically produce a register
12listing those municipalities filing the ordinance. This register
13shall be made available to insurance companies at minimum cost.
14An insurance company, association or exchange shall not be
15required to comply with any municipal ordinance if the
16municipality fails to provide a copy of the ordinance to the
17Department of Community [Affairs] and Economic Development.

18* * *

19Section 2. This act shall take effect in 60 days.