HB588 Alabama 2010 Session

Summary

Primary Sponsor

Ron Johnson

Republican

Session

Regular Session 2010

Title

Preneed funeral and cemetery services, sellers of required to be licensed by Board of Funeral Service or obtain certificate of authority from Insurance Department, certificate of authority requirements altered, trust requirements specified, bonds, penalties increased, Funeral and Cemetery Preneed Consumer Protection Fund established, cemetery authorities further provided for, Secs. 27-17A-5, 27-17A-26 added; Secs. 27-17A-3, 27-17A-10, 27-17A-11, 27-17A-12, 27-17A-13, 27-17A-14, 27-17A-15, 27-17A-22, 27-17A-25, 27-17A-30, 27-17A-31, 27-17A-32, 27-17A-40, 27-17A-41, 27-17A-42, 27-17A-43, 27-17A-44, 27-17A-50, 27-17A-55 am'd. (2010-20437)

Description

Under existing law, there are certain standards for the sale of preneed funeral and cemetery merchandise and services.

This bill would clarify that a preneed contract is not an insurance contract.

This bill would clarify and require any person selling funeral or cemetery services on a preneed basis to obtain a certificate of authority from the Department of Insurance.

This bill would require the quarterly submission of a statement of preneed financial transactions to the Commissioner of Insurance.

This bill would change the renewal period for persons holding a preneed certificate of authority from April 1 to July 1 and would provide for the expiration of the certificate on September 30 in lieu of June 1.

This bill would clarify the amount of a bond used as an alternative to a trusting requirement and would require an initial bond to be based on the amount of preneed liability expected to be incurred within the next 12 months.

This bill would require the commissioner, at least annually, to inspect the preneed records of any person lawfully writing, or suspected of unlawfully writing, preneed contracts and would authorize the commissioner to charge an inspection fee of up to $250.

This bill would increase the penalties for a willful violation from those for a Class B misdemeanor to those for a Class C felony.

This bill would authorize the commissioner to use funds available from all sources in the enforcement of this act.

This bill would create the Alabama Funeral and Cemetery Preneed Consumer Protection Fund for the protection of consumers who purchase preneed contracts after April 30, 2002.

This bill would clarify that funds received for funeral and cemetery merchandise placed in storage prior to death need not be placed in trust.

This bill would subject cemetery authorities to the act.

This bill would require any person receiving funds from the sale of a preneed contract to contribute to a trust fund, life insurance contract, or annuity contract.

This bill would prohibit a seller of preneed services from sharing in the discharge of the responsibilities of the trustee, except for appointing an adviser.

This bill would require any payments received on a preneed contract written after April 30, 2002, to be deposited into an approved trust.

This bill would require that preneed cemetery merchandise and services funds remain in trust until cancellation or fulfillment.

This bill would remove the requirement that certification of a responsible officer of a preneed cemetery authority be given under oath.

This bill would also require a cemetery authority to place funds collected for the construction of a mausoleum, columbarium, or below ground crypt into a preconstruction trust until such time as construction is complete.

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Subjects

Funeral Service, Board of