| (a) Conflicts. An umpire must disclose to both parties
any potential conflicts of interest. Conflicts of interest are listed
in §5.4214 of this title (relating to Appraisal Process - Umpire
Qualifications and Conflicts of Interest). The umpire must disclose
the conflicts of interest no later than the fifth day after being
hired, and before the umpire begins work. A person may not serve as
umpire in an appraisal for which the person has a disqualifying conflict
of interest.
(b) Work. The umpire may begin work only if the association's
appraiser and the claimant's appraiser fail to reach an agreement
on the appraisal amount and tell the umpire in writing to begin work.
(c) Review information. The parties and appraisers
may request the umpire to review any information related to the claim,
including itemized estimates and supporting documents such as photographs
and diagrams. The umpire must review in detail all information the
appraisers and parties submit related to the dispute, including the
itemized appraisals. At a party's request, the umpire may also consider
any conflicts of interest or objections to appraisers. The umpire
must allow each appraiser a fair opportunity to present evidence and
argument. The umpire may ask questions, and request documents or other
evidence, including expert reports.
(d) Limited scope. The umpire's work may only cover
items about which the two appraisers disagree. The umpire must review
the differences and seek agreement with one or both appraisers regarding
the disputed items. The umpire may accept either appraiser's scope,
quantities, values, or costs on items in dispute or may develop an
independent decision on an item. The umpire may not visit the claimant's
property without agreement from both appraisers.
(e) Decision. An itemized decision agreed to by both
appraisers or by one appraiser and the umpire is binding on the parties
as to the amount of loss the association will pay for the claim. The
umpire may enter into an itemized decision with one or both appraisers
on a compromise basis. The umpire can issue a decision if agreement
is reached on the final total, even if there is disagreement on some
of the individual items. The umpire must promptly give the parties
and the appraisers an itemized written decision.
(f) Ethics. After accepting the responsibility to be
the umpire for an appraisal, the umpire:
(1) may not withdraw or abandon the appraisal unless
compelled to do so by unanticipated circumstances that would render
it impossible or impractical to continue;
(2) may not be present or participate in settlement
discussions unless requested by both parties; and
(3) must decide all matters fairly, exercising independent
judgment and utmost integrity. An umpire may not permit outside pressure
to affect the appraisal and may not delegate the umpire's decision
under subsection (e) of this section to any other person.
(g) Fees. The umpire must disclose all fees and must
state whether the umpire charges for a minimum number of hours. The
umpire may specify different charges for different types or values
of claims. The parties may not pay the umpire on a contingent fee
basis, percentage of the decision, barter arrangement, gift, favor,
or in-kind exchange. This subsection does not apply to department-selected
umpires under §5.4217 of this title (relating to Appraisal Process
- Umpire Selection by Department).
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