- Primary Sponsor
- 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, 27-17A-57 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27-17A-34, 27-17A-47, 27-17A-50, 27-17A-55 am'd.; Secs. 27-17A-40, 27-17A-41, 27-17A-42, 27-17A-43, 27-17A-44 repealed
- Summary
HB31 overhauls Alabama's preneed funeral and cemetery contracts by strengthening licensing, funding requirements, and consumer protections.
What This Bill Does
The bill defines preneed contracts and clarifies they are not insurance. It requires anyone selling preneed funeral or cemetery services to obtain a certificate of authority from the Department of Insurance and updates renewal and reporting rules, including quarterly reports and possible waivers for annual financial statements. It tightens how funds are funded, mandating trusts or approved funding methods (including life insurance or annuities) with specific deposit requirements, and sets clear cancellation and refund provisions. It expands enforcement, limits certain conflicts of interest, and applies the act to cemetery authorities, while repealing outdated sections.
Who It Affects
- Preneed sellers and certificate holders (funeral establishments, cemetery authorities, third-party sellers): must obtain authority, meet funding and reporting requirements, maintain governance and bonding standards, and comply with new enforcement provisions.
- Consumers purchasing preneed contracts (buyers and funeral beneficiaries): gain stronger protections through funded trust requirements, defined refunds and cancellation rights, clearer disclosures, and enhanced oversight of how funds are managed.
Key Provisions
- Defines preneed contract and states it is not insurance; clarifies preneed funding mechanisms may include life insurance or annuity products.
- Requires every seller of preneed funeral or cemetery services to hold a certificate of authority from the Alabama Department of Insurance; sets licensing and renewal criteria for entities and preneed sales agents.
- Updates annual filing by replacing some financial statement requirements with quarterly reports on preneed activity and trust activity; allows written requests to waive some renewal financial statement filings.
- Mandates that funds from preneed contracts be placed in an approved trust, life insurance contract, or annuity contract, with detailed minimum funding percentages that vary by contract type and date (post-2002, 2002-2015, and 2015 onward).
- Requires deposits to trust within specified timeframes and ensures preneed cemetery funds remain in trust until cancellation or fulfillment, with defined refunds upon cancellation.
- Prohibits a person serving on a cemetery board from also serving as trustee of an endowment care fund, with defined exceptions; requires trustee bonds and defines net income for endowment care funds.
- Expands the commissioner’s enforcement powers, allows use of enforcement funds, and increases penalties for violations; provides for civil actions and high-level penalties for improper handling of preneed funds.
- Subject cemetery authorities to the act and repeals certain existing preneed-related statutes (27-17A-40 to -44); adds 27-17A-57 granting the commissioner authority over preneed sales without a certificate.
- Sets effective date as the first day of the third month after the bill becomes law.
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
