NOTICE OF WITHHOLDING TO NAMED INSURED AND MORTGAGEES
Date of Notice __________________________  To:  Name and address of named insured ______________________________________ ______________________________________ ______________________________________ To: Name and address of mortgagee   ______________________________________ ______________________________________ ______________________________________ Description _____________________________ ______________________________________ Location _______________________________ ______________________________________		From:  Name, company name and address, department ______________________________________ ______________________________________ ______________________________________ Policy No.______________________________ Claim No. ______________________________ Date of Loss ____________________________ Amount Withheld  ________________________ Date affidavit must be postmarked by  _________
In accordance with Michigan Law (PA495, 386, 216 and 217) this Company is withholding part of the amount payable for fire or explosion loss to the insured property shown above. The amount is 25% of the actual cash value of the insured real property at the time of the loss, or 25% of the final settlement, whichever is less; or, if demolition or debris removal is included in the final settlement agreement, the insurer shall withhold one (1) of the following amounts, whichever is the largest: (a) the agreed cost of demolition of debris removal, (b) 25% of the actual cash value of the insured real property at the time of loss, (c) 25% of the final cost of settlement of the insured real property claim. For purposes of the Act, "final settlement" does not include additional funds paid as a result of settlement of a basis other than actual cash value. This law applies only to insured real property located in a municipality that has notified the Commissioner of Insurance that it has elected to apply the provisions of this law. The purpose of this law is to assure that proceeds of insurance claims will be used to repair or remove property damaged by fire or explosion. An exception to the withholding requirement is allowed if all of the following requirements are met:     a. Within 15 days after the insured and the insurer agree on the final settlement, the insured has filed evidence of a         Contract to repair the real property and     b. The insured consents to payment of funds directly to the contractor performing the work on the property.     c. The insurer gives notice to the municipality after receiving the contract that there will not be amounts withheld         because of the repair contract. We will forward the amount withheld to the municipality where the property is located upon receiving an affidavit form the chief fire official (or other authorized representative) that the insured real property violates existing health and safety standards. This affidavit must be postmarked no later than the date shown above in order for the municipality to be entitled to claim the withheld funds. The municipality must deposit the funds in a separate escrow account and the municipality must make application to the proper court for the right to retain the funds within 30 days after receiving them or return them to the named insured. If the mortgage on the insured property is in default, the municipality must release the funds, or a portion sufficient to satisfy the outstanding debt, no later than 10 days after receiving a written request from a first mortgagee. The funds will be returned to the named insured if, within 120 days from the date the municipality receives the funds, the named insured shows reasonable proof that a. The structure has been repaired, replaced or removed; or b. The insured has entered into a contract to have the repair of removal completed. The municipality may require reasonable proof by any of the following; A. Originals or copies of the contracts, invoices or receipts evidencing work performed; b. Affidavits from a contractor that work has been performed; c. An inspection of the property. Where contracts have been entered into but work has not been performed, the funds will be forwarded to the contractor and any unused portion will be forwarded to the named insured.