HB87 Alabama 2014 Session

Updated Feb 27, 2026

Notable

Summary

Primary Sponsor: K.L. Brown
Republican
Co-Sponsor: Juandalynn Givan
Session: Regular Session 2014
Title: Preneed funeral services, sale of further licensed and regulated, Secs. 27-17A-2, 27-17A-3, 27-17A-10, 27-17A-11, 27-17A-12, 27-17A-13, 27-17A-14, 27-17A-18, 27-17A-22, 27-17A-23, 27-17A-25, 27-17A-31, 27-17A-32, 27-17A-34, 27-17A-40, 27-17A-42, 27-17A-44, 27-17A-47, 27-17A-50, 27-17A-55 am'd; Sec. 27-17A-11.1, 27-17A-57 added
Summary: HB87 tightens regulation of preneed funeral and cemetery funds in Alabama, strengthening consumer protections and expanding the Insurance Commissioner’s authority and oversight.
What This Bill Does
If enacted, the bill expands the Insurance Commissioner’s power to pursue violations of the preneed act and to recover funds for consumers. It requires preneed funds to be held in trust (or funded through life insurance/annuities or surety bonds) with specific deposit and reporting requirements, and it tightens penalties for violations. It mandates registration and oversight of preneed sales agents, strengthens endowment care fund governance and bonding rules, and adds reporting duties for certificate holders, while clarifying which entities must have a preneed certificate of authority. It also sets construction deadlines for cemetery projects and enhances enforcement tools, including civil actions and stricter criminal penalties for noncompliance.

Who It Affects
Preneed sellers and certificate holders (funeral establishments, cemetery authorities, third-party sellers) who must obtain certificates of authority, fund contracts through trusts or approved alternatives, maintain bonds, and file regular reports.
Preneed contract buyers/consumers and endowment care cemetery authorities, as well as cemetery boards and endowment care fund trustees, who gain stronger protections, clearer fund management rules, and stricter oversight and accountability.

Key Provisions
Adds semi-annual reporting requirement for preneed certificate holders, including contract counts, funding types, and trust asset levels; requires quarterly reporting if defaults occur.
Requires detailed disclosures in preneed contracts about funding methods (trust vs. insurance/annuities) and creates criteria for contract form approval or automatic approval if not denied within 30 days.
Mandates that no preneed contract seller may take funds without a valid certificate of authority, and specifies penalties (Class B/C felonies and Class A misdemeanors for noncompliance) with potential civil remedies.
Imposes specific minimum deposits to preneed trusts from contract revenue (e.g., 75% for funeral services, 60% for outer burial containers, 110% of wholesale memorial cost, 100% for cash advances) and sets time frames for deposits after payments are collected.
Allows disbursement of trust funds to certificate holders only after verified delivery or cancellation, with proof requirements and partial payment handling.
Establishes detailed endowment care fund rules, including deposit formulas (e.g., cemetery merchandise 110% of wholesale cost, services 60% of price, caskets 75%, etc.), and requires regular valuations and annual remedies if the fund falls below required levels.
Prohibits cemetery authorities from directing endowment care funds in which they have a financial interest, and requires net income to be used exclusively for endowment care; defines net income and corpus handling.
Creates and defines the role of a qualified trustee for endowment care funds, requires bonds (minimum $25,000; higher amounts based on fund size), auditing, and allows annual audits to potentially exempt bonds if criteria are met.
Adds penalties and enforcement tools for fraudulent activity, including civil actions by the commissioner, the Attorney General, or others, and directs that fines go to the state general fund.
Adds Section 27-17A-57 granting the commissioner jurisdiction over wrongdoers who sell preneed contracts without a proper certificate of authority.
Sets construction timelines for mausoleum or below-ground crypt projects related to preneed sales and provides refund rules if construction is not completed on time.
Clarifies that funds placed in storage prior to death for certain preneed items may be released under specified conditions and that certain storage arrangements are allowed for remarkably durable items.

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