HB10 Alabama 2013 Session

Summary

Primary Sponsor

K.L. Brown

Republican

Session

Regular Session 2013

Title

Funeral or cemetery services, preneed funeral service contracts, regulation further provided for, Secs. 27-17A-5, 27-17A-11.1 added; Secs. 27-17A-2, 27-17A-3, 27-17A-10, 27-17A-11, 27-17A-12, 27-17A-13, 27-17A-14, 27-17A-16, 27-17A-18, 27-17A-22, 27-17A-23, 27-17A-25, 27-17A-30, 27-17A-31, 27-17A-32, 27-17A-33, 27-17A-34, 27-17A-47, 27-17A-50, 27-17A-55 am'd

Summary

HB10 would overhaul Alabama's preneed funeral and cemetery contracts by strengthening licensing, funding, and consumer protections, while reorganizing endowment care governance.

What This Bill Does

It clarifies that preneed contracts are not insurance and requires sellers to obtain a preneed certificate of authority from the Department of Insurance. It updates licensing, reporting, and enforcement, giving the commissioner power to impose penalties and use enforcement funds. It tightens funding rules by requiring deposits into approved trusts or insurance/annuities with specified timing and refund protections. It expands consumer protections around cancellation and refunds, reorganizes cemetery endowment care governance, repeals old cemetery preneed laws, and sets an effective implementation framework.

Who It Affects

• Preneed contract sellers and cemetery authorities (funeral establishments, cemetery authorities, third-party sellers, preneed sales agents) would need a preneed certificate of authority, must file quarterly preneed and trust reports, adhere to funding and refund rules, and comply with governance and bonding requirements.
• Preneed contract purchasers and their families would gain clearer cancellation rights, defined refund schedules, protections for funds placed in trusts, and stronger assurances about how funds are managed and disbursed.

Key Provisions

• Definition changes: preneed contracts are not insurance; introduces terms like preneed contract, preneed contract trust fund, and funding methods.
• Licensing and authority: sellers must obtain and maintain a preneed certificate of authority from the Department of Insurance, with eligibility tied to funeral director licensing or cemetery authority status.
• Funding and trusts: funds from preneed contracts must be placed in an approved trust or funded by life insurance or annuities; specifies deposit requirements and allowed funding vehicles; funds remain in trust until fulfillment or cancellation.
• Refunds and cancellation: sets timelines and percentages for refunds upon cancellation; allows irrevocable contracts in certain cases; provides rules for transfers to successor providers and refunds for delivered items.
• Reporting and records: certificate holders must file quarterly reports on preneed activity and trust activity; maintain sales and cemetery interment logs; possible waivers of annual financial statements under certain conditions.
• Endowment care and governance: prohibits dual roles on trustee boards, requires bonds for trustees, defines net income for endowment care funds, and broadens trustee investment and oversight powers.
• Enforcement and penalties: authorizes civil actions for violations, sets criminal penalties and per-day fines, and allows use of enforcement funds by the commissioner.
• Cemetery construction deadlines: establishes timelines for building mausoleums/below-ground crypts and refunds if construction is not completed on time.
• Repeals and framework: repeals older preneed cemetery sections and creates a new, comprehensive framework with defined effective date and local-funds considerations.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Funeral Services