House Journal: Page 1339: Monday, April 23, 2001
30 b. The annuity shall provide that any assignment
31 of benefits is contingent upon the establishment's
32 delivery of cemetery merchandise, funeral merchandise,
33 and funeral services pursuant to a purchase agreement.
34 c. The annuity shall have an increasing death
35 benefit or similar feature that provides some means
36 for increasing the funding as the cost of cemetery
37 merchandise, funeral merchandise, and funeral services
38 increases.
39 6. With the written consent of the purchaser, an
40 existing prepaid purchase agreement with trust-funded
41 benefits may be converted to a prepaid purchase
42 agreement with annuity-funded benefits provided the
43 establishment and the annuity benefits comply with the
44 following provisions:
45 a. The transfer of the trust funds to the
46 insurance company must be at least equal to the full
47 sum required to be deposited as trust principal under
48 the trust-funded prepaid purchase agreement plus all
49 net earnings accumulated with respect thereto, as of
50 the transfer date. Commissions, allowances, surrender
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1 charges or other forms of compensation or expense
2 loads, premium expense, administrative charges or
3 expenses, or fees shall not be deducted from the trust
4 funds transferred pursuant to the conversion.
5 b. The face amount of any annuity issued on an
6 individual must be no less than the amount of
7 principal and interest transferred for that individual
8 to the insurance company, and any supplemental annuity
9 issued to cover the unfunded portion of the purchase
10 agreement must have a face amount that is at least as
11 great as the unfunded principal balance. The face
12 amount of the annuity purchased shall not, under any
13 circumstances, be less than the total of all payments
14 made by the purchaser pursuant to the agreement plus
15 all net earnings accumulated with respect thereto, as
16 of the transfer date.
17 c. The annuity shall not allow for contesting
18 coverage, limit death benefits in the case of suicide,
19 refer to physical examination, or otherwise operate as
20 an exclusion, limitation, or condition other than
21 requiring submission of proof of death or surrender of
22 the annuity at the time the prepaid purchase agreement
23 is funded, matures, or is canceled, as the case may
24 be.
25 d. The establishment shall maintain a copy of any
26 prepaid trust-funded purchase agreement that was
27 converted to a prepaid annuity-funded purchase
28 agreement and retain the payment history records for
© 2001 Cornell College and
League of Women Voters of Iowa
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