PRIOR PRINTER'S NO. 2916 PRINTER'S NO. 3946
No. 2347 Session of 1993
INTRODUCED BY BUXTON, DeWEESE, EVANS, COY, CESSAR, LaGROTTA,
LEDERER, MAYERNIK, TRELLO, LAUGHLIN, COLAFELLA, COWELL,
GORDNER, MIHALICH, STABACK, BEBKO-JONES, SCRIMENTI,
MICHLOVIC, RIEGER, OLASZ, CORRIGAN, CALTAGIRONE, JADLOWIEC,
BARLEY, HUTCHINSON, NAILOR, TOMLINSON, CLYMER, DeLUCA, FARGO,
CORNELL, TANGRETTI, GRUITZA, PERZEL, GAMBLE, JAMES AND
GIGLIOTTI, DECEMBER 7, 1993
AS REPORTED FROM COMMITTEE ON CONSUMER AFFAIRS, HOUSE OF
REPRESENTATIVES, AS AMENDED, JUNE 17, 1994
AN ACT
1 Providing for the regulation of preneed funeral and burial
2 contracts; providing for powers and duties of the Office of
3 Attorney General, Bureau of Consumer Protection; creating
4 funds; imposing penalties; and making repeals.
5 TABLE OF CONTENTS
6 Section 1. Short title.
7 Section 2. Definitions.
8 Section 3. Construction and application.
9 Section 4. Registration.
10 Section 5. Discrimination prohibited.
11 Section 6. Marketing and solicitation.
12 Section 7. General contract requirements.
13 Section 8. Specific contract requirements and disclosures.
14 Section 9. Cancellation.
15 Section 10. Credit life insurance. <--
16 Section 11. Funding methods for preneed contracts.
1 Section 12. Preneed trusts.
2 Section 13. Preneed insurance policies.
3 Section 14. Performance and substitution of preneed provider.
4 Section 15. Change in preneed provider's status.
5 Section 16. Substitution of trustee and trusts.
6 Section 17. Substitution of goods and services.
7 Section 18. Preneed Funeral and Burial Contract Regulation
8 Fund.
9 Section 19. Preneed Funeral and Burial Contract Guarantee Fund.
10 Section 20. Regulations.
11 Section 21. Preneed Funeral and Burial Contract Advisory Board.
12 Section 22. Violations and enforcement.
13 Section 23. Repeals.
14 Section 24. Effective date.
15 SECTION 10. FUNDING METHODS FOR PRENEED CONTRACTS. <--
16 SECTION 11. PRENEED TRUSTS.
17 SECTION 12. PRENEED INSURANCE POLICIES.
18 SECTION 13. PERFORMANCE AND SUBSTITUTION OF PRENEED PROVIDER.
19 SECTION 14. CHANGE IN PRENEED PROVIDER'S STATUS.
20 SECTION 15. SUBSTITUTION OF TRUSTEE AND TRUSTS.
21 SECTION 16. SUBSTITUTION OF GOODS AND SERVICES.
22 SECTION 17. PRENEED FUNERAL AND BURIAL CONTRACT REGULATION
23 FUND.
24 SECTION 18. PRENEED FUNERAL AND BURIAL CONTRACT GUARANTEE
25 FUND.
26 SECTION 19. REGULATIONS.
27 SECTION 20. PRENEED FUNERAL AND BURIAL CONTRACT COMMISSION.
28 SECTION 21. EXECUTIVE DIRECTOR.
29 SECTION 22. JUDICIAL REVIEW.
30 SECTION 23. VIOLATIONS AND ENFORCEMENT.
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1 SECTION 24. EFFECTIVE DATE.
2 The General Assembly of the Commonwealth of Pennsylvania
3 hereby enacts as follows:
4 Section 1. Short title.
5 This act shall be known and may be cited as the Preneed
6 Funeral and Burial Contract Regulation Act.
7 Section 2. Definitions.
8 The following words and phrases when used in this act shall
9 have the meanings given to them in this section unless the
10 context clearly indicates otherwise:
11 "Bureau of Consumer Protection." The Bureau of Consumer
12 Protection in the Office of Attorney General.
13 "Buyer." A person who enters into a preneed contract with a
14 preneed provider. The term includes, where the buyer is
15 different from the contract beneficiary and where the buyer
16 predeceases him or her, the contract beneficiary or contract
17 beneficiary's estate.
18 "Contract beneficiary." The person, who may be the buyer or <--
19 another person, whose funeral or burial is the subject of the
20 preneed contract.
21 "POD account." A separate account in a financial institution
22 also referred to as a burial reserve account for the deposit of
23 all funds paid by buyer and created by and using both the
24 buyer's and preneed provider's names and which is payable to the
25 preneed provider only upon the death of the buyer.
26 "Preneed contract." An agreement for the provision of
27 preneed goods, preneed services or both preneed goods and
28 preneed services.
29 "Preneed goods and services." Goods or services typically
30 sold or provided in connection with the final disposition of
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1 human remains, purchased in advance of need and not provided or
2 delivered contemporaneously to a purchaser or bonded facility
3 with execution of the contract. The term includes, but is not
4 limited to, caskets or other primary containers, cremation or
5 transportation containers, outer burial containers, vaults,
6 grave liners, grave markers, funeral clothing or accessories,
7 monuments, cremation urns, embalming, cremation, funeral
8 directing or cemetery services and similar funeral or burial
9 items.
10 "Preneed insurance policy." Any form of insurance or
11 annuity, which is sold or utilized for the purpose of providing
12 funding for a preneed contract, regardless of how named.
13 "Preneed provider." A funeral director licensed by the
14 Commonwealth or a cemetery company registered by the
15 Commonwealth and registered under section 4 to sell preneed
16 contracts.
17 Section 3. Construction and application.
18 (a) Uniform Commercial Code.--The provisions of 13 Pa.C.S.
19 Div. 2 (relating to sales) shall apply to the interpretation and
20 enforcement of preneed contracts.
21 (b) Fiduciary relationship.--A fiduciary relationship shall
22 exist between a preneed provider and a buyer.
23 Section 4. Registration.
24 (a) Registration requirement.--A preneed provider shall not
25 promote, sell or enter into a preneed contract without first
26 obtaining a preneed registration from the Bureau of Consumer
27 Protection. The registration must be renewed on an annual basis.
28 (b) Application.--A preneed provider seeking to obtain
29 preneed registration shall submit a registration fee of $150 and
30 an application on a form prescribed by the Bureau of Consumer
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1 Protection which contains the following:
2 (1) The types of preneed contracts to be written.
3 (2) The types of goods and services to be sold.
4 (3) The name, address and telephone number of the place
5 of business of the preneed provider.
6 (4) The name, address, telephone number and Social
7 Security number of each owner, officer or other official of
8 the preneed provider or, if the preneed provider is a
9 corporation, of the chief executive officer and all members
10 of the board of directors.
11 (5) Any information deemed necessary by the Bureau of
12 Consumer Protection to show evidence of good moral character,
13 a reputation for fair dealing in business matters and the
14 absence of a criminal record. The Bureau of Consumer
15 Protection shall also have the right to require the applicant
16 to submit a financial statement prepared by an accountant to
17 establish financial stability.
18 (c) Individual registration.--A person shall not sell or
19 promote any preneed contract without first obtaining a preneed
20 individual registration from the Bureau of Consumer Protection.
21 The registration must be renewed on an annual basis. In addition
22 to the registration required under this act, all cemetery
23 salespersons must be licensed by the State Real Estate
24 Commission and only funeral directors licensed by the State
25 Board of Funeral Directors shall be authorized to sell preneed
26 funeral service.
27 (d) Individual application.--A person seeking to obtain a
28 preneed individual registration must be at least 21 years of age
29 or older and must submit a registration fee of $50 and an
30 application on a form prescribed by the Bureau of Consumer
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1 Protection which includes the following:
2 (1) The name, address, telephone number and Social
3 Security number of the person.
4 (2) The name, business address and telephone number of
5 the preneed provider for whom the person is authorized to
6 sell preneed contracts and of all other preneed providers who
7 will be providing goods and services under the contracts.
8 (3) Any information deemed necessary by the Bureau of
9 Consumer Protection to show evidence of good moral character,
10 a reputation for fair dealing in business matters and the
11 absence of a criminal record.
12 (4) A photograph of the person taken within the last six
13 months.
14 (e) Restrictions on individual registrants.--A person
15 registered under this act must be an employee or agent of a
16 preneed provider which holds a valid preneed provider
17 registration and which can deliver the goods and services sold.
18 The preneed provider shall be liable for the acts of its
19 employees and agents, independent or otherwise, performed in the
20 course of obtaining or attempting to obtain a preneed contract.
21 (f) Display of registration.--Upon issuance, the preneed
22 registration shall be posted conspicuously in the preneed
23 provider's place of business.
24 (g) Outside solicitation.--A person registered under this
25 act who engages in solicitation outside of the preneed
26 provider's principal place of business shall present a copy of
27 his registration and written authorization from the preneed
28 provider upon entry onto the premises where the prospective
29 buyer is being solicited.
30 (h) Notice of changes.--A preneed provider or person
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1 registered under this act must notify the Bureau of Consumer
2 Protection within 30 days of any change of any information
3 required by the Bureau of Consumer Protection for preneed
4 registration.
5 (i) Fees.--A preneed provider or a person applying for
6 preneed registration shall pay the Bureau of Consumer Protection
7 an annual fee as set forth in section 4(b) and (d),
8 respectively. The Bureau of Consumer Protection shall deposit
9 all fees into the Preneed Funeral and Burial Contract Regulation
10 Fund established under section 18.
11 (j) Denial and revocation of registration.--
12 (1) The Bureau of Consumer Protection shall not grant a
13 preneed registration and may revoke any previously granted
14 preneed registration if the Bureau of Consumer Protection
15 finds that:
16 (i) the applicant or registrant is insolvent;
17 (ii) the applicant or registrant cannot provide the
18 goods or services described in its application; or
19 (iii) the applicant or registrant has engaged in a
20 deceptive act or practice or has deliberately
21 misrepresented or omitted a material fact relative to the
22 sale of preneed contracts.
23 (2) The Bureau of Consumer Protection may exercise its
24 discretion in determining whether to grant a registration if
25 the provider:
26 (i) has failed to comply with any requirements of
27 this act or any regulations promulgated under this act;
28 or
29 (ii) has been convicted of any crime involving
30 dishonesty or false statement.
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1 Section 5. Discrimination prohibited.
2 Preneed providers shall not discriminate against buyers on
3 the basis of race, color, religion, national origin, marital
4 status or sex.
5 Section 6. Marketing and solicitation.
6 (a) Solicitation of patients.--An agent or employee of a
7 preneed provider shall not visit or call upon a patient in a
8 hospital, convalescent or nursing home, rest home, charitable
9 home for the aged, infirmary, intermediate care facility for
10 persons with mental disabilities or other health care facility
11 for the purpose of soliciting or inducing the patient to enter
12 into any preneed contract, establish a preneed trust or purchase
13 a preneed insurance policy, unless:
14 (1) the agent or employee has received a request from
15 the patient or legal representative to do so prior to the
16 date of the visit;
17 (2) the agent or employee displays the registration
18 required by this act; and
19 (3) the agent or employee explains at the beginning of
20 the visit that the purpose of the visit is to persuade the
21 patient to enter into a preneed contract or preneed insurance
22 policy.
23 (b) Solicitation in the home.--An agent or employee of a
24 preneed provider shall not visit or call upon any person in the
25 person's home for the purpose of soliciting or inducing the
26 person to enter into any preneed contract, establish a preneed
27 trust or purchase a preneed insurance policy, unless:
28 (1) the agent or employee has received a request from
29 the person or the person's legal representative to do so
30 prior to the date of the visit;
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1 (2) the agent or employee displays the registration
2 required by this act; and
3 (3) the agent or employee explains at the beginning of
4 the visit that the purpose of the visit is to persuade the
5 person to enter into a preneed contract or preneed insurance
6 policy.
7 (c) Telephone solicitation.--Telephone solicitation of
8 preneed contracts and preneed insurance policies is permitted if
9 all of the following conditions are met:
10 (1) The person calling clearly identifies himself and
11 the product at the beginning of the communication.
12 (2) The person calling informs the prospective buyer at
13 the beginning of the communication that the purpose of the
14 call is to solicit the prospective buyer to enter into a
15 preneed contract or insurance policy.
16 (3) The communication is terminated immediately upon any
17 request to do so from the prospective buyer.
18 (d) Disclosure of information.--Upon beginning discussion of
19 any preneed contract, the preneed provider or its agent or
20 employee must give the prospective buyer all information
21 required by section 7. All prices on the lists must be the same
22 as those for at-need funeral or burial goods and services at the
23 preneed provider's establishment.
24 (e) Deceptive practices prohibited.--A preneed provider and
25 its agents and employees shall not use any means, including
26 advertisements, which are unfair, false, deceptive, misleading,
27 coercive, intimidating or threatening.
28 (f) Interference with existing contract prohibited.--A
29 preneed provider and its agents and employees shall not
30 knowingly induce or attempt to induce any person to cancel or
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1 revoke any preexisting preneed contract, preneed trust or
2 preneed insurance policy.
3 (g) Advertisements.--All advertisements of any kind of
4 preneed contacts, preneed trusts or preneed insurance policies
5 shall disclose the following information:
6 (1) The type of product which is to be used to fund the
7 preneed contract.
8 (2) The nature of the relationship between the agent who
9 solicits the purchase, the preneed provider, the buyer and
10 the institution which will receive or hold any funds paid in
11 connection with the purchase of the preneed contract.
12 Section 7. General contract requirements.
13 (a) Signing of contract.--Every preneed contract must be
14 signed by a registered preneed provider.
15 (b) Waiver of required provisions void.--No provisions of
16 any contract required by this act may be waived. Any attempted
17 waiver is void.
18 (c) Required disclosures.--All preneed providers, even if
19 not required to do so by 16 CFR Part 453 (relating to funeral
20 industry practices), must provide every prospective buyer of a
21 preneed contract with all disclosures described in or required
22 by the provisions of 16 CFR Part 453. For items covered by this
23 act which are not covered by the provisions of 16 CFR Part 453,
24 all preneed providers shall provide disclosures similar to those
25 required by 16 CFR Part 453.
26 (d) Investment information.--With nonguaranteed plans, all
27 preneed providers must disclose at the point of sale the
28 following:
29 (1) where trust funds are invested and the current rate
30 of return; or
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1 (2) the names of the insurance company writing a life
2 insurance policy to fund the preneed contract, the current
3 rate of return and, with multiple payment plans, the fact
4 that a comparison of premiums and benefits will be provided
5 (Financial Review of this Policy) when the policy is mailed
6 to the consumer.
7 Section 8. Specific contract requirements and disclosures.
8 (a) Plain language.--The provisions of the act of June 23,
9 1993 (P.L.128, No.29), known as the Plain Language Consumer
10 Contract Act, shall apply to preneed contracts.
11 (b) Identification of parties.--Each contract shall identify
12 the preneed provider, the preneed provider's address, the
13 telephone number, the registration number and the individual
14 registration number of the salesperson and shall identify the
15 buyer and the contract beneficiary, if other than the buyer, and
16 set forth their addresses.
17 (c) Identification of services.--Each contract shall specify
18 and itemize the services or goods, or both, to be provided and
19 contain a statement of the law regarding substitution in
20 accordance with section 17. Goods shall be described in detail.
21 The contract shall contain specifications of materials and
22 construction and a description and the cost of each item as
23 shown on the preneed provider's current price sheet. The price
24 of all goods and services shall be itemized.
25 (d) Purchase price.--Each contract shall set forth the total
26 purchase price and the terms under which it is to be paid,
27 including any credit terms, if applicable.
28 (e) Method of funding.--
29 (1) Each contract shall state clearly whether it is
30 funded or unfunded and, if it is funded, whether it is funded
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1 by a preneed trust fund or by a preneed insurance policy.
2 (2) The contract shall also state whether it is a
3 guaranteed price contract in whole or in part or a
4 nonguaranteed price contract.
5 (f) Guaranteed price contracts.--Each guaranteed price
6 contract shall contain the following statement in 12-point bold
7 type:
8 This contract in whole or in part guarantees the buyer
9 the specific goods and services contracted for. No
10 additional charges shall be required for the items
11 specified in the contract.
12 (g) Nonguaranteed price contracts.--Each nonguaranteed price
13 contract shall contain the following statement in 12-point bold
14 type:
15 This contract does not guarantee the buyer any specific
16 goods or services. Any funds paid under this contract may
17 be only a deposit to be applied toward the final costs of
18 the goods or services contracted for. Additional charges
19 may be required.
20 (h) Contract funded by preneed trust.--Each contract funded
21 by a preneed trust shall contain the following:
22 (1) The name and address of the trustee.
23 (2) The amount of money to be placed in trust.
24 (3) The percentage and total amount paid on the preneed
25 contract that the preneed provider will retain and not
26 deposit into the preneed trust.
27 (4) An explanation of the disposition of the interest,
28 including a statement of the fees, expenses and taxes which
29 may be deducted from the interest under section 12.
30 (5) A statement of the buyer's responsibility for taxes
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1 owed on the interest.
2 (i) Contract funded by preneed insurance policy.--Each
3 contract funded by a preneed insurance policy shall contain the
4 following:
5 (1) The name of the company writing the insurance
6 policy.
7 (2) Other disclosures required by section 13.
8 (j) Disclosure statement.--Each contract shall be
9 accompanied by a disclosure statement containing the following:
10 (1) The name and address of the Bureau of Consumer
11 Protection and the procedure for submitting complaints to the
12 Bureau of Consumer Protection.
13 (2) A statement notifying the buyer of the $5 Preneed
14 Funeral and Burial Contract Guarantee Fund fee.
15 (3) The following statement of the buyer's cancellation
16 rights under section 9(a) in 12-point bold type:
17 You have the right to cancel this contract at any time
18 during the first 30 days. If you do so, you must receive
19 back 100% of the money you have paid. If this contract is
20 funded by a preneed insurance policy, you may have longer
21 than 30 days to cancel and receive a full refund. Consult
22 your insurance policy and attachments for information
23 regarding your time to cancel.
24 (4) The following statement of the buyer's cancellation
25 rights under section 9(b) in 12-point bold type:
26 You have the right to cancel this contract at any time
27 after the first 30 days. If you cancel a contract funded
28 by a preneed trust, you will receive a refund of all the
29 money placed in trust, plus any interest earned. Only
30 reasonable administrative fees and any taxes you may have
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1 authorized to be paid from the interest may be deducted
2 from this amount, as specified by law. If you cancel
3 after 30 days, you will not receive a refund of the
4 $.........(........%) that, by the terms of this
5 agreement, is not placed in trust. If you cancel a
6 contract funded by a preneed insurance policy after the
7 time for a full refund, you may not want to cancel the
8 insurance policy itself and you may want to change the
9 beneficiary or assignee on the policy. Consult your
10 contract and accompanying documents for information
11 regarding the impact of cancellation of the contract and
12 other changes.
13 (5) The following statement of the buyer's rights
14 relating to funding methods in 12-point bold type:
15 You have a right to fund this contract by any method that
16 you choose. You may choose to fund this contract through
17 your own investment, through a preneed trust account or
18 through a life insurance policy or annuity, including any
19 preneed insurance policy that may be offered by the
20 preneed provider. Sale of this contract cannot be
21 conditioned on purchase of any insurance policy or
22 annuity.
23 (6) A statement explaining the buyer's rights regarding
24 changes in or relating to the funding method.
25 (k) Effect of insolvency of preneed provider.--Each contract
26 shall contain the following provision:
27 If the preneed provider is the subject of a bankruptcy or
28 other insolvency proceedings, the preneed provider will
29 be in default on this contract, and the full amount paid
30 by the buyer under the contract, together with any
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1 interest or other earnings, less any reasonable
2 administrative expenses or taxes already paid, will
3 become immediately due and owing, without notice from the
4 buyer.
5 (l) Preapproval of contract.--The preneed provider shall
6 submit the form of the proposed contract to the Bureau of
7 Consumer Protection prior to its use. Any contract which has not
8 been approved by the Bureau of Consumer Protection is void.
9 Section 9. Cancellation.
10 (a) Cancellation within 30 days.--Any buyer may cancel a
11 preneed contract within 30 days after all parties have signed
12 the contract and shall receive 100% of all payments made under
13 the contract. In the case of a preneed contract funded by a
14 preneed insurance policy, the cancellation period under this
15 subsection will continue until the latest of 30 days after
16 delivery of the preneed insurance policy or expiration of the
17 period for free cancellation of the policy under the terms of
18 the policy or applicable law. No fee, surcharge, penalty or
19 liquidated damages may be imposed upon the right to cancel.
20 (b) Cancellation after 30 days.--Any buyer may cancel the
21 contract at any time after the initial 30-day period and before
22 performance by the preneed provider on the contract subject to
23 the following conditions:
24 (1) In the case of a preneed contract funded by a
25 preneed trust:
26 (i) where no irrevocable arrangement has been made,
27 the buyer shall receive 100% of all moneys placed in
28 trust under the contract and all accrued interest less
29 reasonable trustee fees, administrative expenses and
30 taxes; or
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1 (ii) where an irrevocable arrangement has been made,
2 the buyer shall have the right to change the beneficiary
3 of the preneed trust to a substitute preneed provider.
4 (2) In the case of a preneed contract funded by a
5 preneed insurance policy:
6 (i) where no irrevocable arrangement has been made,
7 the buyer shall have the right to change beneficiaries of
8 the policy or to cancel the policy and obtain the cash
9 surrender value; or
10 (ii) where an irrevocable arrangement has been made,
11 the buyer shall have the right to change the beneficiary
12 of the policy to a substitute preneed provider.
13 (c) Return of amount owed buyer.--If the buyer cancels a
14 preneed contract, the preneed provider shall return any amount
15 owed to the buyer within 30 days of receiving notice of the
16 cancellation.
17 (d) Notice of option to change beneficiary or assignee of
18 policy.--If a buyer of a preneed contract funded by a preneed
19 insurance policy cancels the contract after the 30-day
20 cancellation period, the insurance policy is not thereby
21 canceled. The buyer shall be notified of the buyer's option to
22 change the beneficiary or assignee of the policy by a notice
23 sent to the buyer by the preneed provider within 30 days of
24 receiving notice of the cancellation.
25 (e) Substitution of preneed provider.--If the contract
26 beneficiary of a preneed contract moves or dies out of the
27 service area of the preneed provider, the buyer or the contract
28 beneficiary's estate may cancel the contract or substitute
29 another who agrees to perform at any time before original
30 preneed provider performance on the contract. If the contract is
19930H2347B3946 - 16 -
1 canceled after the 30-day cancellation period for this reason,
2 in addition to the rights set out in subsection (b), the preneed
3 provider shall return to the canceling party any amounts
4 retained by the preneed provider under section 12. If another
5 preneed provider agrees to perform, the original preneed
6 provider shall transfer any amounts retained under section 12 to
7 the substitute preneed provider.
8 Section 10. Credit life insurance.
9 (a) Option to purchase.--When the preneed contract is to be
10 paid in installments, the preneed provider may make arrangements
11 to offer the buyer the option to acquire and maintain credit
12 life insurance on the life of the buyer. The insurance shall
13 provide for the payment of death benefits to the preneed
14 provider in an amount equal to the total of all contract
15 payments unpaid as of the date of the buyer's death and shall be
16 used solely to make those unpaid payments.
17 (b) Disclosure of costs.--All costs of the insurance shall
18 be disclosed in clear language, and inquiry shall be made of the
19 buyer whether he or she understands the terms of the insurance
20 contract and is aware of the total cost of the insurance.
21 (c) Required purchase prohibited.--Under no circumstances
22 may the preneed provider require the buyer to purchase credit
23 life insurance.
24 (d) Compliance with other laws.--Sale of a policy of credit
25 life insurance shall in all other respects be in compliance with
26 the act of September 2, 1961 (P.L.1232, No.540), known as the
27 Model Act for the Regulation of Credit Life Insurance and Credit
28 Accident and Health Insurance, and other applicable laws.
29 Section 11. Funding methods for preneed contracts.
30 (a) Option to fund.--The buyer must be given the option of
19930H2347B3946 - 17 -
1 funding the preneed contract with a trust and may choose not to
2 fund the preneed contract. The preneed provider need not make
3 arrangements to offer a preneed insurance policy as a funding
4 option. A person may not change the method of funding the
5 preneed contract without the buyer's written consent given after
6 receipt of disclosures regarding the proposed new method of
7 funding similar to those required by sections 8, 12 and 13.
8 (b) Trust account.--Within five business days of receipt,
9 100% of the amount received in payment of a preneed contract,
10 unless already used to purchase a preneed insurance policy,
11 shall be deposited into a preneed trust account in a federally
12 insured financial institution. The trust funds may be held in a
13 separate account or a common fund. If held in a common fund,
14 individual records shall be kept. The funds may not be used for
15 any purpose except as authorized by this act and may not be
16 deposited in any account other than the trust account.
17 (c) Purchase of a preneed insurance policy.--A preneed
18 insurance policy may be purchased using the amounts received in
19 payment of the preneed contract at any time within the 30-day
20 cancellation period. The buyer of the preneed contract funded by
21 a preneed insurance policy purchased before expiration of the
22 30-day cancellation period shall have 30 days from the time of
23 payment of the premium for the insurance or annuity contract to
24 cancel it without any penalty and shall be entitled to a full
25 refund. The preneed provider shall provider the buyer with
26 written notice of the extension of time to cancel
27 contemporaneously with delivery of the policy. The notice shall
28 be attached to the policy.
29 (d) Applicability.--This act shall not apply to the funding
30 of a prearranged funeral or burial by the establishment of a POD
19930H2347B3946 - 18 -
1 account in a financial institution.
2 Section 12. Preneed trusts.
3 (a) Transfer of funds from trust account.--Funds received in
4 payment of a preneed contract where the buyer has selected a
5 trust as set forth in section 11(b) as the manner of funding the
6 preneed contract shall be accounted for as follows:
7 (1) Five dollars shall be paid by the preneed provider
8 on a monthly basis to the Preneed Funeral and Burial Contract
9 Guarantee Fund established under section 19.
10 (2) A minimum of 90% of the amount received in payment
11 of a guaranteed price preneed contract shall remain in the
12 trust fund in a federally insured financial institution. The
13 preneed provider may receive up to 10% of the amount paid on
14 the preneed contract but must disclose to the buyer the
15 percentage and amount to be received.
16 (3) One hundred percent of the amount received in
17 payment of a nonguaranteed price preneed contract shall be
18 deposited into a trust fund in a federally insured financial
19 institution.
20 (b) Separate or common trust fund.--The trust funds may be
21 held in a separate account or in a common trust fund. If held in
22 a common fund, individual records shall be kept.
23 (c) Selection of trustee.--The trustee of the fund may be
24 anyone authorized under law to perform the functions of a
25 trustee. Under no circumstances, however, may the preneed
26 provider or any of its employees, agents or affiliates serve as
27 the trustee. The contract beneficiary shall be the beneficiary
28 of the trust.
29 (d) Fiduciary duties.--The trustee is subject to the
30 fiduciary duties imposed by law.
19930H2347B3946 - 19 -
1 (e) Form of trust account.--The preneed trust account may
2 take the form of:
3 (1) a federally insured bank account within this
4 Commonwealth; or
5 (2) any other form of investment within this
6 Commonwealth which may lawfully be established or maintained
7 by the trust department of the financial institution in which
8 the preneed trust account is established.
9 (f) Conflict of interest.--The federally insured financial
10 institution in which trust funds are held shall not be owned by
11 a preneed provider having in excess of 10% of the outstanding
12 stock or under the control of the preneed provider and shall not
13 use any funds required to be held in trust to purchase an
14 increase in any contract or agreement to which the preneed
15 provider is a party, or otherwise to invest, directly or
16 indirectly, in the preneed provider's business operation.
17 (g) Records.--The trustee shall maintain within this
18 Commonwealth in the location specified in the preneed provider's
19 annual report to the Bureau of Consumer Protection a separate,
20 written record for each preneed trust containing the following
21 information:
22 (1) The name, address and telephone number of the
23 preneed contract buyer.
24 (2) The name, address, telephone number, date of birth
25 and Social Security number of the named trust beneficiary.
26 (3) The date on which the preneed trust was originally
27 established and the amount of money originally deposited.
28 (4) The balance in the trust account, on a monthly
29 basis.
30 (5) A description of the form and manner in which the
19930H2347B3946 - 20 -
1 trust funds are invested.
2 (6) A copy of the individual trust agreement or, in the
3 case of a common or commingled trust account, a copy of the
4 master trust agreement for the common account.
5 (7) Written documentation sufficient to demonstrate
6 compliance with the requirements of sections 11 and 14 with
7 respect to all changes in the terms or provisions of the
8 trust.
9 (h) Common or commingled trust account.--In the case of any
10 common or commingled preneed trust account, a separate written
11 record which complies with the requirements of subsection (g)
12 shall be maintained for each separate trust beneficiary.
13 (i) Notice of change of trustee.--The trustee and the
14 preneed provider must notify the buyer, beneficiary and the
15 Bureau of Consumer Protection if there is a change of trustee.
16 (j) Annual report by trustee.--The trustee shall provide the
17 Bureau of Consumer Protection with an annual report of all funds
18 deposited, interest earned, fees paid, withdrawals made and
19 disbursements after performance of contract obligations during
20 the previous year. A copy of the Internal Revenue Service Form
21 1099 shall be furnished to the preneed contract buyers annually.
22 (k) Trust income.--The income from the trust on all preneed
23 contracts shall remain with the principal, but may be used to
24 pay taxes, reasonable trustee fees and administrative expenses
25 incurred in the administration of the trust. The Bureau of
26 Consumer Protection shall, by rule, establish standards for the
27 amount of fees and expenses which may be deducted from the
28 income.
29 (l) Disbursement of trust funds.--No disbursement shall be
30 made to a preneed provider unless the preneed provider has first
19930H2347B3946 - 21 -
1 certified to the trustee, on a form to be prescribed by the
2 Bureau of Consumer Protection, that all obligations have been
3 performed and all goods and services required by the preneed
4 contract have been delivered. The certification shall contain an
5 itemization of the goods and services that it has provided. The
6 amount of the disbursement to a preneed provider shall be as
7 follows:
8 (1) On a guaranteed price contract, the actual price of
9 the items in the preneed contract, as reflected on the
10 preneed provider's current price list.
11 (2) On a nonguaranteed price contract, the actual price
12 of the items in the preneed contract, as reflected on the
13 preneed provider's current price list.
14 (m) Remaining amount.--At the time of disbursement, any
15 amount remaining after disbursement and the payment of trustee
16 fees, administrative expenses and taxes shall be returned to the
17 estate of the buyer.
18 (n) Periodic audits.--The Bureau of Consumer Protection
19 shall order periodic audits of the trust funds with such audits
20 occurring at least once every three years. The cost of the
21 audits shall be borne by the preneed provider.
22 Section 13. Preneed insurance policies.
23 (a) Transfer of funds.--Funds received in payment of a
24 preneed contract where the buyer has selected a preneed
25 insurance policy as the manner of funding the preneed contract
26 shall be distributed as follows:
27 (1) Five dollars to the Preneed Funeral and Burial
28 Contract Guarantee Fund established under section 19.
29 (2) The remaining amount shall be used to purchase the
30 preneed insurance policy.
19930H2347B3946 - 22 -
1 (b) Requiring insurance prohibited.--A preneed provider
2 shall not require a buyer to purchase any insurance policy as a
3 condition of entering into any preneed funeral contract.
4 (c) Sale of insurance.--A person who sells or offers to sell
5 a preneed insurance policy as a manner to fund a preneed
6 contract must be licensed by the Insurance Department to sell
7 insurance in this Commonwealth.
8 (d) Rating of insurance company.--The preneed provider must
9 disclose to the buyer the ratings of the insurance company from
10 which the preneed insurance policy is to be purchased and
11 furnish the buyer with a meaningful key to interpret the ratings
12 before the preneed contract is signed.
13 (e) Required disclosures.--If a preneed insurance policy is
14 used to fund a preneed contract, before the contract is signed,
15 the following must be disclosed:
16 (1) The fact that a preneed insurance policy is being
17 used to fund payment of the total purchase price of the
18 preneed contract.
19 (2) The nature of the relationship among the individuals
20 selling the preneed contract, the preneed provider, the
21 insurer and any other person.
22 (3) The relationship of the preneed insurance policy to
23 the funding of the preneed contract and the nature and
24 existence of any guarantees relating to the preneed contract.
25 (4) The impact on the preneed contract, including any
26 penalties, restrictions, entitlements or obligations,
27 resulting from:
28 (i) any changes in the policy, including, but not
29 limited to, changes in the assignment, beneficiary
30 designation or use of the proceeds;
19930H2347B3946 - 23 -
1 (ii) the policyholder's failure to make premium
2 payments;
3 (iii) cancellation or surrender of the preneed
4 policy by the policyholder;
5 (iv) any difference at the time of delivery between
6 the proceeds of the policy and the amount actually needed
7 to fund the preneed contract;
8 (v) the death of the contract beneficiary in a
9 location not within the preneed provider's service area,
10 which area shall be determined by the buyer; and
11 (vi) the inability of the preneed provider to
12 perform on the preneed contract.
13 (5) The impact on the insurance policy of the buyer's
14 cancellation of the preneed contract, the cash surrender
15 value of the policy at yearly intervals and the option of the
16 buyer to change the beneficiary of the policy if the preneed
17 contract is canceled.
18 (f) Financial information.--If a preneed insurance policy
19 limits death benefits during a period following the inception
20 date of the policy or where the accumulated premiums exceed the
21 death benefit at any point during the first ten years, then a
22 form entitled "Financial Review of this Policy" or a form
23 containing substantially similar information and approved by the
24 Insurance Commissioner shall be completed by the insurer and
25 delivered simultaneously with the policy. In such a case, the
26 cancellation period shall be extended by 10 days.
27 (g) Required notice.--Prior to taking an application for a
28 policy which is subject to the disclosure requirements of
29 subsection (h), the insurer must provide the applicant with a
30 conspicuous notice in the following form or in a form containing
19930H2347B3946 - 24 -
1 substantially similar information approved by the Insurance
2 Commissioner.
3 NOTICE TO APPLICANTS
4 With your policy, you will receive a form entitled
5 "Financial Review of this Policy," showing premiums and
6 benefits for a ten-year period. You should review the
7 form along with your policy and decide whether the policy
8 is suitable for you. If you are not entirely satisfied,
9 please review the cancellation provision on the form for
10 directions on obtaining a full refund of any premiums
11 paid.
12 (h) Payment to preneed provider.--Payment of the proceeds of
13 a preneed insurance policy shall not be made to a preneed
14 provider unless the preneed provider has first certified to the
15 insurance company, on a form to be prescribed by the Bureau of
16 Consumer Protection, that all obligations have been performed
17 and that all goods and services required by the preneed contract
18 have been delivered. The certification shall contain an
19 itemization of the goods and services that the preneed provider
20 has supplied.
21 (i) Remaining proceeds.--At the time of payment of the
22 proceeds of the policy, any proceeds remaining after payment to
23 the preneed provider for performance of the contract shall be
24 returned to the estate of the buyer.
25 (j) Application of act to insurance and annuities.--The
26 requirements of this act relating to preneed insurance policies
27 shall apply to any and all forms of insurance or annuities which
28 are sold or utilized for the purpose of providing funding for a
29 preneed burial contract, regardless of how named.
30 (k) Construction of act.--This act shall not be construed as
19930H2347B3946 - 25 -
1 regulating the business of insurance.
2 Section 14. Performance and substitution of preneed provider.
3 (a) Full and partial performance.--A preneed provider is
4 only entitled to payment of funds from the preneed trust or
5 preneed insurance policy if the contract has been fully
6 performed. If the preneed provider who is a party to the preneed
7 contract has delivered or performed only a portion of the goods
8 and services under the contract, the funds shall be allocated as
9 provided in subsection (d).
10 (b) Inability to fully perform.--If the preneed provider is
11 unable to fully perform the contract, the buyer may:
12 (1) cancel the contract under section 9; or
13 (2) either the preneed provider or the buyer may
14 substitute a different preneed provider for all or part of
15 the contract, if both the buyer and the substitute preneed
16 provider agree.
17 (c) Complete inability to perform.--If the preneed provider
18 is completely unable to perform the contract, the preneed
19 provider shall return any amount the preneed provider has kept
20 from the amounts paid under the contract to:
21 (1) the substitute preneed provider, if one is agreed
22 upon; or
23 (2) the buyer, if the buyer chooses to cancel the
24 contract.
25 (d) Allocation of contract price.--If the original preneed
26 provider is able to perform only part of the contract and the
27 buyer and a substitute preneed provider agree to the substitute
28 preneed provider's performance of the remainder of the contract,
29 the preneed provider named in the contract and the substitute
30 preneed provider shall each be entitled to a total compensation
19930H2347B3946 - 26 -
1 in an amount that is proportional to the contract price of the
2 goods and services that were provided by each. The amount that
3 the original preneed provider shall receive from the funds of
4 the preneed trust or the preneed insurance policy shall be
5 reduced by the amount that it received from the contract
6 payments prior to the placement of any sums in trust or purchase
7 of the preneed insurance policy.
8 Section 15. Change in preneed provider's status.
9 (a) Notice prior to cessation of business.--A preneed
10 provider must notify the buyer of a preneed contract, the
11 trustee of a preneed trust and the Bureau of Consumer Protection
12 of a proposed cessation of business by the preneed provider at
13 least 30 days prior to the effective date of cessation of
14 business. Notice must be in writing by certified mail, return
15 receipt requested.
16 (b) Notice of transfer of ownership.--A preneed provider
17 must notify the buyer of a preneed contract, the trustee of a
18 preneed trust and the Bureau of Consumer Protection of any
19 transfer of ownership or sale or assignment of any assets or
20 stock within ten days after the transfer, sale or assignment.
21 Notice must be in writing by certified mail, return receipt
22 requested.
23 (c) Cancellation by buyer.--If the preneed provider ceases
24 business or transfers ownership and if the buyer chooses to
25 cancel within 30 days of receipt of notice of the action, the
26 buyer shall be entitled to a return of any amounts retained by
27 the preneed provider from the payments on the preneed contract,
28 in addition to the amounts the buyer would be entitled to under
29 section 9.
30 (d) Notice of bankruptcy proceeding.--If the preneed
19930H2347B3946 - 27 -
1 provider makes an assignment for the benefit of creditors or
2 enters into any other debt reorganization plan or is the subject
3 of any bankruptcy or receivership proceeding, the preneed
4 provider shall notify the buyer, the trustee of a preneed trust
5 and the Bureau of Consumer Protection of the action and shall
6 send the buyer an explanation of how the buyer's rights and
7 obligations under the preneed contract will be affected. Notice
8 must be in writing by certified mail, return receipt requested.
9 (e) Assignment of contract.--If the preneed provider is for
10 any reason unable, unwilling or is relieved of its
11 responsibility to perform on the preneed contract, the Bureau of
12 Consumer Protection, with the buyer's permission, may order that
13 the contract be assigned to a substitute preneed provider.
14 (f) Qualifications of substitute preneed provider.--A
15 substitute preneed provider must be licensed by the Commonwealth
16 and registered as a preneed provider. A substitute preneed
17 provider must agree to accept assignment of the preneed
18 contract.
19 Section 16. Substitution of trustee and trusts.
20 The trustee of any preneed trust may transfer the funds held
21 in trust to another trust or a new trustee may be substituted,
22 only upon written notice sent certified mail, return receipt
23 requested to the buyer, the Bureau of Consumer Protection and
24 the preneed provider. Notice shall be sent ten days prior to the
25 transfer or substitution.
26 Section 17. Substitution of goods and services.
27 (a) Unavailability of goods and services specified in
28 contract.--If the particular goods and services specified in the
29 contract are unavailable at the time of delivery, the preneed
30 provider shall furnish without additional charge goods and
19930H2347B3946 - 28 -
1 services similar in style and at least equal in quality of
2 material and workmanship.
3 (b) Evaluation of substitute goods and services.--The
4 evaluation of style and quality shall be based on objective
5 criteria set forth in the contract, as required by section 8.
6 (c) Selection of substitute goods and services.--The person
7 or persons making arrangements for the funeral of the deceased
8 contract beneficiary shall choose the goods and services to be
9 substituted, and this choice must be reasonably based on the
10 standards in subsections (a) and (b). In such case, the person
11 making the funeral arrangements shall be given all the
12 disclosures required by section 7(c).
13 Section 18. Preneed Funeral and Burial Contract Regulation
14 Fund.
15 There shall be established within the State Treasury a
16 separate restricted account to be known as the Preneed Funeral
17 and Burial Contract Regulation Fund into which moneys collected
18 under sections 4(i) and 22(a) shall be deposited for use by the
19 Bureau of Consumer Protection in administering and enforcing
20 this act.
21 Section 19. Preneed Funeral and Burial Contract Guarantee Fund.
22 (a) Establishment.--There is hereby established within the
23 State Treasury a separate interest-bearing, nonlapsing,
24 restricted account known as the Preneed Funeral and Burial
25 Contract Guarantee Fund into which moneys collected under
26 subsection (b) shall be deposited.
27 (b) Deposit of fees.--Each preneed provider shall pay a fee
28 of $5 out of the funds received for each preneed contract and
29 shall forward the fee to the Bureau of Consumer Protection no
30 later than the last business day of each month. The contract
19930H2347B3946 - 29 -
1 shall be recorded by the Bureau of Consumer Protection. Within
2 ten days after receiving the fee, the Bureau of Consumer
3 Protection shall notify the contract buyer by mail of the
4 recording. The fees shall be placed by the Bureau of Consumer
5 Protection in the Preneed Funeral and Burial Contract Guarantee
6 Fund, which shall be under the control of the Bureau of Consumer
7 Protection, and the income on the fees shall accrue to the fund.
8 Moneys in the Preneed Funeral and Burial Contract Guarantee Fund
9 may be expended to purchase insurance to cover losses guaranteed
10 by the Preneed Funeral and Burial Contract Guarantee Fund.
11 (c) Submission of claim.--In the event the buyer of any
12 preneed funeral contract is unable to receive the benefits of
13 the buyer's contract or to receive the funds due by reason of
14 cancellation of the contract, the buyer may submit a claim to
15 the Bureau of Consumer Protection on a form supplied by the
16 Bureau of Consumer Protection. Upon a finding by the Bureau of
17 Consumer Protection that the benefits or return of money paid to
18 the preneed provider is not available to the buyer, the Bureau
19 of Consumer Protection will cause payment to be made to the
20 buyer from the Preneed Funeral and Burial Contract Guarantee
21 Fund. In all such cases the Bureau of Consumer Protection shall
22 be subrogated to the buyer's claims against the preneed provider
23 for any amounts paid from the Preneed Funeral and Burial
24 Contract Guarantee Fund.
25 (d) Payment of award by court.--If the preneed provider's
26 liability for default is subsequently proven, any award made by
27 a court of law up to the amount paid to the buyer shall be made
28 payable to the Preneed Funeral and Burial Contract Guarantee
29 Fund.
30 Section 20. Regulations.
19930H2347B3946 - 30 -
1 The Bureau of Consumer Protection may adopt, after public
2 hearing, such rules and regulations as may be necessary for the
3 enforcement and administration of this act.
4 Section 21. Preneed Funeral and Burial Contract Advisory Board.
5 (a) Establishment.--There is hereby created a Preneed
6 Funeral and Burial Contract Advisory Board to advise the Bureau
7 of Consumer Protection regarding the promulgation of regulations
8 for the administration and enforcement of this act and on all
9 matters relating to preneed burial contracts.
10 (b) Composition.--The board shall be comprised of the
11 following:
12 (1) Two members representing funeral directors.
13 (2) Two members representing cemetery companies.
14 (3) Two members representing senior citizens.
15 (4) One member representing a consumer interest
16 organization.
17 (c) Appointment of members.--The Director of the Bureau of
18 Consumer Protection or a designee shall chair the advisory board
19 and shall appoint the members.
20 (d) Term of members.--All members shall be appointed for a
21 period of two years, except that one-half of the initial members
22 shall serve for three years.
23 (e) Meetings.--The board shall meet at times fixed by the
24 Director of the Bureau of Consumer Protection, but not less than
25 once per year.
26 (f) Annual report.--The board shall prepare an annual report
27 of its activities and shall submit the report to the Consumer
28 Protection and Professional Licensure Committee of the Senate
29 and the Consumer Affairs Committee of the House of
30 Representatives.
19930H2347B3946 - 31 -
1 Section 22. Violations and enforcement.
2 (a) Penalty.--It is a violation of this act for a person to
3 engage in the sale of preneed contracts without complying with
4 the requirements of this act. Violation of this act by a preneed
5 provider is grounds for disciplinary action by its licensing
6 authority. Any person or any preneed provider who violates this
7 act shall pay a civil penalty of not less than $1,000 nor more
8 than $5,000 for each violation.
9 (b) Unfair trade practice.--A violation of this act
10 constitutes a violation of the act of December 17, 1968
11 (P.L.1224, No.387), known as the Unfair Trade Practices and
12 Consumer Protection Law.
13 (c) Private right of action.--A buyer shall have a private
14 right of action against any person who violates this act. In
15 addition to an action for violation of this act, if any preneed
16 provider fails to perform on a preneed contract, the buyer shall
17 also have a cause of action for breach of contract and damages
18 under 13 Pa.C.S. Div. 2 (relating to sales), including
19 incidental and consequential damages. Any buyer who prevails in
20 an action brought for a violation of this act shall be awarded
21 reasonable attorney fees and costs of the action. In an action
22 for violation of any provision of this act, the buyer has a
23 right to inspect and copy any documents relative to the action
24 in the possession of the Bureau of Consumer Protection or any
25 other agency involved in the investigation or enforcement of
26 this act.
27 (d) Investigation and enforcement.--The Bureau of Consumer
28 Protection has the primary responsibility and power to
29 investigate and enforce the provisions of this act. In so doing,
30 the Bureau of Consumer Protection shall coordinate and work with
19930H2347B3946 - 32 -
1 any other agency that has jurisdiction over any matter relating
2 to this act.
3 (e) Employment of counsel and staff.--The Bureau of Consumer
4 Protection shall, using the fees collected under section 4(i)
5 and the penalties collected under subsection (a), employ
6 qualified legal counsel and other staff to monitor, investigate,
7 audit and otherwise be responsible for the enforcement of this
8 act.
9 (f) Referral for criminal prosecution.--If the Bureau of
10 Consumer Protection believes that grounds exist for the criminal
11 prosecution of persons subject to this act, the Bureau of
12 Consumer Protection shall forward to the Attorney General all
13 evidence and other information for prosecution of the case. If
14 the Bureau of Consumer Protection believes that any person or
15 preneed provider has violated any other statute or regulation,
16 the Bureau of Consumer Protection shall forward to the
17 appropriate agency all evidence and other information relating
18 to the alleged violation.
19 (g) Powers of the Bureau of Consumer Protection.--The Bureau
20 of Consumer Protection shall have all powers necessary for the
21 administration and enforcement of this act, including, but not
22 limited to, the power to:
23 (1) investigate and require production of documents
24 relating to any preneed contract, preneed funds or preneed
25 insurance policy;
26 (2) hold hearings and require the appearance of any
27 person;
28 (3) issue cease and desist orders;
29 (4) issue restitution orders;
30 (5) apply to the court for a receivership;
19930H2347B3946 - 33 -
1 (6) apply to the court for injunctions and temporary
2 restraining orders; and
3 (7) suspend or revoke certification.
4 (h) Records and audit.--Every preneed provider shall keep
5 its accounts and records according to generally recognized
6 accounting methods.
7 (i) Annual report.--Every preneed provider shall file with
8 the Bureau of Consumer Protection an annual report on a form
9 prescribed by the Bureau of Consumer Protection, containing the
10 following information:
11 (1) All information required in the application for
12 registration to sell preneed contracts.
13 (2) The total amount of all funds deposited in preneed
14 trusts or used to pay for preneed insurance policies for that
15 year, on an annual and quarterly basis.
16 (3) The total amount of all funds outstanding in preneed
17 trusts or in preneed insurance contracts, on an annual and
18 quarterly basis.
19 (4) The total number and amount of preneed contracts
20 sold, on an annual and quarterly basis.
21 (5) The total number and amount of preneed contracts
22 outstanding, on an annual and quarterly basis.
23 (6) The total amount of money received that year, on an
24 annual and quarterly basis, from the sale of preneed
25 contracts sold in the past year and sold in previous years.
26 (7) The total amount of money received that year, on an
27 annual and quarterly basis, from the interest or other
28 earnings, commissions or other fees from preneed contracts
29 sold in the past year and sold in previous years.
30 (8) The names and addresses of the buyer and contract
19930H2347B3946 - 34 -
1 beneficiary, if different from the buyer, of each contract
2 sold within the last year and the amount of each.
3 (9) The funding methods used for the preneed contracts
4 sold in the last year by the preneed provider and the
5 percentage of contracts, by both amount and number, funded by
6 each method.
7 (10) The number and amount of any withdrawals from, or
8 any changes of status of, any preneed trust account.
9 (11) The names and addresses of each financial
10 institution, investment company, insurance company or other
11 party involved in the funding of preneed contracts by the
12 preneed provider.
13 (12) The location of the preneed provider's
14 establishment and any trustee's accounts and other records.
15 (j) Individual records.--Every preneed provider shall keep
16 individual records for each preneed contract sold. These records
17 shall contain the following information:
18 (1) The name and address of each buyer.
19 (2) The name, address, telephone number and Social
20 Security number of each contract beneficiary.
21 (3) The date and total amount of each contract.
22 (4) If the contract is funded by a preneed trust:
23 (i) the date the trust was originally established;
24 (ii) the amount originally deposited;
25 (iii) the balance in the trust account, on a monthly
26 basis;
27 (iv) a description of the form and manner in which
28 the funds are invested;
29 (v) a copy of the trust agreement or master trust
30 agreement if accounts are commingled; and
19930H2347B3946 - 35 -
1 (vi) the name and address of the trustee and the
2 financial institution establishing the trust.
3 (5) If the contract is funded by a preneed insurance
4 policy:
5 (i) the date the policy was purchased;
6 (ii) the amount paid for the policy; and
7 (iii) the name and address of the insurance company.
8 (6) Written documentation to demonstrate compliance with
9 the requirements for any changes in the terms or provisions
10 of any trust or in the method of funding the contract.
11 (k) Location of records.--All records kept by a preneed
12 provider, trustee or insurance company relating to any preneed
13 contract shall be kept within this Commonwealth.
14 Section 23. Repeals.
15 (a) Absolute.--The following acts and parts of acts are
16 repealed:
17 Section 13(c) of the act of January 14, 1952 (1951 P.L.1898,
18 No.522), known as the Funeral Director Law.
19 Act of August 14, 1963 (P.L.1059, No.459), entitled "An act
20 prohibiting future need sales of cemetery merchandise and
21 services, funeral merchandise and services, except under certain
22 conditions; requiring the establishment of and deposit into a
23 merchandise trust fund of certain amount of the proceeds of any
24 such sale; providing for the administration of such trust funds
25 and the payment of money therefrom; conferring powers and
26 imposing duties on orphans' courts, and prescribing penalties."
27 (b) General.--All other acts and parts of acts are repealed
28 insofar as they are inconsistent with this act.
29 Section 24. Effective date.
30 This act shall take effect in 60 days.
19930H2347B3946 - 36 -
1 "COMMISSION." THE PRENEED FUNERAL AND BURIAL CONTRACT <--
2 COMMISSION.
3 "CONTRACT BENEFICIARY." THE PERSON, WHO MAY BE THE BUYER OR
4 ANOTHER PERSON, WHOSE FUNERAL OR BURIAL IS THE SUBJECT OF THE
5 PRENEED CONTRACT.
6 "INSOLVENCY." A PERSON IS DEEMED TO BE INSOLVENT WHEN THE
7 PRESENT FAIR SALABLE VALUE OF HIS PROPERTY IS LESS THAN THE
8 AMOUNT REQUIRED TO PAY HIS DEBTS.
9 "POD ACCOUNT." A SEPARATE ACCOUNT IN A FEDERALLY INSURED
10 FINANCIAL INSTITUTION WITHIN THIS COMMONWEALTH ALSO REFERRED TO
11 AS A BURIAL RESERVE ACCOUNT FOR THE DEPOSIT OF ALL FUNDS PAID BY
12 THE BUYER AND CREATED BY AND USING BOTH THE BUYER'S AND PRENEED
13 PROVIDER'S NAMES AND WHICH IS PAYABLE TO THE PRENEED PROVIDER
14 ONLY UPON THE DEATH OF THE BUYER.
15 "PRENEED CONTRACT." AN AGREEMENT FOR THE PROVISION OF
16 PRENEED GOODS, PRENEED SERVICES OR BOTH PRENEED GOODS AND
17 PRENEED SERVICES.
18 "PRENEED GOODS AND SERVICES." GOODS OR SERVICES SOLD OR
19 PROVIDED IN CONNECTION WITH THE FINAL DISPOSITION OF HUMAN
20 REMAINS, PURCHASED IN ADVANCE OF NEED AND NOT PROVIDED OR
21 DELIVERED TO A PURCHASER OR BONDED FACILITY WITH EXECUTION OF
22 THE CONTRACT. FOR THE PURPOSE OF THIS ACT, DELIVERY OF PRENEED
23 GOODS AND SERVICES IS CONSIDERED TO HAVE TAKEN PLACE IF THE
24 ACTUAL ORDER IS PLACED WITH THE MANUFACTURER WITHIN 30 DAYS OF
25 THE DATE OF FULL PAYMENT. THE TERM INCLUDES, BUT IS NOT LIMITED
26 TO, CASKETS OR OTHER PRIMARY CONTAINERS, CREMATION OR
27 TRANSPORTATION CONTAINERS, OUTER BURIAL CONTAINERS, VAULTS,
28 GRAVE LINERS, GRAVE MARKERS, FUNERAL CLOTHING OR ACCESSORIES,
29 MONUMENTS, CREMATION URNS, EMBALMING, CREMATION, FUNERAL
30 DIRECTING OR CEMETERY SERVICES AND SIMILAR FUNERAL OR BURIAL
19930H2347B3946 - 37 -
1 ITEMS. THIS ACT SHALL NOT APPLY TO THE SALE OF BURIAL PLOTS.
2 "PRENEED INSURANCE POLICY." ANY FORM OF INSURANCE OR
3 ANNUITY, WHICH IS SOLD OR UTILIZED FOR THE PURPOSE OF PROVIDING
4 FUNDING FOR A PRENEED CONTRACT, REGARDLESS OF HOW NAMED.
5 "PRENEED PROVIDER." A FUNERAL DIRECTOR LICENSED BY THE
6 COMMONWEALTH OR A CEMETERY COMPANY REGISTERED BY THE
7 COMMONWEALTH AND REGISTERED UNDER SECTION 4 TO SELL PRENEED
8 CONTRACTS OR ANY PERSON, PARTNERSHIP, CORPORATION OR OTHER
9 ENTITY REGISTERED UNDER SECTION 4 TO SELL PRENEED CONTRACTS.
10 SECTION 3. CONSTRUCTION AND APPLICATION.
11 (A) UNIFORM COMMERCIAL CODE.--THE PROVISIONS OF 13 PA.C.S.
12 DIV. 2 (RELATING TO SALES) SHALL APPLY TO THE INTERPRETATION AND
13 ENFORCEMENT OF PRENEED CONTRACTS.
14 (B) FIDUCIARY RELATIONSHIP.--A FIDUCIARY RELATIONSHIP SHALL
15 EXIST BETWEEN A PRENEED PROVIDER AND A BUYER.
16 SECTION 4. REGISTRATION.
17 (A) REGISTRATION REQUIREMENT.--A PRENEED PROVIDER SHALL NOT
18 OFFER, SELL, ADVERTISE, PROMOTE OR ENTER INTO A PRENEED CONTRACT
19 WITHOUT FIRST OBTAINING A PRENEED REGISTRATION FROM THE
20 COMMISSION. THE REGISTRATION MUST BE RENEWED ON AN ANNUAL BASIS.
21 (B) APPLICATION.--A PRENEED PROVIDER SEEKING TO OBTAIN
22 PRENEED REGISTRATION SHALL SUBMIT A REGISTRATION FEE OF $150 AND
23 AN APPLICATION ON A FORM PRESCRIBED BY THE COMMISSION WHICH
24 CONTAINS THE FOLLOWING:
25 (1) THE TYPES OF PRENEED CONTRACTS TO BE WRITTEN.
26 (2) THE TYPES OF GOODS AND SERVICES TO BE SOLD.
27 (3) EACH NAME, ADDRESS AND TELEPHONE NUMBER OF THE PLACE
28 OF BUSINESS OF THE PRENEED PROVIDER.
29 (4) THE NAME, ADDRESS, TELEPHONE NUMBER AND SOCIAL
30 SECURITY NUMBER OF EACH OWNER, OFFICER OR OTHER OFFICIAL OF
19930H2347B3946 - 38 -
1 THE PRENEED PROVIDER OR, IF THE PRENEED PROVIDER IS A
2 CORPORATION, OF THE CHIEF EXECUTIVE OFFICER AND ALL MEMBERS
3 OF THE BOARD OF DIRECTORS.
4 (5) THE NAMES AND ADDRESSES OF ALL TRUSTEES INVOLVED
5 WITH EXISTING PRENEED FUNERAL AND BURIAL FUNDS AND THE
6 CURRENT BALANCES IN THE TRUST ACCOUNTS. IN ADDITION, A COPY
7 OF THE MOST RECENT FILINGS OF ALL PRENEED ACCOUNTS REQUIRED
8 UNDER LAWS REPEALED BY THIS ACT OR EXISTING APPLICABLE LAWS
9 AND REGULATIONS FOR FUNERAL HOMES, CEMETERIES AND OTHERS
10 INVOLVED IN PRENEED SALES.
11 (6) ANY INFORMATION DEEMED NECESSARY BY THE COMMISSION
12 TO SHOW EVIDENCE OF A REPUTATION FOR FAIR DEALING AND
13 FINANCIAL RESPONSIBILITY IN BUSINESS MATTERS AND THE ABSENCE
14 OF A CRIMINAL RECORD. THE COMMISSION SHALL ALSO HAVE THE
15 RIGHT TO REQUIRE THE APPLICANT TO SUBMIT A FINANCIAL
16 STATEMENT PREPARED BY AN ACCOUNTANT TO ESTABLISH FINANCIAL
17 STABILITY. THE INFORMATION MAY SPECIFICALLY INCLUDE THE
18 NUMBER OF CIVIL JUDGMENTS OR LIENS, ESPECIALLY BANKRUPTCIES,
19 OR ANY ADMINISTRATIVE ACTION BY THE FEDERAL OR STATE
20 GOVERNMENT DEALING WITH FINANCIAL RESPONSIBILITY.
21 (C) INDIVIDUAL REGISTRATION.--A PERSON SHALL NOT OFFER,
22 SELL, ADVERTISE OR PROMOTE ANY PRENEED CONTRACT WITHOUT FIRST
23 OBTAINING A PRENEED INDIVIDUAL REGISTRATION FROM THE COMMISSION.
24 THE REGISTRATION MUST BE RENEWED ON A YEARLY BASIS. IN ADDITION
25 TO THE REGISTRATION REQUIRED UNDER THIS ACT, ALL CEMETERY
26 SALESPERSONS MUST BE LICENSED BY THE STATE REAL ESTATE
27 COMMISSION AND ONLY FUNERAL DIRECTORS LICENSED BY THE STATE
28 BOARD OF FUNERAL DIRECTORS SHALL BE AUTHORIZED TO SELL PRENEED
29 FUNERAL SERVICES.
30 (D) INDIVIDUAL APPLICATION.--A PERSON SEEKING TO OBTAIN A
19930H2347B3946 - 39 -
1 PRENEED INDIVIDUAL REGISTRATION MUST BE AT LEAST 21 YEARS OF AGE
2 OR OLDER AND MUST SUBMIT A REGISTRATION FEE OF $50 AND AN
3 APPLICATION ON A FORM PRESCRIBED BY THE COMMISSION WHICH
4 INCLUDES THE FOLLOWING:
5 (1) THE NAME, ADDRESS, TELEPHONE NUMBER AND SOCIAL
6 SECURITY NUMBER OF THE PERSON.
7 (2) THE NAME, BUSINESS ADDRESS AND TELEPHONE NUMBER OF
8 THE PRENEED PROVIDER FOR WHOM THE PERSON IS AUTHORIZED TO
9 SELL PRENEED CONTRACTS AND OF ALL OTHER PRENEED PROVIDERS WHO
10 WILL BE PROVIDING GOODS AND SERVICES UNDER THE CONTRACTS.
11 (3) ANY INFORMATION DEEMED NECESSARY BY THE COMMISSION
12 TO SHOW EVIDENCE OF A REPUTATION FOR FAIR DEALING AND
13 FINANCIAL RESPONSIBILITY IN BUSINESS MATTERS AND THE ABSENCE
14 OF A CRIMINAL RECORD.
15 (4) A PHOTOGRAPH OF THE PERSON TAKEN WITHIN THE LAST SIX
16 MONTHS.
17 (E) RESTRICTIONS ON INDIVIDUAL REGISTRANTS.--A PERSON
18 REGISTERED UNDER THIS ACT MUST BE AN EMPLOYEE OR AGENT OF A
19 PRENEED PROVIDER WHICH HOLDS A VALID PRENEED PROVIDER
20 REGISTRATION AND WHICH CAN DELIVER THE GOODS AND SERVICES SOLD.
21 THE PRENEED PROVIDER SHALL BE LIABLE FOR THE ACTS OF ITS
22 EMPLOYEES AND AGENTS, INDEPENDENT OR OTHERWISE, PERFORMED IN
23 CONNECTION WITH A PRENEED CONTRACT. IF THE PRENEED PROVIDER
24 CHANGES OWNERSHIP, THEN THE INDIVIDUAL MUST BE RELICENSED AT
25 THAT NEW ESTABLISHMENT IN ACCORDANCE WITH THIS ACT.
26 (F) DISPLAY OF REGISTRATION.--UPON ISSUANCE, THE PRENEED
27 REGISTRATION SHALL BE POSTED CONSPICUOUSLY IN THE PRENEED
28 PROVIDER'S PLACE OF BUSINESS.
29 (G) OUTSIDE SOLICITATION.--A PERSON REGISTERED UNDER THIS
30 ACT WHO ENGAGES IN SOLICITATION OUTSIDE OF THE PRENEED
19930H2347B3946 - 40 -
1 PROVIDER'S PRINCIPAL PLACE OF BUSINESS SHALL PRESENT A COPY OF
2 HIS REGISTRATION AND WRITTEN AUTHORIZATION FROM THE PRENEED
3 PROVIDER UPON ENTRY ONTO THE PREMISES WHERE THE PROSPECTIVE
4 BUYER IS BEING SOLICITED.
5 (H) NOTICE OF CHANGES.--A PRENEED PROVIDER OR PERSON
6 REGISTERED UNDER THIS ACT MUST NOTIFY THE COMMISSION WITHIN 30
7 DAYS OF ANY CHANGE OF ANY INFORMATION REQUIRED BY THE COMMISSION
8 FOR PRENEED REGISTRATION.
9 (I) FEES.--A PRENEED PROVIDER OR A PERSON APPLYING FOR
10 PRENEED REGISTRATION SHALL PAY THE COMMISSION AN ANNUAL FEE AS
11 SET FORTH IN SECTION 4(B) AND (D), RESPECTIVELY. THE COMMISSION
12 SHALL DEPOSIT ALL FEES INTO THE PRENEED FUNERAL AND BURIAL
13 CONTRACT REGULATION FUND ESTABLISHED UNDER SECTION 17.
14 (J) DENIAL AND REVOCATION OR SUSPENSION OF REGISTRATION.--
15 (1) THE COMMISSION SHALL NOT GRANT OR RENEW A PRENEED
16 REGISTRATION AND MAY REVOKE OR SUSPEND ANY PREVIOUSLY GRANTED
17 PRENEED REGISTRATION IF THE COMMISSION FINDS THAT:
18 (I) THE APPLICANT OR REGISTRANT IS INSOLVENT;
19 (II) THE APPLICANT OR REGISTRANT IS WILLING OR
20 UNABLE TO PROVIDE THE GOODS OR SERVICES DESCRIBED IN ITS
21 APPLICATION;
22 (III) THE APPLICANT OR REGISTRANT HAS ENGAGED IN A
23 DECEPTIVE ACT OR PRACTICE OR HAS DELIBERATELY
24 MISREPRESENTED OR OMITTED A MATERIAL FACT RELATIVE TO THE
25 SALE OF PRENEED CONTRACTS; OR
26 (IV) THE APPLICANT OR REGISTRANT HAS BEEN CONVICTED
27 OF ANY FELONY INVOLVING DISHONESTY, FALSE STATEMENT OR
28 INTIMIDATION.
29 (2) THE COMMISSION SHALL NOT GRANT OR RENEW A PRENEED
30 REGISTRATION AND SHALL REVOKE OR SUSPEND ANY PREVIOUSLY
19930H2347B3946 - 41 -
1 GRANTED PRENEED REGISTRATION IF SO DIRECTED BY A COURT OF
2 COMPETENT JURISDICTION OR THE APPROPRIATE LICENSING BOARD OR
3 ADMINISTRATIVE AGENCY.
4 (3) THE COMMISSION MAY EXERCISE ITS DISCRETION IN
5 DETERMINING WHETHER TO GRANT OR RENEW A REGISTRATION IF THE
6 PROVIDER:
7 (I) HAS FAILED TO COMPLY WITH ANY REQUIREMENTS OF
8 THIS ACT OR ANY REGULATIONS PROMULGATED UNDER THIS ACT;
9 OR
10 (II) HAS BEEN CONVICTED OF ANY CRIME INVOLVING
11 DISHONESTY OR FALSE STATEMENT.
12 SECTION 5. DISCRIMINATION PROHIBITED.
13 PRENEED PROVIDERS SHALL NOT DISCRIMINATE AGAINST BUYERS ON
14 THE BASIS OF RACE, COLOR, RELIGION, NATIONAL ORIGIN, MARITAL
15 STATUS, SEX, AGE OR OTHER CLASSIFICATION PROHIBITED BY LAW.
16 SECTION 6. MARKETING AND SOLICITATION.
17 (A) SOLICITATION OF PATIENTS.--A PRENEED PROVIDER OR AN
18 AGENT OR EMPLOYEE OF A PRENEED PROVIDER SHALL NOT VISIT OR CALL
19 UPON A PATIENT IN A HOSPITAL, CONVALESCENT OR NURSING HOME, REST
20 HOME, CHARITABLE HOME FOR THE AGED, INFIRMARY, INTERMEDIATE CARE
21 FACILITY FOR PERSONS WITH MENTAL DISABILITIES OR OTHER HEALTH
22 CARE FACILITY FOR THE PURPOSE OF SOLICITING OR INDUCING THE
23 PATIENT TO ENTER INTO ANY PRENEED CONTRACT, ESTABLISH A PRENEED
24 TRUST OR PURCHASE A PRENEED INSURANCE POLICY, UNLESS:
25 (1) THE PRENEED PROVIDER, AGENT OR EMPLOYEE HAS RECEIVED
26 A REQUEST TO VISIT OR COMMUNICATE FROM THE INDIVIDUAL OR THE
27 INDIVIDUAL'S AUTHORIZED REPRESENTATIVE PRIOR TO THE DATE OF
28 THE VISIT;
29 (2) THE PRENEED PROVIDER, AGENT OR EMPLOYEE PRESENTS THE
30 REGISTRATION REQUIRED BY THIS ACT; AND
19930H2347B3946 - 42 -
1 (3) THE PRENEED PROVIDER, AGENT OR EMPLOYEE EXPLAINS AT
2 THE BEGINNING OF THE VISIT THAT THE PURPOSE OF THE VISIT IS
3 TO PERSUADE THE PATIENT TO EXECUTE A PRENEED CONTRACT OR
4 PRENEED INSURANCE POLICY.
5 (B) SOLICITATION IN THE HOME.--AN PRENEED PROVIDER, AGENT OR
6 EMPLOYEE OF A PRENEED PROVIDER SHALL NOT VISIT OR CALL UPON ANY
7 PERSON IN THE PERSON'S HOME FOR THE PURPOSE OF SOLICITING OR
8 CONTRACTING WITH THE PERSON TO ENTER INTO ANY PRENEED CONTRACT,
9 ESTABLISH A PRENEED TRUST OR PURCHASE A PRENEED INSURANCE
10 POLICY, UNLESS:
11 (1) THE PRENEED PROVIDER, AGENT OR EMPLOYEE HAS RECEIVED
12 A REQUEST TO VISIT OR COMMUNICATE FROM THE INDIVIDUAL OR THE
13 INDIVIDUAL'S AUTHORIZED REPRESENTATIVE PRIOR TO THE DATE OF
14 THE VISIT;
15 (2) THE PRENEED PROVIDER, AGENT OR EMPLOYEE PRESENTS THE
16 REGISTRATION REQUIRED BY THIS ACT; AND
17 (3) THE PRENEED PROVIDER, AGENT OR EMPLOYEE EXPLAINS AT
18 THE BEGINNING OF THE VISIT THAT THE PURPOSE OF THE VISIT IS
19 TO PERSUADE THE PERSON TO EXECUTE A PRENEED CONTRACT OR
20 PRENEED INSURANCE POLICY.
21 (C) TELEPHONE SOLICITATION.--TELEPHONE SOLICITATION OF
22 PRENEED CONTRACTS AND PRENEED INSURANCE POLICIES IS PERMITTED IF
23 ALL OF THE FOLLOWING CONDITIONS ARE MET:
24 (1) THE PERSON CALLING CLEARLY IDENTIFIES HIMSELF AND
25 THE PRODUCT AT THE BEGINNING OF THE COMMUNICATION.
26 (2) THE PERSON CALLING INFORMS THE PROSPECTIVE BUYER AT
27 THE BEGINNING OF THE COMMUNICATION THAT THE PURPOSE OF THE
28 CALL IS TO SOLICIT THE PROSPECTIVE BUYER TO EXECUTE A PRENEED
29 CONTRACT OR INSURANCE POLICY.
30 (3) THE COMMUNICATION IS TERMINATED IMMEDIATELY UPON ANY
19930H2347B3946 - 43 -
1 REQUEST TO DO SO FROM THE PROSPECTIVE BUYER.
2 (D) DISCLOSURE OF INFORMATION.--AT THE BEGINNING OF ANY
3 DISCUSSION OF ANY PRENEED CONTRACT, THE PRENEED PROVIDER OR ITS
4 AGENT OR EMPLOYEE MUST GIVE THE PROSPECTIVE BUYER ALL
5 INFORMATION REQUIRED BY SECTION 7. ALL PRICES ON THE LISTS MUST
6 BE THE SAME AS THOSE FOR AT-NEED FUNERAL OR BURIAL GOODS AND
7 SERVICES AT THE PRENEED PROVIDER'S ESTABLISHMENT.
8 (E) DECEPTIVE PRACTICES PROHIBITED.--A PRENEED PROVIDER AND
9 ITS AGENTS AND EMPLOYEES SHALL NOT USE ANY MEANS, INCLUDING
10 ADVERTISEMENTS, WHICH ARE UNFAIR, FALSE, DECEPTIVE, MISLEADING,
11 COERCIVE, INTIMIDATING OR THREATENING IN SOLICITING OR
12 CONTRACTING WITH ANY INDIVIDUAL.
13 (F) INTERFERENCE WITH EXISTING CONTRACT PROHIBITED.--A
14 PRENEED PROVIDER AND ITS AGENTS AND EMPLOYEES SHALL NOT
15 KNOWINGLY INDUCE OR ATTEMPT TO INDUCE ANY PERSON TO CANCEL OR
16 REVOKE ANY PREEXISTING PRENEED CONTRACT, PRENEED TRUST OR
17 PRENEED INSURANCE POLICY.
18 (G) ADVERTISEMENTS.--ALL ADVERTISING IN A BROCHURE, PAMPHLET
19 OR SIMILAR DOCUMENT USED IN SOLICITATION OF PRENEED CONTRACTS,
20 PRENEED TRUSTS OR PRENEED INSURANCE POLICIES SHALL DISCLOSE THE
21 FOLLOWING INFORMATION:
22 (1) A DESCRIPTION OF THE TYPE OF FUNDING ARRANGEMENT
23 WHICH IS TO BE USED TO FUND THE PRENEED CONTRACT.
24 (2) AN EXPLANATION OF THE NATURE OF THE RELATIONSHIP
25 BETWEEN THE AGENT WHO SOLICITS THE PURCHASE, THE PRENEED
26 PROVIDER, THE BUYER AND THE FEDERALLY INSURED INSTITUTION
27 WITHIN THE COMMONWEALTH WHICH WILL RECEIVE OR HOLD ANY FUNDS
28 PAID IN CONNECTION WITH THE PURCHASE OF THE PRENEED CONTRACT.
29 (H) NEGATIVE OPTION PLANS PROHIBITED.--THERE SHALL BE NO
30 NEGATIVE OPTION PLANS IN ACCORDANCE WITH THE FEDERAL TRADE
19930H2347B3946 - 44 -
1 COMMISSION'S REGULATIONS AT SCFR PART 425.
2 SECTION 7. GENERAL CONTRACT REQUIREMENTS.
3 (A) SIGNING OF CONTRACT.--EVERY PRENEED CONTRACT MUST BE
4 SIGNED BY AN INDIVIDUAL REGISTERED PRENEED PROVIDER AND BE IN
5 WRITING.
6 (B) WAIVER OF REQUIRED PROVISIONS VOID.--NO PROVISIONS OF
7 ANY CONTRACT REQUIRED BY THIS ACT MAY BE WAIVED. ANY ATTEMPTED
8 WAIVER IS VOID.
9 (C) REQUIRED DISCLOSURES.--BEFORE AN AGREEMENT OR CONTRACT
10 IS SIGNED, ALL PRENEED PROVIDERS, EVEN IF NOT REQUIRED TO DO SO
11 BY 16 CFR PART 453 (RELATING TO FUNERAL INDUSTRY PRACTICES),
12 MUST PROVIDE EVERY PROSPECTIVE BUYER OF A PRENEED CONTRACT WITH
13 ALL DISCLOSURES DESCRIBED IN OR REQUIRED BY THE PROVISIONS OF 16
14 CFR PART 453. FOR ITEMS COVERED BY THIS ACT WHICH ARE NOT
15 COVERED BY THE PROVISIONS OF 16 CFR PART 453, ALL PRENEED
16 PROVIDERS SHALL PROVIDE DISCLOSURES SIMILAR TO THOSE REQUIRED BY
17 16 CFR PART 453.
18 (D) INVESTMENT INFORMATION.--WITH NONGUARANTEED PLANS, ALL
19 PRENEED PROVIDERS MUST DISCLOSE, BEFORE AN AGREEMENT OR CONTRACT
20 IS SIGNED, THE FOLLOWING:
21 (1) (I) WHERE TRUST FUNDS ARE INVESTED AND THE CURRENT
22 RATE OF RETURN; OR
23 (II) THE NAMES OF THE INSURANCE COMPANY WRITING A
24 LIFE INSURANCE POLICY TO FUND THE PRENEED CONTRACT AND,
25 WITH POLICIES WHERE THE ACCUMULATED PREMIUMS EXCEED THE
26 DEATH BENEFIT AT ANY POINT DURING THE FIRST TEN YEARS,
27 THE FACT THAT A COMPARISON OF PREMIUMS AND BENEFITS WILL
28 BE PROVIDED (FINANCIAL REVIEW OF THIS POLICY) WHEN THE
29 POLICY IS MAILED TO THE CONSUMER.
30 (2) THAT THE CONTRACT CONFORMS TO FEDERAL AND STATE LAW
19930H2347B3946 - 45 -
1 AND REGULATIONS.
2 SECTION 8. SPECIFIC CONTRACT REQUIREMENTS AND DISCLOSURES.
3 (A) PLAIN LANGUAGE.--THE PROVISIONS OF THE ACT OF JUNE 23,
4 1993 (P.L.128, NO.29), KNOWN AS THE PLAIN LANGUAGE CONSUMER
5 CONTRACT ACT, SHALL APPLY TO PRENEED CONTRACTS.
6 (B) IDENTIFICATION OF PARTIES.--EACH CONTRACT SHALL IDENTIFY
7 THE PRENEED PROVIDER, THE PRENEED PROVIDER'S ADDRESS AND
8 TELEPHONE NUMBER, REGISTRATION NUMBER AND INDIVIDUAL
9 REGISTRATION NUMBER OF THE SALESPERSON AND SHALL IDENTIFY THE
10 BUYER AND THE CONTRACT BENEFICIARY, IF OTHER THAN THE BUYER, AND
11 SET FORTH THEIR ADDRESSES.
12 (C) IDENTIFICATION OF SERVICES.--EACH CONTRACT SHALL SPECIFY
13 AND ITEMIZE THE SERVICES OR GOODS, OR BOTH, TO BE PROVIDED AND
14 CONTAIN A STATEMENT OF THE LAW REGARDING SUBSTITUTION IN
15 ACCORDANCE WITH SECTION 17. GOODS SHALL BE DESCRIBED IN DETAIL.
16 THE CONTRACT SHALL CONTAIN SPECIFICATIONS OF MATERIALS AND
17 CONSTRUCTION AND A DESCRIPTION AND THE COST OF EACH ITEM SHALL
18 BE REQUIRED TO BE SHOWN ON THE PRENEED PROVIDER'S CURRENT PRICE
19 SHEET, A COPY OF WHICH SHALL BE PROVIDED TO THE INDIVIDUAL. THE
20 PRICE OF ALL GOODS AND SERVICES SHALL BE ITEMIZED IN ACCORDANCE
21 WITH FEDERAL TRADE COMMISSION RULES (16 FCR PART 453) AS
22 APPLICABLE TO THE SALE OF FUNERAL GOODS AND SERVICES AND AS
23 LISTED ON THE CURRENT PRICE LIST FOR PRENEED PROVIDERS NOT
24 COVERED BY THE CURRENT FUNERAL LAW IN THE ACT OF JANUARY 14,
25 1952 (1951 P.L.1898, NO.522), KNOWN AS THE FUNERAL DIRECTOR LAW.
26 (D) PURCHASE PRICE.--EACH CONTRACT SHALL SET FORTH EACH ITEM
27 AND PRICE AND THE TOTAL PURCHASE PRICE AND TERMS UNDER WHICH IT
28 IS TO BE PAID, INCLUDING ANY CREDIT TERMS, IF APPLICABLE.
29 (E) METHOD OF FUNDING.--
30 (1) EACH CONTRACT SHALL STATE CLEARLY WHETHER IT IS
19930H2347B3946 - 46 -
1 FUNDED OR UNFUNDED AND, IF IT IS FUNDED, WHETHER IT IS FUNDED
2 BY A PRENEED TRUST FUND OR BY A PRENEED INSURANCE POLICY.
3 (2) THE CONTRACT SHALL ALSO STATE WHETHER IT IS A
4 GUARANTEED PRICE CONTRACT IN WHOLE OR IN PART OR A
5 NONGUARANTEED PRICE CONTRACT.
6 (F) GUARANTEED PRICE CONTRACTS.--EACH GUARANTEED PRICE
7 CONTRACT SHALL CONTAIN THE FOLLOWING STATEMENT IN 12-POINT BOLD
8 TYPE:
9 THIS CONTRACT IN WHOLE OR IN PART GUARANTEES THE BUYER
10 THE SPECIFIC GOODS AND SERVICES CONTRACTED FOR AND WILL
11 BE DELIVERED AT THE AGREED-TO PRICE. NO ADDITIONAL
12 CHARGES SHALL BE REQUIRED FOR THE ITEMS SPECIFIED IN THE
13 CONTRACT.
14 (G) NONGUARANTEED PRICE CONTRACTS.--EACH NONGUARANTEED PRICE
15 CONTRACT SHALL CONTAIN THE FOLLOWING STATEMENT IN 12-POINT BOLD
16 TYPE:
17 THIS CONTRACT DOES NOT GUARANTEE THE BUYER ANY SPECIFIC
18 GOODS OR SERVICES. ANY FUNDS PAID UNDER THIS CONTRACT MAY
19 BE ONLY A DEPOSIT TO BE APPLIED TOWARD THE FINAL COSTS OF
20 THE GOODS OR SERVICES CONTRACTED FOR. ADDITIONAL CHARGES
21 MAY BE REQUIRED TO PROVIDE THE GOODS AND SERVICES
22 DESIRED.
23 (H) CONTRACT FUNDED BY PRENEED TRUST.--EACH CONTRACT FUNDED
24 BY A PRENEED TRUST SHALL CONTAIN THE FOLLOWING:
25 (1) THE NAME AND ADDRESS OF THE TRUSTEE, TRUST AND
26 BENEFICIARY.
27 (2) THE AMOUNT OF MONEY TO BE PLACED IN TRUST.
28 (3) THE PERCENTAGE AND TOTAL AMOUNT PAID ON THE PRENEED
29 CONTRACT THAT THE PRENEED PROVIDER WILL RETAIN AND NOT
30 DEPOSIT INTO THE PRENEED TRUST.
19930H2347B3946 - 47 -
1 (4) AN EXPLANATION OF THE DISPOSITION OF THE INTEREST,
2 INCLUDING A STATEMENT OF THE FEES, EXPENSES AND TAXES WHICH
3 MAY BE DEDUCTED FROM THE INTEREST UNDER SECTION 12.
4 (5) A STATEMENT OF THE BUYER'S RESPONSIBILITY FOR TAXES
5 OWED ON THE INTEREST.
6 (I) CONTRACT FUNDED BY PRENEED INSURANCE POLICY.--EACH
7 CONTRACT FUNDED BY A PRENEED INSURANCE POLICY SHALL CONTAIN THE
8 FOLLOWING:
9 (1) THE NAME OF THE COMPANY WRITING THE INSURANCE
10 POLICY.
11 (2) OTHER DISCLOSURES REQUIRED BY SECTION 12.
12 (J) DISCLOSURE STATEMENT.--EACH CONTRACT SHALL BE
13 ACCOMPANIED BY A DISCLOSURE STATEMENT CONTAINING THE FOLLOWING:
14 (1) THE NAME AND ADDRESS OF THE BUREAU OF CONSUMER
15 PROTECTION AND THE PROCEDURE FOR SUBMITTING COMPLAINTS TO THE
16 BUREAU OF CONSUMER PROTECTION.
17 (2) A STATEMENT NOTIFYING THE BUYER OF THE $5 PRENEED
18 FUNERAL AND BURIAL CONTRACT GUARANTEE FUND FEE.
19 (3) THE FOLLOWING STATEMENT OF THE BUYER'S CANCELLATION
20 RIGHTS UNDER SECTION 9(A) IN 12-POINT BOLD TYPE:
21 YOU HAVE THE RIGHT TO CANCEL THIS CONTRACT AT ANY TIME
22 DURING THE FIRST 10 BUSINESS DAYS. IF YOU DO SO, YOU MUST
23 RECEIVE BACK 100% OF THE MONEY YOU HAVE PAID. IF THIS
24 CONTRACT IS FUNDED BY A PRENEED INSURANCE POLICY, IT IS
25 IMPORTANT TO CHECK THE CANCELLATION POLICY, FOR IT MAY
26 ALLOW LONGER THAN 10 BUSINESS DAYS TO CANCEL AND THE
27 ABILITY TO RECEIVE A FULL REFUND. CONSULT YOUR INSURANCE
28 POLICY AND ATTACHMENTS FOR INFORMATION REGARDING YOUR
29 TIME TO CANCEL.
30 (4) (I) THE FOLLOWING STATEMENT OF THE BUYER'S
19930H2347B3946 - 48 -
1 CANCELLATION RIGHTS UNDER SECTION 9(B) IN 12-POINT BOLD
2 TYPE:
3 IF NO IRREVOCABLE PRENEED CONTRACT ARRANGEMENT HAS BEEN
4 MADE, YOU HAVE THE RIGHT TO CANCEL THIS CONTRACT AT ANY
5 TIME AFTER THE FIRST 10 BUSINESS DAYS. IF YOU CANCEL A
6 CONTRACT FUNDED BY A PRENEED TRUST, YOU WILL RECEIVE A
7 REFUND OF ALL THE MONEY PLACED IN TRUST, PLUS ANY
8 INTEREST EARNED. ONLY REASONABLE ADMINISTRATIVE FEES AND
9 ANY TAXES YOU MAY HAVE AUTHORIZED TO BE PAID FROM THE
10 INTEREST MAY BE DEDUCTED FROM THIS AMOUNT, AS SPECIFIED
11 BY LAW. IF YOU CANCEL AFTER 10 BUSINESS DAYS, YOU WILL
12 NOT RECEIVE A REFUND OF THE $.........(........%) THAT,
13 BY THE TERMS OF THIS AGREEMENT, IS NOT PLACED IN TRUST.
14 IF YOU CANCEL A CONTRACT FUNDED BY A PRENEED INSURANCE
15 POLICY AFTER THE TIME FOR A FULL REFUND, YOU MAY NOT WANT
16 TO CANCEL THE INSURANCE POLICY ITSELF AND YOU MAY WANT TO
17 CHANGE THE BENEFICIARY OR ASSIGNEE ON THE POLICY. CONSULT
18 YOUR CONTRACT AND ACCOMPANYING DOCUMENTS FOR INFORMATION
19 REGARDING THE IMPACT OF CANCELLATION OF THE CONTRACT AND
20 OTHER CHANGES.
21 (II) IF AN IRREVOCABLE ARRANGEMENT HAS BEEN MADE,
22 YOU HAVE THE RIGHT TO CHANGE THE BENEFICIARY OF THE
23 POLICY TO A SUBSTITUTE PRENEED PROVIDER.
24 (5) THE FOLLOWING STATEMENT OF THE BUYER'S RIGHTS
25 RELATING TO FUNDING METHODS IN 12-POINT BOLD TYPE:
26 YOU HAVE THE RIGHT TO FUND THIS CONTRACT BY ANY METHOD
27 THAT YOU CHOOSE. YOU MAY CHOOSE TO FUND THIS CONTRACT
28 THROUGH YOUR OWN INVESTMENT, THROUGH A PRENEED TRUST
29 ACCOUNT OR THROUGH A LIFE INSURANCE POLICY OR ANNUITY,
30 INCLUDING ANY PRENEED INSURANCE POLICY THAT MAY BE
19930H2347B3946 - 49 -
1 OFFERED BY THE PRENEED PROVIDER. SALE OF THIS CONTRACT
2 CANNOT BE CONDITIONED ON PURCHASE OF ANY INSURANCE POLICY
3 OR ANNUITY.
4 (6) A STATEMENT EXPLAINING THE BUYER'S RIGHTS REGARDING
5 CHANGES IN OR RELATING TO THE FUNDING METHOD.
6 (K) EFFECT OF INSOLVENCY OF PRENEED PROVIDER.--EACH CONTRACT
7 SHALL CONTAIN THE FOLLOWING PROVISION:
8 IF THE PRENEED PROVIDER IS THE SUBJECT OF A BANKRUPTCY OR
9 OTHER INSOLVENCY PROCEEDINGS, THE PRENEED PROVIDER WILL
10 BE IN DEFAULT ON THIS CONTRACT, AND THE FULL AMOUNT PAID
11 BY THE BUYER UNDER THE CONTRACT, TOGETHER WITH ANY
12 INTEREST OR OTHER EARNINGS, LESS ANY REASONABLE
13 ADMINISTRATIVE EXPENSES OR TAXES ALREADY PAID, WILL
14 BECOME IMMEDIATELY DUE AND OWING, WITHOUT NOTICE FROM THE
15 BUYER.
16 (L) PREAPPROVAL OF CONTRACT.--THE PRENEED PROVIDER SHALL
17 SUBMIT THE FORM OF THE PROPOSED CONTRACT TO THE COMMISSION PRIOR
18 TO ITS USE. ANY CONTRACT WHICH HAS NOT BEEN APPROVED BY THE
19 COMMISSION IS VOID.
20 SECTION 9. CANCELLATION.
21 (A) CANCELLATION WITHIN 10 WORKING DAYS.--ANY BUYER MAY
22 CANCEL A PRENEED CONTRACT WITHIN 10 WORKING DAYS AFTER ALL
23 PARTIES HAVE SIGNED THE CONTRACT AND SHALL RECEIVE 100% OF ALL
24 PAYMENTS MADE UNDER THE CONTRACT. IN THE CASE OF A PRENEED
25 CONTRACT FUNDED BY A PRENEED INSURANCE POLICY, THE CANCELLATION
26 PERIOD UNDER THIS SUBSECTION WILL CONTINUE UNTIL THE LATEST OF
27 10 WORKING DAYS AFTER DELIVERY OF THE PRENEED INSURANCE POLICY
28 OR EXPIRATION OF THE PERIOD FOR FREE CANCELLATION OF THE POLICY
29 UNDER THE TERMS OF THE POLICY OR APPLICABLE LAW. NO FEE,
30 SURCHARGE, PENALTY OR LIQUIDATED DAMAGES MAY BE IMPOSED UPON THE
19930H2347B3946 - 50 -
1 RIGHT TO CANCEL UNDER THIS SUBSECTION.
2 (B) CANCELLATION AFTER 10 WORKING DAYS.--ANY BUYER MAY
3 CANCEL THE CONTRACT AT ANY TIME AFTER THE INITIAL 10-WORKING-DAY
4 PERIOD AND BEFORE PERFORMANCE BY THE PRENEED PROVIDER ON THE
5 CONTRACT SUBJECT TO THE FOLLOWING CONDITIONS:
6 (1) IN THE CASE OF A PRENEED CONTRACT FUNDED BY A
7 PRENEED TRUST:
8 (I) WHERE NO IRREVOCABLE ARRANGEMENT HAS BEEN MADE,
9 THE BUYER SHALL RECEIVE 100% OF ALL MONEYS PLACED IN
10 TRUST UNDER THE CONTRACT AND ALL ACCRUED INTEREST LESS
11 REASONABLE TRUSTEE FEES, ADMINISTRATIVE EXPENSES AND
12 TAXES; OR
13 (II) WHERE AN IRREVOCABLE ARRANGEMENT HAS BEEN MADE,
14 THE BUYER SHALL HAVE THE RIGHT TO CHANGE THE BENEFICIARY
15 OF THE PRENEED TRUST TO A SUBSTITUTE PRENEED PROVIDER.
16 (2) IN THE CASE OF A PRENEED CONTRACT FUNDED BY A
17 PRENEED INSURANCE POLICY:
18 (I) WHERE NO IRREVOCABLE ARRANGEMENT HAS BEEN MADE,
19 THE BUYER SHALL HAVE THE RIGHT TO CHANGE BENEFICIARIES OF
20 THE POLICY OR TO CANCEL THE POLICY AND OBTAIN THE CASH
21 SURRENDER VALUE; OR
22 (II) WHERE AN IRREVOCABLE ARRANGEMENT HAS BEEN MADE,
23 THE BUYER SHALL HAVE THE RIGHT TO CHANGE THE BENEFICIARY
24 OF THE POLICY TO A SUBSTITUTE PRENEED PROVIDER.
25 (C) RETURN OF AMOUNT OWED BUYER.--IF THE BUYER CANCELS A
26 PRENEED CONTRACT, THE PRENEED PROVIDER SHALL RETURN ANY AMOUNT
27 OWED TO THE BUYER WITHIN 30 DAYS OF RECEIVING NOTICE OF THE
28 CANCELLATION.
29 (D) NOTICE OF OPTION TO CHANGE BENEFICIARY OR ASSIGNEE OF
30 POLICY.--IF A BUYER OF A PRENEED CONTRACT FUNDED BY A PRENEED
19930H2347B3946 - 51 -
1 INSURANCE POLICY CANCELS THE CONTRACT AFTER THE 10-WORKING-DAY
2 CANCELLATION PERIOD, THE INSURANCE POLICY IS NOT THEREBY
3 CANCELED. THE BUYER SHALL BE NOTIFIED OF THE BUYER'S OPTION TO
4 CHANGE THE BENEFICIARY OR ASSIGNEE OF THE POLICY BY A NOTICE
5 SENT TO THE BUYER BY THE PRENEED PROVIDER WITHIN 30 DAYS OF
6 RECEIVING NOTICE OF THE CANCELLATION.
7 (E) SUBSTITUTION OF PRENEED PROVIDER.--IF THE CONTRACT
8 BENEFICIARY OF A PRENEED CONTRACT MOVES MORE THAN 50 MILES FROM
9 THE SERVICE AREA OF THE PRENEED PROVIDER OR DIES OUTSIDE OF THE
10 SERVICE AREA OF THE PRENEED PROVIDER, THE BUYER OR THE CONTRACT
11 BENEFICIARY'S ESTATE MAY CANCEL THE CONTRACT WITHIN 10 DAYS OR
12 SUBSTITUTE ANOTHER WHO AGREES TO PERFORM AT ANY TIME BEFORE
13 ORIGINAL PRENEED PROVIDER PERFORMANCE ON THE CONTRACT. IF THE
14 CONTRACT IS CANCELED AFTER THE 10-WORKING-DAY CANCELLATION
15 PERIOD FOR THIS REASON, IN ADDITION TO THE RIGHTS SET OUT IN
16 SUBSECTION (B), THE PRENEED PROVIDER SHALL RETURN TO THE
17 CANCELING PARTY ANY AMOUNTS, LESS INTEREST, RETAINED BY THE
18 PRENEED PROVIDER UNDER SECTION 12. IF ANOTHER PRENEED PROVIDER
19 AGREES TO PERFORM, THE ORIGINAL PRENEED PROVIDER SHALL TRANSFER
20 ANY AMOUNTS RETAINED UNDER SECTION 12 TO THE SUBSTITUTE PRENEED
21 PROVIDER. AFTER THE 10-DAY CANCELLATION PERIOD, THE SELLER SHALL
22 DEMONSTRATE THAT HE COULD FULFILL THE CONTRACT BY PROVIDING
23 SIMILAR OR COMPARABLE MERCHANDISE AND SERVICES ACCEPTABLE TO THE
24 NEW LOCATION OF THE PURCHASER. IF THE SELLER CANNOT FULFILL THE
25 CONTRACT IN THIS MANNER, THEN THE PURCHASER WOULD BE ENTITLED TO
26 A REFUND EQUAL TO THE ORIGINAL SALES PRICE OF THE CONTRACT, LESS
27 INTEREST ON THE ACCOUNT.
28 SECTION 10. FUNDING METHODS FOR PRENEED CONTRACTS.
29 (A) OPTION TO FUND.--THE BUYER MUST BE GIVEN THE OPTION OF
30 FUNDING THE PRENEED CONTRACT AND MAY CHOOSE NOT TO FUND THE
19930H2347B3946 - 52 -
1 PRENEED CONTRACT. THE PRENEED PROVIDER NEED NOT MAKE
2 ARRANGEMENTS TO OFFER A PRENEED INSURANCE POLICY AS A FUNDING
3 OPTION. A PERSON MAY NOT CHANGE THE METHOD OF FUNDING THE
4 PRENEED CONTRACT WITHOUT THE BUYER'S WRITTEN CONSENT.
5 (B) TRUST ACCOUNT.--WITHIN FIVE BUSINESS DAYS OF RECEIPT,
6 100% OF THE AMOUNT RECEIVED IN PAYMENT OF A PRENEED CONTRACT,
7 UNLESS ALREADY USED TO PURCHASE A PRENEED INSURANCE POLICY,
8 SHALL BE DEPOSITED INTO A PRENEED TRUST ACCOUNT IN A FEDERALLY
9 INSURED FINANCIAL INSTITUTION WITHIN THE COMMONWEALTH FOR A
10 PERIOD OF 30 DAYS. THE TRUST FUNDS MAY BE HELD IN A SEPARATE
11 ACCOUNT OR A COMMON PRENEED FUND. IF HELD IN A COMMON PRENEED
12 FUND, INDIVIDUAL RECORDS SHALL BE KEPT. FUNDS HELD IN A COMMON
13 PRENEED FUND SHALL BE SEPARATE FROM NON-PRENEED OR PERSONAL
14 FUNDS OF THE PRENEED PROVIDER. THE FUNDS MAY NOT BE USED FOR ANY
15 PURPOSE EXCEPT AS AUTHORIZED BY THIS ACT AND MAY NOT BE
16 DEPOSITED IN ANY ACCOUNT OTHER THAN THE TRUST ACCOUNT.
17 (C) PURCHASE OF A PRENEED INSURANCE POLICY.--A PRENEED
18 INSURANCE POLICY MAY BE PURCHASED USING THE AMOUNTS RECEIVED IN
19 PAYMENT OF THE PRENEED CONTRACT AT ANY TIME WITHIN THE 10-
20 WORKING-DAY CANCELLATION PERIOD. THE BUYER OF THE PRENEED
21 CONTRACT FUNDED BY A PRENEED INSURANCE POLICY PURCHASED BEFORE
22 EXPIRATION OF THE 10-WORKING-DAY CANCELLATION PERIOD SHALL HAVE
23 10 WORKING DAYS FROM THE TIME OF PAYMENT OF THE PREMIUM FOR THE
24 INSURANCE OR ANNUITY CONTRACT TO CANCEL IT WITHOUT ANY PENALTY
25 AND SHALL BE ENTITLED TO A FULL REFUND WITHIN FIVE BUSINESS
26 DAYS. THE PRENEED PROVIDER SHALL PROVIDE THE BUYER WITH WRITTEN
27 NOTICE OF THE EXTENSION OF TIME TO CANCEL CONTEMPORANEOUSLY WITH
28 DELIVERY OF THE POLICY. THE NOTICE SHALL BE ATTACHED TO THE
29 POLICY. THE FORM OF WRITTEN NOTICE SHALL BE SUBMITTED TO THE
30 INSURANCE DEPARTMENT FOR APPROVAL PRIOR TO USE BY THE INSURANCE
19930H2347B3946 - 53 -
1 COMPANY ISSUING THE POLICY. THE FILED FORM SHALL BE SUBJECT TO
2 THE PROVISIONS OF SECTION 354 OF THE ACT OF MAY 17, 1921
3 (P.L.682, NO.284), KNOWN AS THE INSURANCE COMPANY LAW OF 1921.
4 (D) APPLICABILITY.--THIS ACT SHALL NOT APPLY TO THE FUNDING
5 OF A PREARRANGED FUNERAL OR BURIAL BY THE ESTABLISHMENT OF A POD
6 ACCOUNT BY THE BUYER IN A FEDERALLY INSURED FINANCIAL
7 INSTITUTION WITHIN THE COMMONWEALTH.
8 SECTION 11. PRENEED TRUSTS.
9 (A) TRANSFER OF FUNDS FROM TRUST ACCOUNT.--FUNDS RECEIVED IN
10 PAYMENT OF A PRENEED CONTRACT WHERE THE BUYER HAS SELECTED A
11 TRUST AS SET FORTH IN SUBSECTION (B) AS THE MANNER OF FUNDING
12 THE PRENEED CONTRACT SHALL BE ACCOUNTED FOR AS FOLLOWS:
13 (1) A ONE-TIME FEE OF $5 PER PRENEED CONTRACT SHALL BE
14 PAID BY THE PRENEED PROVIDER TO THE PRENEED FUNERAL AND
15 BURIAL CONTRACT GUARANTEE FUND ESTABLISHED UNDER SECTION 18.
16 (2) 85% OF THE RETAIL SALES PRICE OF THE AMOUNT RECEIVED
17 IN PAYMENT OF A GUARANTEED PRICE PRENEED CONTRACT FOR ALL
18 MERCHANDISE AND SERVICE SHALL REMAIN IN THE TRUST FUND IN A
19 FEDERALLY INSURED FINANCIAL INSTITUTION WITHIN THIS
20 COMMONWEALTH. ALL INCOME EARNED IN THE TRUST SHALL REMAIN
21 WITH THE TRUST FUND. THE PRENEED PROVIDER MAY RECEIVE 15% OF
22 THE AMOUNT PAID ON THE PRENEED CONTRACT BUT MUST DISCLOSE TO
23 THE BUYER THE PERCENTAGE AND THE AMOUNT TO BE RECEIVED.
24 (3) SUBSECTION (A)(2) SHALL NOT APPLY IF A PRENEED
25 PROVIDER OBTAINS A SURETY BOND OR A LETTER OF CREDIT EQUAL TO
26 THE DIFFERENCE BETWEEN THE WHOLESALE COST AND THE RETAIL
27 PRICE ON ALL MERCHANDISE SOLD ON AN ACCUMULATIVE BASIS
28 ADJUSTED ANNUALLY. ONE HUNDRED TWENTY PER CENT OF THE
29 WHOLESALE PRICE OF THE AMOUNT RECEIVED IN PAYMENT OF A
30 GUARANTEED PRICE PRENEED CONTRACT FOR ALL MERCHANDISE SHALL
19930H2347B3946 - 54 -
1 REMAIN IN THE TRUST FUND IN A FEDERALLY INSURED FINANCIAL
2 INSTITUTION WITHIN THIS COMMONWEALTH. ALL INCOME EARNED IN
3 THE TRUST SHALL REMAIN WITH THE TRUST FUND. EIGHTY-FIVE PER
4 CENT OF THE RETAIL SALES PRICE OF THE AMOUNT RECEIVED IN
5 PAYMENT OF A GUARANTEED PRICE PRENEED CONTRACT FOR ALL
6 SERVICES SHALL REMAIN IN THE TRUST FUND IN A FEDERALLY
7 INSURED FINANCIAL INSTITUTION WITHIN THIS COMMONWEALTH. A
8 COPY OF THE BOND OR LETTER OF CREDIT SHALL BE INCLUDED WITH
9 THE PRENEED PROVIDER'S ANNUAL REGISTRATION FILING AND SHALL
10 BE AVAILABLE UPON REQUEST OF THE REGULATORY AND ENFORCEMENT
11 AGENCIES CREATED BY THIS ACT.
12 (4) 100% OF THE AMOUNT RECEIVED IN PAYMENT OF A
13 NONGUARANTEED PRICE PRENEED CONTRACT SHALL BE DEPOSITED INTO
14 A TRUST FUND IN A FEDERALLY INSURED FINANCIAL INSTITUTION
15 WITHIN THIS COMMONWEALTH.
16 (B) SEPARATE OR COMMON TRUST FUND.--THE TRUST FUNDS MAY BE
17 HELD IN A SEPARATE ACCOUNT OR IN A COMMON PRENEED TRUST FUND. IF
18 HELD IN A COMMON PRENEED FUND, INDIVIDUAL RECORDS SHALL BE KEPT
19 AND NON-PRENEED OR PERSONAL FUNDS OF THE PRENEED PROVIDER SHALL
20 NOT BE COMMINGLED.
21 (C) SELECTION OF TRUSTEE.--THE TRUSTEE OF THE FUND MAY BE
22 ANYONE AUTHORIZED UNDER LAW TO PERFORM THE FUNCTIONS OF A
23 TRUSTEE. UNDER NO CIRCUMSTANCES, HOWEVER, MAY THE PRENEED
24 PROVIDER OR ANY OF ITS EMPLOYEES, AGENTS OR AFFILIATES SERVE AS
25 THE TRUSTEE. THE CONTRACT BENEFICIARY SHALL BE THE BENEFICIARY
26 OF THE TRUST.
27 (D) FIDUCIARY DUTIES.--THE TRUSTEE IS SUBJECT TO THE
28 FIDUCIARY DUTIES IMPOSED BY LAW.
29 (1) THE TRUSTEE SHALL TAKE TITLE TO THE ASSETS CONVEYED
30 TO THE TRUST FOR THE PURPOSE OF INVESTING, PROTECTING AND
19930H2347B3946 - 55 -
1 CONSERVING IT FOR THE PROVIDER, COLLECTING INCOME AND
2 DISTRIBUTING THE PRINCIPAL AND INCOME AS PRESCRIBED IN THIS
3 ACT.
4 (2) THE PROVIDER IS PROHIBITED FROM SHARING IN THE
5 DISCHARGE OF THESE RESPONSIBILITIES, EXCEPT THAT THE PROVIDER
6 MAY REQUEST THE TRUSTEE TO INVEST IN TAX-FREE INVESTMENTS AND
7 MAY APPOINT AN ADVISER TO THE TRUSTEE.
8 (3) THE TRUST AGREEMENT SHALL BE SUBMITTED TO THE
9 COMMISSION FOR APPROVAL AND FILING. THE FUNDS SHALL BE HELD
10 IN TRUST, BOTH AS TO PRINCIPAL AND INCOME EARNED THEREON, AND
11 SHALL REMAIN INTACT, EXCEPT THAT THE COST OF THE OPERATION OF
12 THE TRUST OR TRUST ACCOUNT AUTHORIZED BY THIS SECTION MAY BE
13 DEDUCTED FROM THE INCOME EARNED THEREON. THE BUYER SHALL HAVE
14 NO INTEREST WHATSOEVER IN, OR POWER WHATSOEVER OVER, FUNDS
15 DEPOSITED IN TRUST PURSUANT TO THIS SECTION.
16 (4) IN NO EVENT MAY THE FUNDS BE LOANS TO A PROVIDER, AN
17 AFFILIATE OF A PROVIDER, OR ANY PERSON DIRECTLY OR INDIRECTLY
18 ENGAGED IN THE BURIAL, FUNERAL HOME OR CEMETERY BUSINESS.
19 FURTHERMORE, THE PROVIDER'S INTEREST IN THE TRUST SHALL NOT
20 BE PLEDGED AS COLLATERAL FOR ANY LOANS, DEBTS OR LIABILITIES
21 OF THE PROVIDER AND SHALL NOT BE TRANSFERRED TO ANY PERSON
22 WITHOUT THE PRIOR WRITTEN APPROVAL FROM THE COMMISSION AND
23 THE TRUSTEE WHICH SHALL NOT BE UNREASONABLY WITHHELD.
24 (5) EVEN THOUGH THE PROVIDER SHALL BE DEEMED AND TREATED
25 AS THE SETTLOR AND BENEFICIARY OF THE TRUST FOR ALL PURPOSES,
26 ALL OF THE TRUST FUNDS ARE EXEMPT FROM ALL CLAIMS OF
27 CREDITORS OF THE PROVIDER EXCEPT AS TO THE CLAIMS OF THE
28 BUYER, HIS REPRESENTATIVE OR THE COMMISSION.
29 (E) FORM OF TRUST ACCOUNT.--THE PRENEED TRUST ACCOUNT MAY
30 TAKE THE FORM OF:
19930H2347B3946 - 56 -
1 (1) A FEDERALLY INSURED BANK ACCOUNT WITHIN THIS
2 COMMONWEALTH; OR
3 (2) ANY OTHER FORM OF INVESTMENT WHICH MAY LAWFULLY BE
4 ESTABLISHED OR MAINTAINED BY THE TRUST DEPARTMENT OF THE
5 FEDERALLY INSURED FINANCIAL INSTITUTION WITHIN THIS
6 COMMONWEALTH IN WHICH THE PRENEED TRUST ACCOUNT IS
7 ESTABLISHED.
8 (F) CONFLICT OF INTEREST.--THE FEDERALLY INSURED FINANCIAL
9 INSTITUTION WITHIN THIS COMMONWEALTH IN WHICH TRUST FUNDS ARE
10 HELD SHALL NOT BE OWNED BY A PRENEED PROVIDER HAVING IN EXCESS
11 OF 10% OF THE OUTSTANDING STOCK OR UNDER THE CONTROL OF THE
12 PRENEED PROVIDER AND SHALL NOT USE ANY FUNDS REQUIRED TO BE HELD
13 IN TRUST TO PURCHASE AN INTEREST IN ANY CONTRACT OR AGREEMENT TO
14 WHICH THE PRENEED PROVIDER IS A PARTY, OR OTHERWISE TO INVEST,
15 DIRECTLY OR INDIRECTLY, IN THE PRENEED PROVIDER'S BUSINESS
16 OPERATION.
17 (G) RECORDS.--THE TRUSTEE SHALL MAINTAIN WITHIN THIS
18 COMMONWEALTH IN THE LOCATION SPECIFIED IN THE PRENEED PROVIDER'S
19 ANNUAL REPORT TO THE COMMISSION A SEPARATE, WRITTEN RECORD FOR
20 EACH PRENEED TRUST CONTAINING THE FOLLOWING INFORMATION:
21 (1) THE NAME, ADDRESS AND TELEPHONE NUMBER OF THE
22 PRENEED CONTRACT BUYER.
23 (2) THE NAME, ADDRESS, TELEPHONE NUMBER, DATE OF BIRTH
24 AND SOCIAL SECURITY NUMBER OF THE NAMED TRUST BENEFICIARY.
25 (3) THE DATE ON WHICH THE PRENEED TRUST WAS ORIGINALLY
26 ESTABLISHED AND THE AMOUNT OF MONEY ORIGINALLY DEPOSITED.
27 (4) THE BALANCE IN THE TRUST ACCOUNT, ON A MONTHLY
28 BASIS.
29 (5) A DESCRIPTION OF THE FORM AND MANNER IN WHICH THE
30 TRUST FUNDS ARE INVESTED.
19930H2347B3946 - 57 -
1 (6) A COPY OF THE INDIVIDUAL TRUST AGREEMENT OR, IN THE
2 CASE OF A COMMON OR COMMINGLED TRUST ACCOUNT, A COPY OF THE
3 MASTER TRUST AGREEMENT FOR THE COMMON ACCOUNT.
4 (7) WRITTEN DOCUMENTATION SUFFICIENT TO DEMONSTRATE
5 COMPLIANCE WITH THE REQUIREMENTS OF SECTIONS 10 AND 13 WITH
6 RESPECT TO ALL CHANGES IN THE TERMS OR PROVISIONS OF THE
7 TRUST.
8 (H) COMMON OR COMMINGLED TRUST ACCOUNT.--IN THE CASE OF ANY
9 COMMON OR COMMINGLED PRENEED TRUST ACCOUNT, A SEPARATE WRITTEN
10 RECORD WHICH COMPLIES WITH THE REQUIREMENTS OF SUBSECTION (G)
11 SHALL BE MAINTAINED FOR EACH SEPARATE TRUST BENEFICIARY.
12 (I) NOTICE OF CHANGE OF TRUSTEE.--THE TRUSTEE AND THE
13 PRENEED PROVIDER MUST NOTIFY THE BUYER, BENEFICIARY AND THE
14 COMMISSION IF THERE IS A CHANGE OF TRUSTEE.
15 (J) ANNUAL REPORT BY TRUSTEE.--THE TRUSTEE SHALL PROVIDE AT
16 THE REQUEST OF THE COMMISSION AN ANNUAL REPORT OF ALL FUNDS
17 DEPOSITED, INTEREST EARNED, FEES PAID, WITHDRAWALS MADE AND
18 DISBURSEMENTS AFTER PERFORMANCE OF CONTRACT OBLIGATIONS DURING
19 THE PREVIOUS YEAR. A COPY OF THE INTERNAL REVENUE SERVICE FORM
20 1099 SHALL BE FURNISHED TO THE PRENEED CONTRACT BUYERS ANNUALLY.
21 (K) TRUST INCOME.--THE INCOME FROM THE TRUST ON ALL PRENEED
22 CONTRACTS SHALL REMAIN WITH THE PRINCIPAL, BUT MAY BE USED TO
23 PAY TAXES, REASONABLE TRUSTEE FEES AND ADMINISTRATIVE EXPENSES
24 INCURRED IN THE ADMINISTRATION OF THE TRUST. THE COMMISSION
25 SHALL, BY RULE, ESTABLISH STANDARDS FOR THE AMOUNT OF FEES AND
26 EXPENSES WHICH MAY BE DEDUCTED FROM THE INCOME IN ACCORDANCE
27 WITH THE FUNDING REQUIREMENTS OF THIS ACT.
28 (L) DISBURSEMENT OF TRUST FUNDS.--NO DISBURSEMENT SHALL BE
29 MADE TO A PRENEED PROVIDER UNLESS THE PRENEED PROVIDER HAS FIRST
30 CERTIFIED TO THE TRUSTEE, ON A FORM TO BE PRESCRIBED BY THE
19930H2347B3946 - 58 -
1 COMMISSION, THAT ALL OBLIGATIONS HAVE BEEN PERFORMED AND ALL
2 GOODS AND SERVICES REQUIRED BY THE PRENEED CONTRACT HAVE BEEN
3 DELIVERED. THE CERTIFICATION SHALL CONTAIN AN ITEMIZATION OF THE
4 GOODS AND SERVICES THAT IT HAS PROVIDED. THE AMOUNT OF THE
5 DISBURSEMENT TO A PRENEED PROVIDER SHALL BE AS FOLLOWS:
6 (1) ON A GUARANTEED PRICE CONTRACT, THE ACTUAL PRICE OF
7 THE ITEMS IN THE PRENEED CONTRACT, AS REFLECTED ON THE
8 PRENEED PROVIDER'S CURRENT PRICE LIST.
9 (2) ON A NONGUARANTEED PRICE CONTRACT, THE ACTUAL PRICE
10 OF THE ITEMS IN THE PRENEED CONTRACT, AS REFLECTED ON THE
11 PRENEED PROVIDER'S CURRENT PRICE LIST.
12 (M) REMAINING AMOUNT.--ANY AMOUNT REMAINING FROM THE
13 PURCHASE OF A NONGUARANTEED PRICE CONTRACT AFTER DISBURSEMENT
14 AND THE PAYMENT OF TRUSTEE FEES, ADMINISTRATIVE EXPENSES AND
15 TAXES SHALL BE RETURNED TO THE ESTATE OR NEXT OF KIN OF THE
16 BUYER.
17 (N) PERIODIC EXAMINATIONS.--THE COMMISSION SHALL ORDER
18 PERIODIC EXAMINATIONS OF THE TRUST FUNDS WITH SUCH AUDITS
19 OCCURRING AT LEAST ONCE EVERY THREE YEARS.
20 SECTION 12. PRENEED INSURANCE POLICIES.
21 (A) TRANSFER OF FUNDS.--FUNDS RECEIVED IN PAYMENT OF A
22 PRENEED CONTRACT WHERE THE BUYER HAS SELECTED A PRENEED
23 INSURANCE POLICY AS THE MANNER OF FUNDING THE PRENEED CONTRACT
24 SHALL BE DISTRIBUTED AS FOLLOWS:
25 (1) FIVE DOLLARS PER CONTRACT SHALL BE PAID BY THE
26 PRENEED PROVIDER TO THE PRENEED FUNERAL AND BURIAL CONTRACT
27 GUARANTEE FUND ESTABLISHED UNDER SECTION 19.
28 (2) THE REMAINING AMOUNT SHALL BE USED TO PURCHASE THE
29 PRENEED INSURANCE POLICY.
30 (B) REQUIRING INSURANCE PROHIBITED.--A PRENEED PROVIDER
19930H2347B3946 - 59 -
1 SHALL NOT REQUIRE A BUYER TO PURCHASE ANY INSURANCE POLICY AS A
2 CONDITION OF ENTERING INTO ANY PRENEED FUNERAL CONTRACT.
3 (C) SALE OF INSURANCE.--A PERSON WHO SELLS OR OFFERS TO SELL
4 A PRENEED INSURANCE POLICY AS A MANNER TO FUND A PRENEED
5 CONTRACT MUST BE LICENSED BY THE INSURANCE DEPARTMENT TO SELL
6 INSURANCE IN THIS COMMONWEALTH.
7 (D) REQUIRED DISCLOSURES.--IF A PRENEED INSURANCE POLICY IS
8 USED TO FUND A PRENEED CONTRACT, BEFORE THE PRENEED OR AN
9 APPLICATION FOR INSURANCE POLICY CONTRACT IS SIGNED, THE
10 FOLLOWING MUST BE DISCLOSED:
11 (1) THE FACT THAT A PRENEED INSURANCE POLICY IS BEING
12 USED TO FUND PAYMENT OF THE TOTAL OR PARTIAL PURCHASE PRICE
13 OF THE PRENEED CONTRACT.
14 (2) THE NATURE OF THE RELATIONSHIP AMONG THE INDIVIDUALS
15 SELLING THE PRENEED CONTRACT, THE PRENEED PROVIDER, THE
16 INSURER AND ANY OTHER PERSON.
17 (3) THE RELATIONSHIP OF THE PRENEED INSURANCE POLICY TO
18 THE FUNDING OF THE PRENEED CONTRACT AND THE NATURE AND
19 EXISTENCE OF ANY GUARANTEES RELATING TO THE PRENEED CONTRACT.
20 (4) THE IMPACT ON THE PRENEED CONTRACT, INCLUDING ANY
21 PENALTIES, RESTRICTIONS, ENTITLEMENTS OR OBLIGATIONS,
22 RESULTING FROM:
23 (I) ANY CHANGES IN THE POLICY, INCLUDING, BUT NOT
24 LIMITED TO, CHANGES IN THE ASSIGNMENT, BENEFICIARY
25 DESIGNATION OR USE OF THE PROCEEDS;
26 (II) THE POLICYHOLDER'S FAILURE TO MAKE PREMIUM
27 PAYMENTS;
28 (III) CANCELLATION OR SURRENDER OF THE PRENEED
29 POLICY BY THE POLICYHOLDER;
30 (IV) ANY DIFFERENCE AT THE TIME OF DELIVERY BETWEEN
19930H2347B3946 - 60 -
1 THE PROCEEDS OF THE POLICY AND THE AMOUNT ACTUALLY NEEDED
2 TO FUND THE PRENEED CONTRACT;
3 (V) THE DEATH OF THE CONTRACT BENEFICIARY IN A
4 LOCATION NOT WITHIN THE PRENEED PROVIDER'S SERVICE AREA,
5 WHICH AREA SHALL BE DETERMINED BY THE BUYER; AND
6 (VI) THE INABILITY OF THE PRENEED PROVIDER TO
7 PERFORM ON THE PRENEED CONTRACT.
8 (5) THE IMPACT ON THE INSURANCE POLICY OF THE BUYER'S
9 CANCELLATION OF THE PRENEED CONTRACT, THE CASH SURRENDER
10 VALUE OF THE POLICY AT YEARLY INTERVALS AND THE OPTION OF THE
11 BUYER TO CHANGE THE BENEFICIARY OF THE POLICY IF THE PRENEED
12 CONTRACT IS CANCELED.
13 (E) FINANCIAL INFORMATION.--WITH A PRENEED INSURANCE POLICY
14 WHERE THE ACCUMULATED PREMIUMS EXCEED THE DEATH BENEFIT AT ANY
15 POINT DURING THE FIRST TEN YEARS, THEN A FORM ENTITLED
16 "FINANCIAL REVIEW OF THIS POLICY" OR A FORM CONTAINING
17 SUBSTANTIALLY SIMILAR INFORMATION AND APPROVED BY THE INSURANCE
18 COMMISSIONER SHALL BE COMPLETED BY THE INSURER AND DELIVERED
19 SIMULTANEOUSLY WITH THE POLICY. IN SUCH A CASE, THE CANCELLATION
20 PERIOD SHALL BE EXTENDED BY 10 WORKING DAYS.
21 (F) REQUIRED NOTICE.--PRIOR TO TAKING AN APPLICATION FOR A
22 POLICY WHICH IS SUBJECT TO THE DISCLOSURE REQUIREMENTS OF
23 SUBSECTION (E), THE INSURER MUST PROVIDE THE APPLICANT WITH A
24 CONSPICUOUS NOTICE IN THE FOLLOWING FORM OR IN A FORM CONTAINING
25 SUBSTANTIALLY SIMILAR INFORMATION APPROVED BY THE INSURANCE
26 COMMISSIONER.
27 NOTICE TO APPLICANTS
28 WITH YOUR POLICY, YOU WILL RECEIVE A FORM ENTITLED
29 "FINANCIAL REVIEW OF THIS POLICY," SHOWING PREMIUMS AND
30 BENEFITS FOR A TEN-YEAR PERIOD. YOU SHOULD REVIEW THE
19930H2347B3946 - 61 -
1 FORM ALONG WITH YOUR POLICY AND DECIDE WHETHER THE POLICY
2 IS SUITABLE FOR YOU. IF YOU ARE NOT ENTIRELY SATISFIED,
3 PLEASE REVIEW THE CANCELLATION PROVISION ON THE FORM FOR
4 DIRECTIONS ON OBTAINING A FULL REFUND OF ANY PREMIUMS
5 PAID.
6 (G) APPLICATION.--THE APPLICATION FOR ANY PRENEED LIFE
7 INSURANCE POLICY SHALL BE COMPLETED ACCORDING TO THE
8 REQUIREMENTS OF SECTION 412 OF THE ACT OF MAY 17, 1921 (P.L.682,
9 NO.284), KNOWN AS THE INSURANCE COMPANY LAW OF 1921.
10 (H) PAYMENT TO PRENEED PROVIDER.--PAYMENT OF THE PROCEEDS OF
11 A PRENEED INSURANCE POLICY SHALL NOT BE MADE TO A PRENEED
12 PROVIDER UNLESS THE PRENEED PROVIDER HAS FIRST CERTIFIED TO THE
13 INSURANCE COMPANY, ON A FORM TO BE PRESCRIBED BY THE COMMISSION,
14 THAT ALL OBLIGATIONS HAVE BEEN PERFORMED AND THAT ALL GOODS AND
15 SERVICES REQUIRED BY THE PRENEED CONTRACT HAVE BEEN DELIVERED.
16 THE CERTIFICATION SHALL CONTAIN AN ITEMIZATION OF THE GOODS AND
17 SERVICES THAT THE PRENEED PROVIDER HAS SUPPLIED.
18 (I) REMAINING PROCEEDS.--AT THE TIME OF PAYMENT OF THE
19 PROCEEDS OF THE POLICY, ANY PROCEEDS REMAINING AFTER PAYMENT TO
20 THE PRENEED PROVIDER FOR PERFORMANCE OF THE CONTRACT SHALL BE
21 RETURNED TO THE ESTATE OF THE BUYER OR NEXT OF KIN WITHIN 45
22 DAYS AFTER PAYMENT IS MADE TO THE PRENEED PROVIDER.
23 (J) APPLICATION OF ACT TO INSURANCE AND ANNUITIES.--THE
24 REQUIREMENTS OF THIS ACT RELATING TO PRENEED INSURANCE POLICIES
25 SHALL APPLY TO ANY AND ALL FORMS OF INSURANCE OR ANNUITIES WHICH
26 ARE SOLD OR UTILIZED FOR THE PURPOSE OF PROVIDING FUNDING FOR A
27 PRENEED BURIAL CONTRACT, REGARDLESS OF HOW NAMED.
28 (K) CONSTRUCTION OF ACT.--THIS ACT SHALL NOT BE CONSTRUED AS
29 REGULATING THE BUSINESS OF INSURANCE.
30 SECTION 13. PERFORMANCE AND SUBSTITUTION OF PRENEED PROVIDER.
19930H2347B3946 - 62 -
1 (A) FULL AND PARTIAL PERFORMANCE.--A PRENEED PROVIDER IS
2 ONLY ENTITLED TO PAYMENT OF FUNDS FROM THE PRENEED TRUST OR
3 PRENEED INSURANCE POLICY IF THE CONTRACT HAS BEEN FULLY
4 PERFORMED. IF THE PRENEED PROVIDER WHO IS A PARTY TO THE PRENEED
5 CONTRACT HAS DELIVERED OR PERFORMED ONLY A PORTION OF THE GOODS
6 AND SERVICES UNDER THE CONTRACT, THE FUNDS SHALL BE ALLOCATED AS
7 PROVIDED IN SUBSECTION (D).
8 (B) INABILITY TO FULLY PERFORM.--IF THE PRENEED PROVIDER IS
9 UNABLE TO FULLY PERFORM THE CONTRACT, THE BUYER MAY:
10 (1) CANCEL THE CONTRACT UNDER SECTION 9; OR
11 (2) EITHER THE PRENEED PROVIDER OR THE BUYER MAY
12 SUBSTITUTE A DIFFERENT PRENEED PROVIDER FOR ALL OR PART OF
13 THE CONTRACT, IF BOTH THE BUYER AND THE SUBSTITUTE PRENEED
14 PROVIDER AGREE.
15 (C) COMPLETE INABILITY TO PERFORM.--IF THE PRENEED PROVIDER
16 IS COMPLETELY UNABLE TO PERFORM THE CONTRACT, THE PRENEED
17 PROVIDER SHALL RETURN ANY AMOUNT THE PRENEED PROVIDER HAS KEPT
18 FROM THE AMOUNTS PAID UNDER THE CONTRACT TO:
19 (1) THE SUBSTITUTE PRENEED PROVIDER, IF ONE IS AGREED
20 UPON; OR
21 (2) THE BUYER, IF THE BUYER CHOOSES TO CANCEL THE
22 CONTRACT.
23 (D) ALLOCATION OF CONTRACT PRICE.--IF THE ORIGINAL PRENEED
24 PROVIDER IS ABLE TO PERFORM ONLY PART OF THE CONTRACT AND THE
25 BUYER AND A SUBSTITUTE PRENEED PROVIDER AGREE TO THE SUBSTITUTE
26 PRENEED PROVIDER'S PERFORMANCE OF THE REMAINDER OF THE CONTRACT,
27 THE PRENEED PROVIDER NAMED IN THE CONTRACT AND THE SUBSTITUTE
28 PRENEED PROVIDER SHALL EACH BE ENTITLED TO A TOTAL COMPENSATION
29 IN AN AMOUNT THAT IS PROPORTIONAL TO THE CONTRACT PRICE OF THE
30 GOODS AND SERVICES THAT WERE PROVIDED BY EACH. THE AMOUNT THAT
19930H2347B3946 - 63 -
1 THE ORIGINAL PRENEED PROVIDER SHALL RECEIVE FROM THE FUNDS OF
2 THE PRENEED TRUST OR THE PRENEED INSURANCE POLICY SHALL BE
3 REDUCED BY THE AMOUNT THAT IT RECEIVED FROM THE CONTRACT
4 PAYMENTS PRIOR TO THE PLACEMENT OF ANY SUMS IN TRUST OR PURCHASE
5 OF THE PRENEED INSURANCE POLICY.
6 SECTION 14. CHANGE IN PRENEED PROVIDER'S STATUS.
7 (A) NOTICE PRIOR TO CESSATION OF BUSINESS.--A PRENEED
8 PROVIDER MUST NOTIFY THE BUYER OF A PRENEED CONTRACT, THE
9 TRUSTEE OF A PRENEED TRUST AND THE COMMISSION OF A PROPOSED
10 CESSATION OF BUSINESS BY THE PRENEED PROVIDER AT LEAST 30 DAYS
11 PRIOR TO THE EFFECTIVE DATE OF CESSATION OF BUSINESS. NOTICE
12 MUST BE IN WRITING BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED.
13 (B) NOTICE OF TRANSFER OF OWNERSHIP.--A PRENEED PROVIDER
14 MUST NOTIFY THE BUYER OF A PRENEED CONTRACT, THE TRUSTEE OF A
15 PRENEED TRUST AND THE COMMISSION OF ANY TRANSFER OF OWNERSHIP OR
16 SALE OR ASSIGNMENT OF ANY ASSETS OR STOCK WITHIN TEN DAYS AFTER
17 THE TRANSFER, SALE OR ASSIGNMENT. NOTICE MUST BE IN WRITING BY
18 CERTIFIED MAIL, RETURN RECEIPT REQUESTED. SUCH NOTICE SHALL NOT
19 BE REQUIRED WHEN THE TRANSFER, SALE OR ASSIGNMENT IS MADE TO A
20 MEMBER OF THE IMMEDIATE FAMILY OR DOES NOT REPRESENT THE
21 TRANSFER OR SALE OF A MAJORITY INTEREST IN THE BUSINESS OF THE
22 PRENEED PROVIDER.
23 (C) CANCELLATION BY BUYER.--IF THE PRENEED PROVIDER CEASES
24 BUSINESS OR TRANSFERS A MAJORITY OWNERSHIP AND IF THE BUYER
25 CHOOSES TO CANCEL WITHIN 10 WORKING DAYS OF RECEIPT OF NOTICE OF
26 THE ACTION, THE BUYER SHALL BE ENTITLED TO A RETURN OF ANY
27 AMOUNTS RETAINED BY THE PRENEED PROVIDER FROM THE PAYMENTS ON
28 THE PRENEED CONTRACT, IN ADDITION TO THE AMOUNTS THE BUYER WOULD
29 BE ENTITLED TO UNDER SECTION 9.
30 (D) NOTICE OF BANKRUPTCY PROCEEDING.--IF THE PRENEED
19930H2347B3946 - 64 -
1 PROVIDER MAKES AN ASSIGNMENT FOR THE BENEFIT OF CREDITORS OR
2 ENTERS INTO ANY OTHER DEBT REORGANIZATION PLAN OR IS THE SUBJECT
3 OF ANY BANKRUPTCY OR RECEIVERSHIP PROCEEDING, THE PRENEED
4 PROVIDER SHALL NOTIFY THE BUYER, THE TRUSTEE OF A PRENEED TRUST
5 AND THE COMMISSION OF THE ACTION AND SHALL SEND THE BUYER AN
6 EXPLANATION OF HOW THE BUYER'S RIGHTS AND OBLIGATIONS UNDER THE
7 PRENEED CONTRACT WILL BE AFFECTED. NOTICE MUST BE IN WRITING BY
8 CERTIFIED MAIL, RETURN RECEIPT REQUESTED.
9 (E) ASSIGNMENT OF CONTRACT.--IF THE PRENEED PROVIDER IS FOR
10 ANY REASON UNABLE, UNWILLING OR IS RELIEVED OF ITS
11 RESPONSIBILITY TO PERFORM ON THE PRENEED CONTRACT, THE
12 COMMISSION, WITH THE BUYER'S PERMISSION, MAY ORDER THAT THE
13 CONTRACT BE ASSIGNED TO A SUBSTITUTE PRENEED PROVIDER.
14 (F) QUALIFICATIONS OF SUBSTITUTE PRENEED PROVIDER.--A
15 SUBSTITUTE PRENEED PROVIDER MUST BE LICENSED BY THE COMMONWEALTH
16 AND REGISTERED AS A PRENEED PROVIDER. A SUBSTITUTE PRENEED
17 PROVIDER MUST AGREE TO ACCEPT ASSIGNMENT OF THE PRENEED
18 CONTRACT.
19 SECTION 15. SUBSTITUTION OF TRUSTEE AND TRUSTS.
20 THE TRUSTEE OF ANY PRENEED TRUST MAY TRANSFER THE FUNDS HELD
21 IN TRUST TO ANOTHER TRUST OR A NEW TRUSTEE MAY BE SUBSTITUTED,
22 ONLY UPON WRITTEN NOTICE SENT CERTIFIED MAIL, RETURN RECEIPT
23 REQUESTED TO THE BUYER, THE COMMISSION AND THE PRENEED PROVIDER.
24 NOTICE SHALL BE SENT TEN DAYS PRIOR TO THE TRANSFER OR
25 SUBSTITUTION.
26 SECTION 16. SUBSTITUTION OF GOODS AND SERVICES.
27 (A) UNAVAILABILITY OF GOODS AND SERVICES SPECIFIED IN
28 CONTRACT.--IF THE PARTICULAR GOODS AND SERVICES SPECIFIED IN THE
29 CONTRACT ARE UNAVAILABLE AT THE TIME OF DELIVERY, THE PRENEED
30 PROVIDER SHALL FURNISH WITHOUT ADDITIONAL CHARGE GOODS AND
19930H2347B3946 - 65 -
1 SERVICES SIMILAR IN STYLE AND AT LEAST EQUAL IN QUALITY OF
2 MATERIAL AND WORKMANSHIP.
3 (B) EVALUATION OF SUBSTITUTE GOODS AND SERVICES.--THE
4 EVALUATION OF STYLE AND QUALITY SHALL BE BASED ON OBJECTIVE
5 CRITERIA SET FORTH IN THE CONTRACT, AS REQUIRED BY SECTION 8.
6 (C) SELECTION OF SUBSTITUTE GOODS AND SERVICES.--THE PERSON
7 OR PERSONS MAKING ARRANGEMENTS FOR THE FUNERAL OF THE DECEASED
8 CONTRACT BENEFICIARY SHALL CHOOSE THE GOODS AND SERVICES TO BE
9 SUBSTITUTED, AND THIS CHOICE MUST BE REASONABLY BASED ON THE
10 STANDARDS IN SUBSECTIONS (A) AND (B). IN SUCH CASE, THE PERSON
11 MAKING THE FUNERAL ARRANGEMENTS SHALL BE GIVEN ALL THE
12 DISCLOSURES REQUIRED BY SECTION 7(C).
13 SECTION 17. PRENEED FUNERAL AND BURIAL CONTRACT REGULATION
14 FUND.
15 (A) ESTABLISHMENT.--THERE SHALL BE ESTABLISHED WITHIN THE
16 STATE TREASURY A SEPARATE RESTRICTED ACCOUNT TO BE KNOWN AS THE
17 PRENEED FUNERAL AND BURIAL CONTRACT REGULATION FUND INTO WHICH
18 MONEYS COLLECTED UNDER SECTIONS 4(I) AND 21(A) SHALL BE
19 DEPOSITED FOR USE BY THE BUREAU OF CONSUMER PROTECTION OR THE
20 COMMISSION IN ADMINISTERING AND ENFORCING THIS ACT.
21 (B) ADMINISTRATION.--THE PRENEED FUNERAL AND BURIAL CONTRACT
22 REGULATION FUND SHALL BE UNDER THE CONTROL OF THE COMMISSION AND
23 THE INCOME ON THE ACCOUNT SHALL ACCRUE TO THE FUND. MONEYS IN
24 THE PRENEED FUNERAL AND BURIAL CONTRACT REGULATION FUND SHALL BE
25 EXPENDED TO THE BUREAU OF CONSUMER PROTECTION AT THE DISCRETION
26 OF THE COMMISSION. WHEN THE COMMISSION DETERMINES THAT THE FUND
27 CONTAINS SUFFICIENT MONEY TO BEGIN COMPLETE IMPLEMENTATION OF
28 THIS ACT, IT SHALL TRANSMIT NOTICE OF THAT FACT TO THE
29 LEGISLATIVE REFERENCE BUREAU FOR PUBLICATION IN THE PENNSYLVANIA
30 BULLETIN.
19930H2347B3946 - 66 -
1 (C) REPAYMENT OF INITIAL APPROPRIATION.--THE COMMISSION
2 SHALL REPAY FROM THE FEES, CHARGES AND INTEREST EARNINGS OF THE
3 FUND TO THE GENERAL FUND ANY MONEY APPROPRIATED FOR THE INITIAL
4 PLANNING, ORGANIZATION AND ADMINISTRATION OF THIS ACT. THE
5 REPAYMENT SHALL TAKE PLACE WITHIN A TEN-YEAR PERIOD, WHICH
6 PERIOD COMMENCES TWO YEARS AFTER PRENEED FUNERAL AND BURIAL
7 CONTRACT PROVIDER REGISTRATION REQUIREMENTS HAVE BEEN INITIATED.
8 SECTION 18. PRENEED FUNERAL AND BURIAL CONTRACT GUARANTEE FUND.
9 (A) ESTABLISHMENT.--THERE SHALL BE ESTABLISHED WITHIN THE
10 STATE TREASURY A SEPARATE INTEREST-BEARING, NONLAPSING,
11 RESTRICTED ACCOUNT KNOWN AS THE PRENEED FUNERAL AND BURIAL
12 CONTRACT GUARANTEE FUND INTO WHICH MONEYS COLLECTED UNDER
13 SUBSECTION (B) SHALL BE DEPOSITED.
14 (B) DEPOSIT OF FEES.--EACH PRENEED PROVIDER SHALL PAY A FEE
15 OF $5 OUT OF THE FUNDS RECEIVED FOR EACH PRENEED CONTRACT AND
16 SHALL FORWARD THE FEE AND A COPY OF THE PRENEED CONTRACT TO THE
17 COMMISSION NO LATER THAN THE LAST BUSINESS DAY OF EACH MONTH.
18 THE CONTRACT SHALL BE RECORDED BY THE COMMISSION. WITHIN TEN
19 DAYS AFTER RECEIVING THE FEE, THE COMMISSION SHALL NOTIFY THE
20 CONTRACT BUYER BY MAIL OF THE RECORDING. THE FEES SHALL BE
21 PLACED BY THE COMMISSION IN THE PRENEED FUNERAL AND BURIAL
22 CONTRACT GUARANTEE FUND, WHICH SHALL BE UNDER THE CONTROL OF THE
23 COMMISSION, AND THE INCOME ON THE FEES SHALL ACCRUE TO THE FUND.
24 MONEYS IN THE PRENEED FUNERAL AND BURIAL CONTRACT GUARANTEE FUND
25 MAY BE EXPENDED TO PURCHASE INSURANCE TO COVER LOSSES GUARANTEED
26 BY THE PRENEED FUNERAL AND BURIAL CONTRACT GUARANTEE FUND.
27 (C) CAP ON FUND ACCUMULATION.--WHEN THE PRENEED FUNERAL AND
28 BURIAL CONTRACT GUARANTEE FUND REACHES A TOTAL OF $5,000,000,
29 THEREAFTER, ALL INTEREST DERIVED FROM THE FUND AND CONTRACT AND
30 REGISTRATION FEES SHALL CONTINUE TO ACCUMULATE BEYOND THE
19930H2347B3946 - 67 -
1 $5,000,000 CAP, BUT SUCH FUNDS SHALL BE APPLIED TO THE
2 ADMINISTRATION AND ENFORCEMENT OF THIS ACT.
3 (D) SUBMISSION OF CLAIM.--IN THE EVENT THE BUYER OF ANY
4 PRENEED FUNERAL CONTRACT IS UNABLE TO RECEIVE THE BENEFITS OF
5 THE BUYER'S CONTRACT OR TO RECEIVE THE FUNDS DUE BY REASON OF
6 CANCELLATION OF THE CONTRACT, THE BUYER MAY SUBMIT A CLAIM TO
7 THE COMMISSION ON A FORM SUPPLIED BY THE COMMISSION. UPON A
8 FINDING BY THE COMMISSION THAT THE BENEFITS OR RETURN OF MONEY
9 PAID TO THE PRENEED PROVIDER IS NOT AVAILABLE TO THE BUYER, THE
10 COMMISSION WILL CAUSE PAYMENT TO BE MADE TO THE BUYER FROM THE
11 PRENEED FUNERAL AND BURIAL CONTRACT GUARANTEE FUND. IN ALL SUCH
12 CASES THE COMMISSION SHALL BE SUBROGATED TO THE BUYER'S CLAIMS
13 AGAINST THE PRENEED PROVIDER FOR ANY AMOUNTS PAID FROM THE
14 PRENEED FUNERAL AND BURIAL CONTRACT GUARANTEE FUND.
15 (E) PAYMENT OF AWARD BY COURT.--IF THE PRENEED PROVIDER'S
16 LIABILITY FOR DEFAULT IS SUBSEQUENTLY PROVEN, ANY FUNDS
17 RECOVERED BY THE PRENEED PROVIDER UP TO THE AMOUNT PAID TO THE
18 BUYER SHALL BE MADE PAYABLE TO THE PRENEED FUNERAL AND BURIAL
19 CONTRACT GUARANTEE FUND.
20 SECTION 19. REGULATIONS.
21 THE BUREAU OF CONSUMER PROTECTION MAY ADOPT SUCH RULES AND
22 REGULATIONS AS MAY BE NECESSARY FOR THE ENFORCEMENT AND
23 ADMINISTRATION OF THE APPLICABLE PORTIONS OF THIS ACT.
24 SECTION 20. PRENEED FUNERAL AND BURIAL CONTRACT COMMISSION.
25 (A) ESTABLISHMENT.--THERE IS HEREBY ESTABLISHED THE PRENEED
26 FUNERAL AND BURIAL CONTRACT COMMISSION AS AN INDEPENDENT
27 COMMISSION TO ENFORCE AND ADMINISTER THE APPLICABLE PROVISIONS
28 OF THIS ACT. THE COMMISSION SHALL BE CREATED THROUGH FUNDING IN
29 ACCORDANCE WITH SECTION 17.
30 (B) COMPOSITION AND APPOINTMENT.--THE COMMISSION SHALL
19930H2347B3946 - 68 -
1 CONSIST OF NINE MEMBERS. THE GOVERNOR SHALL APPOINT THREE EX-
2 OFFICIO MEMBERS, ONE OF WHOM SHALL BE THE SECRETARY OF AGING,
3 ONE OF WHOM SHALL BE THE SECRETARY OF BANKING AND ONE OF WHOM
4 SHALL BE THE INSURANCE COMMISSIONER. THE GOVERNOR SHALL ALSO
5 APPOINT TWO PROFESSIONAL MEMBERS, ONE OF WHOM SHALL BE A FUNERAL
6 DIRECTOR AND ONE OF WHOM SHALL BE A CEMETERY OWNER. THE GOVERNOR
7 SHALL ALSO APPOINT ONE AT-LARGE PUBLIC MEMBER. THE PRESIDENT PRO
8 TEMPORE OF THE SENATE AND THE SPEAKER OF THE HOUSE OF
9 REPRESENTATIVES SHALL EACH APPOINT A MEMBER WHO IS AN ELDERLY
10 CITIZEN OF THIS COMMONWEALTH. THE FINAL APPOINTEE SHALL BE THE
11 EXECUTIVE DIRECTOR OF THE COMMISSION.
12 (C) TERM OF MEMBERS.--THE PROFESSIONAL, AT-LARGE PUBLIC AND
13 ELDERLY MEMBERS SHALL SERVE FOUR-YEAR TERMS EXCEPT AS PROVIDED
14 IN SUBSECTION (D).
15 (D) INITIAL APPOINTMENT.--WITHIN 90 DAYS OF THE EFFECTIVE
16 DATE OF THIS ACT, THE GOVERNOR SHALL NOMINATE ONE PROFESSIONAL
17 MEMBER WHO IS A FUNERAL DIRECTOR TO SERVE AN INITIAL THREE-YEAR
18 TERM, ONE MEMBER WHO IS A CEMETERY OWNER TO SERVE AN INITIAL
19 TWO-YEAR TERM AND AN AT-LARGE PUBLIC MEMBER TO SERVE AN INITIAL
20 FOUR-YEAR TERM. WITHIN 90 DAYS OF THE EFFECTIVE DATE OF THIS
21 ACT, THE PRESIDENT PRO TEMPORE OF THE SENATE SHALL APPOINT ONE
22 MEMBER WHO IS AN ELDERLY PENNSYLVANIAN TO SERVE AN INITIAL FOUR-
23 YEAR TERM. WITHIN 90 DAYS OF THE EFFECTIVE DATE OF THIS ACT, THE
24 SPEAKER OF THE HOUSE OF REPRESENTATIVES SHALL NOMINATE ONE
25 MEMBER WHO IS AN ELDERLY PENNSYLVANIAN TO SERVE AN INITIAL TWO-
26 YEAR TERM.
27 (E) CONTINUATION IN OFFICE.--EACH PROFESSIONAL AND PUBLIC
28 MEMBER SHALL CONTINUE IN OFFICE UNTIL A SUCCESSOR IS APPOINTED
29 AND QUALIFIED BUT NOT LONGER THAN SIX MONTHS AFTER THE
30 EXPIRATION OF THE TERM. IF A MEMBER DIES, RESIGNS OR BECOMES
19930H2347B3946 - 69 -
1 DISQUALIFIED DURING THE TERM OF OFFICE, A SUCCESSOR SHALL BE
2 APPOINTED IN THE SAME WAY AND WITH THE SAME QUALIFICATIONS AS
3 SET FORTH IN THIS SECTION AND SHALL HOLD OFFICE FOR THE
4 UNEXPIRED PORTION OF THE TERM.
5 (F) LIMIT ON TERMS.--NO PROFESSIONAL, AT-LARGE PUBLIC MEMBER
6 OR ELDERLY MEMBER SHALL BE ELIGIBLE FOR APPOINTMENT TO SERVE
7 MORE THAN TWO CONSECUTIVE FOUR-YEAR TERMS.
8 (G) FORFEITURE OF MEMBERSHIP.--A PROFESSIONAL, AT-LARGE
9 PUBLIC OR ELDERLY MEMBER WHO FAILS TO ATTEND THREE CONSECUTIVE
10 MEETINGS SHALL FORFEIT MEMBERSHIP UNLESS THE CHAIRMAN, UPON
11 WRITTEN REQUEST FROM THE MEMBER, FINDS THAT THE MEMBER SHOULD BE
12 EXCUSED FROM A MEETING BECAUSE OF ILLNESS OR THE DEATH OF A
13 FAMILY MEMBER.
14 (H) MEETINGS.--THE COMMISSION SHALL MEET AT LEAST EVERY 60
15 DAYS AT LOCATIONS WHICH PROVIDE ACCESSIBILITY FOR CERTIFICATION
16 REVIEW.
17 (I) ANNUAL REPORT.--THE COMMISSION SHALL PREPARE AN ANNUAL
18 REPORT OF ITS ACTIVITIES AND SHALL SUBMIT THE REPORT TO THE
19 CONSUMER PROTECTION AND PROFESSIONAL LICENSURE COMMITTEE OF THE
20 SENATE AND THE CONSUMER AFFAIRS COMMITTEE OF THE HOUSE OF
21 REPRESENTATIVES.
22 (J) COMPENSATION.--EACH PROFESSIONAL, AT-LARGE PUBLIC AND
23 ELDERLY MEMBER SHALL RECEIVE PER DIEM COMPENSATION AT THE RATE
24 OF $60 WHEN ACTUALLY ATTENDING TO THE WORK OF THE COMMISSION.
25 MEMBERS SHALL ALSO RECEIVE REASONABLE TRAVEL, HOTEL AND OTHER
26 NECESSARY EXPENSES INCURRED IN THE PERFORMANCE OF THEIR DUTIES
27 IN ACCORDANCE WITH MANAGEMENT DIRECTIVES ON TRAVEL AND
28 SUBSISTENCE.
29 (K) QUORUM.--A MAJORITY OF THE MEMBERS OF THE COMMISSION
30 CONSTITUTES A QUORUM. A MEMBER MAY NOT BE COUNTED AS PART OF A
19930H2347B3946 - 70 -
1 QUORUM OR VOTE ON ANY ISSUE UNLESS THE MEMBER IS PHYSICALLY IN
2 ATTENDANCE AT THE MEETING.
3 (L) OPERATING PROCEDURES.--THE COMMISSION SHALL MEET WITHIN
4 30 DAYS AFTER THE APPOINTMENT OF ITS MEMBERS AND SET UP
5 OPERATING PROCEDURES AND FORMS FOR CARRYING OUT THE APPLICABLE
6 PROVISIONS OF THIS ACT. IT SHALL BE THE RESPONSIBILITY OF THE
7 COMMISSION TO CIRCULATE THESE FORMS AND EDUCATE THE PUBLIC ON
8 THE REQUIREMENTS OF THIS ACT.
9 (M) ELECTION OF OFFICERS.--THE COMMISSION SHALL ELECT
10 ANNUALLY FROM ITS MEMBERSHIP A CHAIRMAN, A VICE CHAIRMAN AND A
11 SECRETARY.
12 (N) POWERS AND DUTIES.--THE COMMISSION SHALL HAVE THE
13 FOLLOWING POWER AND DUTIES:
14 (1) TO REVIEW APPLICATIONS FOR REGISTRATION BY PRENEED
15 PROVIDERS.
16 (2) TO APPROVE OR DENY APPLICATIONS FOR REGISTRATION
17 BASED ON THE CRITERIA IN SECTION 4(J).
18 (3) TO SUSPEND OR REVOKE THE REGISTRATION OF A PROVIDER
19 BASED ON THE CRITERIA IN SECTION 4(J).
20 (4) TO PROMULGATE REGULATIONS TO IMPLEMENT THIS ACT.
21 (5) TO ADOPT FORMS.
22 (6) TO ESTABLISH REPORTING REQUIREMENTS FOR MONITORING
23 AND EXAMINING THE RECORDS OF PROVIDERS.
24 (7) TO APPOINT AN EXECUTIVE DIRECTOR.
25 SECTION 21. EXECUTIVE DIRECTOR.
26 (A) APPOINTMENT.--THE COMMISSION SHALL APPOINT AN EXECUTIVE
27 DIRECTOR, WHO SHALL NOT ENGAGE IN ANY BUSINESS, VOCATION OR
28 OTHER EMPLOYMENT INVOLVING THE FUNERAL OR CEMETERY INDUSTRY OR
29 HAVE ANY OTHER INTEREST INCONSISTENT WITH OFFICIAL
30 RESPONSIBILITIES. THE POSITION OF EXECUTIVE DIRECTOR SHALL BE A
19930H2347B3946 - 71 -
1 FULL-TIME POSITION.
2 (B) COMPENSATION.--THE COMPENSATION OF THE EXECUTIVE
3 DIRECTOR SHALL BE FIXED BY THE COMMISSION AND PAID FOR OUT OF
4 THE PRENEED FUNERAL AND BURIAL CONTRACT REGULATION FUND
5 ESTABLISHED UNDER SECTION 18. COMPENSATION SET UNDER THIS
6 SECTION MAY NOT EXCEED THE HIGHEST SALARY PAID TO A CABINET
7 OFFICER.
8 (C) POWERS AND DUTIES.--THE EXECUTIVE DIRECTOR SHALL HAVE
9 THE POWER AND DUTY TO PERFORM THE ADMINISTRATIVE WORK OF THE
10 COMMISSION, INCLUDING, BUT NOT LIMITED TO:
11 (1) MAINTAINING RECORDS OF COMMISSION MEETINGS AND
12 ACTIONS.
13 (2) MAINTAINING RECORDS OF ALL APPLICATIONS FOR
14 REGISTRATION.
15 (3) MAINTAINING FILES ON EACH PROVIDER LICENSED UNDER
16 THIS ACT AND ANY DISCIPLINARY ACTION TAKEN AGAINST A LICENSED
17 PROVIDER.
18 (4) OTHER DUTIES AS DETERMINED BY THE COMMISSION.
19 SECTION 22. JUDICIAL REVIEW.
20 THE ACTIONS OF THE COMMISSION UNDER THIS ACT ARE SUBJECT TO 2
21 PA.C.S. CH. 5 SUBCH. A (RELATING TO PRACTICE AND PROCEDURE OF
22 COMMONWEALTH AGENCIES) AND CH. 7 SUBCH. A (RELATING TO JUDICIAL
23 REVIEW OF COMMONWEALTH AGENCY ACTION).
24 SECTION 23. VIOLATIONS AND ENFORCEMENT.
25 (A) PENALTY.--IT IS A VIOLATION OF THIS ACT FOR A PERSON TO
26 OFFER, SELL, ADVERTISE OR PROMOTE PRENEED CONTRACTS WITHOUT
27 COMPLYING WITH THE REQUIREMENTS OF THIS ACT. VIOLATION OF THIS
28 ACT BY A PRENEED PROVIDER IS GROUNDS FOR DISCIPLINARY ACTION BY
29 ITS LICENSING AUTHORITY. ANY PERSON OR ANY PRENEED PROVIDER WHO
30 VIOLATES THIS ACT SHALL PAY A CIVIL PENALTY OF NOT LESS THAN
19930H2347B3946 - 72 -
1 $1,000 NOR MORE THAN $5,000 FOR EACH VIOLATION. THE COMMISSION
2 SHALL DEPOSIT ALL PENALTY MONEYS COLLECTED INTO THE PRENEED
3 FUNERAL AND BURIAL CONTRACT REGULATION FUND ESTABLISHED UNDER
4 SECTION 17.
5 (B) UNFAIR TRADE PRACTICE.--A VIOLATION OF THIS ACT
6 CONSTITUTES A VIOLATION OF THE ACT OF DECEMBER 17, 1968
7 (P.L.1224, NO.387), KNOWN AS THE UNFAIR TRADE PRACTICES AND
8 CONSUMER PROTECTION LAW.
9 (C) PRIVATE RIGHT OF ACTION.--A BUYER SHALL HAVE A PRIVATE
10 RIGHT OF ACTION AGAINST ANY PERSON WHO VIOLATES THIS ACT. IN
11 ADDITION TO AN ACTION FOR VIOLATION OF THIS ACT, IF ANY PRENEED
12 PROVIDER FAILS TO PERFORM ON A PRENEED CONTRACT, THE BUYER SHALL
13 ALSO HAVE A CAUSE OF ACTION FOR BREACH OF CONTRACT AND DAMAGES
14 UNDER 13 PA.C.S. DIV. 2 (RELATING TO SALES), INCLUDING
15 INCIDENTAL AND CONSEQUENTIAL DAMAGES. ANY BUYER WHO PREVAILS IN
16 AN ACTION BROUGHT FOR A VIOLATION OF THIS ACT SHALL BE AWARDED
17 REASONABLE ATTORNEY FEES AND COSTS OF THE ACTION.
18 (D) INVESTIGATION AND ENFORCEMENT.--THE BUREAU OF CONSUMER
19 PROTECTION HAS THE PRIMARY RESPONSIBILITY AND POWER TO
20 INVESTIGATE AND ENFORCE THE PROVISIONS OF THIS ACT. IN SO DOING,
21 THE BUREAU OF CONSUMER PROTECTION SHALL COORDINATE AND COOPERATE
22 WITH ANY OTHER AGENCY, INCLUDING THE PRENEED FUNERAL AND BURIAL
23 CONTRACT COMMISSION, THAT HAS JURISDICTION OVER ANY MATTER
24 RELATING TO THIS ACT.
25 (E) EMPLOYMENT OF COUNSEL AND STAFF.--THE BUREAU OF CONSUMER
26 PROTECTION SHALL, USING THE FEES COLLECTED UNDER SECTION 4(I)
27 AND THE PENALTIES COLLECTED UNDER SUBSECTION (A), EMPLOY
28 QUALIFIED LEGAL COUNSEL AND OTHER STAFF TO MONITOR, INVESTIGATE,
29 AUDIT AND OTHERWISE BE RESPONSIBLE FOR THE ENFORCEMENT OF THIS
30 ACT.
19930H2347B3946 - 73 -
1 (F) RECORDS AND AUDIT.--EVERY PRENEED PROVIDER SHALL KEEP
2 ITS ACCOUNTS AND RECORDS ACCORDING TO GENERALLY RECOGNIZED
3 ACCOUNTING METHODS.
4 (G) ANNUAL REPORT.--EVERY PRENEED PROVIDER SHALL FILE WITH
5 THE BUREAU OF CONSUMER PROTECTION AN ANNUAL REPORT ON A FORM
6 PRESCRIBED BY THE BUREAU OF CONSUMER PROTECTION, CONTAINING THE
7 FOLLOWING INFORMATION:
8 (1) ALL INFORMATION REQUIRED IN THE APPLICATION FOR
9 REGISTRATION TO SELL PRENEED CONTRACTS.
10 (2) THE TOTAL AMOUNT OF ALL FUNDS DEPOSITED IN PRENEED
11 TRUSTS OR USED TO PAY FOR PRENEED INSURANCE POLICIES FOR THAT
12 YEAR, ON AN ANNUAL BASIS.
13 (3) THE TOTAL AMOUNT OF ALL FUNDS OUTSTANDING IN PRENEED
14 TRUSTS OR IN PRENEED INSURANCE CONTRACTS, ON AN ANNUAL BASIS.
15 (4) THE TOTAL NUMBER AND AMOUNT OF PRENEED CONTRACTS
16 SOLD, ON AN ANNUAL BASIS.
17 (5) THE TOTAL NUMBER AND AMOUNT OF PRENEED CONTRACTS
18 OUTSTANDING, ON AN ANNUAL BASIS.
19 (6) THE TOTAL AMOUNT OF MONEY RECEIVED THAT YEAR, ON AN
20 ANNUAL BASIS, FROM THE SALE OF PRENEED CONTRACTS SOLD IN THE
21 PAST YEAR AND SOLD IN PREVIOUS YEARS.
22 (7) THE TOTAL AMOUNT OF MONEY RECEIVED THAT YEAR, ON AN
23 ANNUAL AND QUARTERLY BASIS, FROM THE INTEREST OR OTHER
24 EARNINGS, COMMISSIONS OR OTHER FEES FROM PRENEED CONTRACTS
25 SOLD IN THE PAST YEAR AND SOLD IN PREVIOUS YEARS.
26 (8) THE NAMES AND ADDRESSES OF THE BUYER AND CONTRACT
27 BENEFICIARY, IF DIFFERENT FROM THE BUYER, OF EACH CONTRACT
28 SOLD WITHIN THE LAST YEAR AND THE AMOUNT OF EACH.
29 (9) THE FUNDING METHODS USED FOR THE PRENEED CONTRACTS
30 SOLD IN THE LAST YEAR BY THE PRENEED PROVIDER AND THE
19930H2347B3946 - 74 -
1 PERCENTAGE OF CONTRACTS, BY BOTH AMOUNT AND NUMBER, FUNDED BY
2 EACH METHOD.
3 (10) THE NUMBER AND AMOUNT OF ANY WITHDRAWALS FROM, OR
4 ANY CHANGES OF STATUS OF, ANY PRENEED TRUST ACCOUNT INCLUDING
5 INDIVIDUAL ACCOUNT NAMES AND THE NAMES OF THE DECEASED
6 CLAIMANTS.
7 (11) THE NAMES AND ADDRESSES OF EACH FEDERALLY INSURED
8 FINANCIAL INSTITUTION, INVESTMENT COMPANY, INSURANCE COMPANY
9 OR OTHER PARTY INVOLVED IN THE FUNDING OF PRENEED CONTRACTS
10 BY THE PRENEED PROVIDER.
11 (12) THE LOCATION OF THE PRENEED PROVIDER'S
12 ESTABLISHMENT AND ANY TRUSTEE'S ACCOUNTS AND OTHER RECORDS.
13 (H) INDIVIDUAL RECORDS.--EVERY PRENEED PROVIDER SHALL KEEP
14 INDIVIDUAL RECORDS FOR EACH PRENEED CONTRACT SOLD. THESE RECORDS
15 SHALL CONTAIN THE FOLLOWING INFORMATION:
16 (1) THE NAME AND ADDRESS OF EACH BUYER.
17 (2) THE NAME, ADDRESS, TELEPHONE NUMBER AND SOCIAL
18 SECURITY NUMBER OF EACH CONTRACT BENEFICIARY.
19 (3) THE DATE AND TOTAL AMOUNT OF EACH CONTRACT.
20 (4) IF THE CONTRACT IS FUNDED BY A PRENEED TRUST:
21 (I) THE DATE THE TRUST WAS ORIGINALLY ESTABLISHED;
22 (II) THE AMOUNT ORIGINALLY DEPOSITED;
23 (III) THE BALANCE IN THE TRUST ACCOUNT, ON A MONTHLY
24 BASIS;
25 (IV) A DESCRIPTION OF THE FORM AND MANNER IN WHICH
26 THE FUNDS ARE INVESTED;
27 (V) A COPY OF THE TRUST AGREEMENT OR MASTER TRUST
28 AGREEMENT IF ACCOUNTS ARE COMMINGLED; AND
29 (VI) THE NAME AND ADDRESS OF THE TRUSTEE AND THE
30 FEDERALLY INSURED FINANCIAL INSTITUTION WITHIN THIS
19930H2347B3946 - 75 -
1 COMMONWEALTH ESTABLISHING THE TRUST.
2 (5) IF THE CONTRACT IS FUNDED BY A PRENEED INSURANCE
3 POLICY:
4 (I) THE DATE THE POLICY WAS PURCHASED;
5 (II) THE AMOUNT PAID FOR THE POLICY; AND
6 (III) THE NAME AND ADDRESS OF THE INSURANCE COMPANY.
7 (6) WRITTEN DOCUMENTATION TO DEMONSTRATE COMPLIANCE WITH
8 THE REQUIREMENTS FOR ANY CHANGES IN THE TERMS OR PROVISIONS
9 OF ANY TRUST OR IN THE METHOD OF FUNDING THE CONTRACT.
10 (I) LOCATION OF RECORDS.--ALL RECORDS KEPT BY A PRENEED
11 PROVIDER, TRUSTEE OR INSURANCE COMPANY RELATING TO ANY PRENEED
12 CONTRACT SHALL BE KEPT AND SHALL BE PROVIDED TO THE BUREAU OF
13 CONSUMER PROTECTION OR THE COMMISSION UPON REQUEST.
14 SECTION 24. REPEALS.
15 (A) ABSOLUTE.--THE FOLLOWING ACTS AND PARTS OF ACTS ARE
16 REPEALED:
17 SECTION 13(C) OF THE ACT OF JANUARY 14, 1952 (1951 P.L.1898,
18 NO.522), KNOWN AS THE FUNERAL DIRECTOR LAW.
19 ACT OF AUGUST 14, 1963 (P.L.1059, NO.459), ENTITLED "AN ACT
20 PROHIBITING FUTURE NEED SALES OF CEMETERY MERCHANDISE AND
21 SERVICES, FUNERAL MERCHANDISE AND SERVICES, EXCEPT UNDER CERTAIN
22 CONDITIONS; REQUIRING THE ESTABLISHMENT OF AND DEPOSIT INTO A
23 MERCHANDISE TRUST FUND OF CERTAIN AMOUNT OF THE PROCEEDS OF ANY
24 SUCH SALE; PROVIDING FOR THE ADMINISTRATION OF SUCH TRUST FUNDS
25 AND THE PAYMENT OF MONEY THEREFROM; CONFERRING POWERS AND
26 IMPOSING DUTIES ON ORPHANS' COURTS, AND PRESCRIBING PENALTIES."
27 (B) GENERAL.--ALL OTHER ACTS AND PARTS OF ACTS ARE REPEALED
28 INSOFAR AS THEY ARE INCONSISTENT WITH THIS ACT.
29 SECTION 25. EFFECTIVE DATE.
30 THIS ACT SHALL TAKE EFFECT AS FOLLOWS:
19930H2347B3946 - 76 -
1 (1) SECTIONS 17, 19 AND 20 SHALL TAKE EFFECT UPON
2 PUBLICATION OF THE NOTICE UNDER SECTION 17(B).
3 (2) THE REMAINDER OF THIS ACT SHALL TAKE EFFECT IN 6
4 MONTHS.
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