Text: S05708 Text: S05710 Text: S05700 - S05799 Text: S Index Bills and Amendments: General Index Bill History: General Index
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PAG LIN
1 1 Amend Senate File 2466 as follows:
1 2 #1. Page 1, by inserting before line 1 the
1 3 following:
1 4 "Section 1. Section 523A.1, Code Supplement 1995,
1 5 is amended to read as follows:
1 6 523A.1 TRUST FUND ESTABLISHED – INSURANCE.
1 7 1. a. Whenever an agreement is made by any
1 8 person, firm, or corporation to furnish, upon the
1 9 future death of a person named or implied in the
1 10 agreement, funeral services or funeral merchandise, a
1 11 minimum of eighty percent of all payments made under
1 12 the agreement shall be and remain trust funds until
1 13 occurrence of the death of the person for whose
1 14 benefit the funds were paid, unless the funds are
1 15 sooner released to the person making the payment by
1 16 mutual consent of the parties. Payments otherwise
1 17 subject to this section are not exempt merely because
1 18 they are held in certificates of deposit. The
1 19 commissioner may adopt rules to prohibit the
1 20 commingling of trust funds with other funds of the
1 21 seller.
1 22 b. Interest or income earned on amounts deposited
1 23 in trust under this section shall remain in trust
1 24 under the same terms and conditions as the payments
1 25 made under the agreement, except that the seller may
1 26 withdraw so much of the interest or income as
1 27 represents the difference between the amount needed to
1 28 adjust the trust funds for inflation as set by the
1 29 commissioner based on the consumer price index and the
1 30 interest or income earned during the preceding year
1 31 not to exceed fifty percent of the total interest or
1 32 income, on a calendar year basis. The early
1 33 withdrawal of interest or income pursuant to this
1 34 provision does not affect the purchaser's right to the
1 35 full refund or credit of such interest or income in
1 36 the event the payments and interest in trust are
1 37 released to the purchaser or in the event of a
1 38 nonguaranteed price agreement, respectively. This
1 39 provision does not affect the purchaser's right to a
1 40 total refund of principal and interest or income in
1 41 the event of nonperformance.
1 42 c. If an agreement pursuant to this section is to
1 43 be paid in installment payments, the seller shall
1 44 deposit eighty percent of each payment in trust until
1 45 the full amount to be trusted has been deposited. If
1 46 the agreement is financed with or sold to a financial
1 47 institution, then the agreement shall be considered
1 48 paid in full and the deposit requirements of this
1 49 section shall be satisfied within fifteen days after
1 50 the close of the month of receipt of the funds from
2 1 the financial institution.
2 2 d. This section does not apply to payments for
2 3 merchandise delivered to the purchaser. Except for
2 4 caskets and other types of inner burial containers or
2 5 concrete burial vaults sold after July 1, 1995,
2 6 delivery includes storage in a warehouse under the
2 7 control of the seller or any other warehouse or
2 8 storage facility approved by the commissioner when a
2 9 receipt of ownership in the name of the purchaser is
2 10 delivered to the purchaser, the merchandise is insured
2 11 against loss, the merchandise is protected against
2 12 damage, title has been transferred to the purchaser,
2 13 the merchandise is appropriately identified and
2 14 described in a manner that it can be distinguished
2 15 from other similar items of merchandise, the method of
2 16 storage allows for visual audits of the merchandise,
2 17 and the annual reporting requirements of section
2 18 523A.2, subsection 1, are satisfied.
2 19 2. An agreement may be funded by insurance
2 20 proceeds derived from a policy issued by an insurance
2 21 company authorized to conduct business in this state.
2 22 Such funding may be in lieu of a trust fund if the
2 23 payments are made directly to the insurance company by
2 24 the purchaser of the agreement.
2 25 3. Except for payments received by the seller for
2 26 merchandise delivered to the purchaser pursuant to
2 27 subsection 1, paragraph "d", and for sellers who have
2 28 filed a surety bond in lieu of the trust fund
2 29 requirements, a seller that does not have insurance
2 30 coverage protecting against the loss of amounts
2 31 received from consumers that are not placed in trust
2 32 pursuant to this section shall not do any of the
2 33 following:
2 34 a. Commingle trust funds with any other funds of
2 35 the seller.
2 36 b. Accept cash payments.
2 37 c. Accept payments by check or in any other
2 38 manner, unless such payments are made payable directly
2 39 to an escrow or trust account maintained at a
2 40 financial institution.
2 41 Sec. . Section 523A.2, subsection 1, paragraph
2 42 c, Code Supplement 1995, is amended by adding the
2 43 following new subparagraph:
2 44 NEW SUBPARAGRAPH. (2A) An audited financial
2 45 statement for the seller's most recent completed
2 46 fiscal year prepared by an independent accountant or
2 47 auditor in accordance with generally accepted
2 48 accounting principles. The financial statement shall
2 49 include a copy of the seller's balance sheet as of a
2 50 date within one hundred twenty days of the date of the
3 1 filing, a profit and loss statement, and a statement
3 2 of change in financial position for the most recent
3 3 fiscal year of the seller."
3 4 #2. Page 4, by inserting after line 23 the
3 5 following:
3 6 "Sec. . Section 523E.1, Code Supplement 1995,
3 7 is amended by adding the following new subsection:
3 8 NEW SUBSECTION. 7. Except for payments received
3 9 by the seller for merchandise delivered to the
3 10 purchaser pursuant to subsection 6, and for sellers
3 11 who have filed a surety bond in lieu of the trust fund
3 12 requirements, a seller that does not have insurance
3 13 coverage protecting against the loss of amounts
3 14 received from consumers that are not placed in trust
3 15 pursuant to this section shall not do any of the
3 16 following:
3 17 a. Commingle trust funds with any other funds of
3 18 the seller.
3 19 b. Accept cash payments.
3 20 c. Accept payments by check or in any other
3 21 manner, unless such payments are made payable directly
3 22 to an escrow or trust account maintained at a
3 23 financial institution.
3 24 Sec. . Section 523E.2, subsection 1, paragraph
3 25 c, Code Supplement 1995, is amended by adding the
3 26 following new subparagraph:
3 27 NEW SUBPARAGRAPH. (2A) An audited financial
3 28 statement for the seller's most recent completed
3 29 fiscal year prepared by an independent accountant or
3 30 auditor in accordance with generally accepted
3 31 accounting principles. The financial statement shall
3 32 include a copy of the seller's balance sheet as of a
3 33 date within one hundred twenty days of the date of the
3 34 filing, a profit and loss statement, and a statement
3 35 of change in financial position for the most recent
3 36 fiscal year of the seller."
3 37 #3. By renumbering as necessary.
3 38
3 39
3 40
3 41 MIKE CONNOLLY
3 42 SF 2466.701 76
3 43 mj/sc
Text: S05708 Text: S05710 Text: S05700 - S05799 Text: S Index Bills and Amendments: General Index Bill History: General Index
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