Text: S05748 Text: S05750 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. a. A seller shall not do any of the following:
2 26 (1) Commingle trust funds with any other funds of
2 27 the seller.
2 28 (2) Accept cash payments.
2 29 (3) Accept payments by check or in any other
2 30 manner, unless such payments are made payable directly
2 31 to an escrow or trust account maintained at a
2 32 financial institution.
2 33 b. Paragraph "a" does not apply to any of the
2 34 following:
2 35 (1) Payments received by a seller for merchandise
2 36 delivered to the purchaser pursuant to subsection 1,
2 37 paragraph "d".
2 38 (2) A seller who has filed a surety bond in lieu
2 39 of the trust fund requirements.
2 40 (3) A seller who has insurance coverage protecting
2 41 against the loss of amounts received from consumers
2 42 that are not placed in trust pursuant to this section.
2 43 Sec. 2. Section 523A.2, subsection 1, paragraph c,
2 44 Code Supplement 1995, is amended by adding the
2 45 following new subparagraph:
2 46 NEW SUBPARAGRAPH. (2A) A financial statement for
2 47 the seller's most recent completed fiscal year
2 48 prepared by an independent accountant or auditor in
2 49 accordance with generally accepted accounting
2 50 principles. The financial statement shall include a
3 1 copy of the seller's balance sheet as of a date within
3 2 one hundred twenty days of the date of the filing, a
3 3 profit and loss statement, and a statement of change
3 4 in financial position for the most recent fiscal year
3 5 of the seller. The statement of change in financial
3 6 position shall include a statement of changes in
3 7 assets and liabilities related to the sale of
3 8 prearranged funeral agreements audited by the
3 9 independent accountant or auditor."
3 10 #2. Page 4, by inserting after line 23 the
3 11 following:
3 12 "Sec. 3. Section 523E.1, Code Supplement 1995, is
3 13 amended by adding the following new subsection:
3 14 NEW SUBSECTION. 7. a. A seller shall not do any
3 15 of the following:
3 16 (1) Commingle trust funds with any other funds of
3 17 the seller.
3 18 (2) Accept cash payments.
3 19 (3) Accept payments by check or in any other
3 20 manner, unless such payments are made payable directly
3 21 to an escrow or trust account maintained at a
3 22 financial institution.
3 23 b. Paragraph "a" does not apply to any of the
3 24 following:
3 25 (1) Payments received by a seller for merchandise
3 26 delivered to the purchaser pursuant to subsection 6.
3 27 (2) A seller who has filed a surety bond in lieu
3 28 of the trust fund requirements.
3 29 (3) A seller who has insurance coverage protecting
3 30 against the loss of amounts received from consumers
3 31 that are not placed in trust pursuant to this section.
3 32 Sec. 4. Section 523E.2, subsection 1, paragraph c,
3 33 Code Supplement 1995, is amended by adding the
3 34 following new subparagraph:
3 35 NEW SUBPARAGRAPH. (2A) A financial statement for
3 36 the seller's most recent completed fiscal year
3 37 prepared by an independent accountant or auditor in
3 38 accordance with generally accepted accounting
3 39 principles. The financial statement shall include a
3 40 copy of the seller's balance sheet as of a date within
3 41 one hundred twenty days of the date of the filing, a
3 42 profit and loss statement, and a statement of change
3 43 in financial position for the most recent fiscal year
3 44 of the seller. The statement of change in financial
3 45 position shall include a statement of changes in
3 46 assets and liabilities related to the sale of
3 47 prearranged funeral agreements audited by the
3 48 independent accountant or auditor."
3 49 #3. By renumbering as necessary.
3 50
4 1
4 2
4 3 MIKE CONNOLLY
4 4 SF 2466.501 76
4 5 mj/jw
Text: S05748 Text: S05750 Text: S05700 - S05799 Text: S Index Bills and Amendments: General Index Bill History: General Index
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