Current through Register Vol. 54, No. 49, December 7, 2024
Section 113.106 - Insurance and surveys(a)Mortgage. The volunteer company shall procure, pay for and deliver to the OSFC a mortgagee's title insurance policy in the aggregate amount of the loan, insuring the interest of the OSFC as the mortgagee under the mortgage as a lien or charge upon the mortgage property, subject only to exceptions that have been approved by the OSFC.(b)Insurance. The volunteer company shall maintain the following insurance in form and substance satisfactory to and in amounts required by the OSFC, with evidence of the payment of premiums for the benefit of the OSFC and the volunteer company: (1) Construction coverage: (i) Workmens compensation insurance and employers liability insurance.(ii) Combined coverage, comprehensive general liability insurance and owner's protective liability insurance.(iii) Builder's risk on the project and the improvements, including the materials, equipment and other personal property located on the mortgaged property which are used or intended to be used in the project and the improvements; with extended coverage, vandalism and malicious mischief; and with no more than a $100 deductible provision for losses.(c)Endorsements. Policies issued shall contain standard mortgagee clauses making losses thereunder payable to the OSFC, the volunteer company and other mortgage holder. Policies or copies shall be deposited with the OSFC. Not later than 30 days prior to the expiration date of each of the policies, the volunteer company shall deliver to the OSFC satisfactory evidence of the renewal of each of the policies.(d)Assignment of insurance policies. The volunteer company shall assign and deliver the required certificates of the insurance to the OSFC at the time of final settlement. In the event of the OSFC's foreclosure of the mortgage or of the transfer of title to the mortgaged property to the OSFC in extinguishment of the indebtedness secured by the mortgage, all right, title and interest of the OSFC in and to policies then in force shall be reassigned to the volunteer company.(e)Event of loss. In the event of loss or damage to the mortgage property, the volunteer company shall give immediate notice to the OSFC and of the estimated monetary amount of the loss; and the volunteer company shall make prompt proof of loss and furnish copies to the OSFC. The OSFC may make proof of loss if not made promptly by the volunteer company. An insurer concerned shall be authorized and directed by the volunteer company to make payment for the loss or injury to the OSFC and any mortgage holder jointly. The insurance proceeds or any part may be retained and applied by the OSFC toward payment of a loan outstanding to the OSFC by the volunteer company in priority and proportions the OSFC deems proper; or, at the option of the OSFC, the proceeds may be applied or paid in whole or in part toward the restoration or repair of the damaged property or for other purposes and upon conditions the OSFC designates.The provisions of this § 113.106 adopted December 23, 1982, effective 12/25/1982, 12 Pa.B. 4333; amended December 18, 1992, effective 12/19/1992, 22 Pa.B. 6019.