House Journal: Page 1344: Monday, April 23, 2001
25 and 523A.202.
26 6. Upon receiving a notice of cancellation, unless
27 the seller has complied with the requirements of this
28 section, the attorney general shall seek an injunction
29 to prohibit the seller from making further purchase
30 agreements subject to this chapter. The attorney
31 general shall commence an action to attach and levy
32 execution upon property of the seller when the seller
33 fails to perform a purchase agreement subject to this
34 chapter, to the extent necessary to secure compliance
35 with this chapter. The county attorney may bring
36 criminal charges under subchapter 7.
37 7. The surety under this section shall not be
38 owned, under the control of, or affiliated with the
39 seller.
40 8. The amount of the surety bond shall equal
41 eighty percent of the payments received pursuant to
42 purchase agreements, or the applicable portion
43 thereof, for cemetery merchandise, funeral
44 merchandise, funeral services, or a combination
45 thereof and the amount needed to adjust the amount of
46 the surety bond for inflation as set by the
47 commissioner based on the consumer price index. The
48 seller shall review the amount of the surety bond no
49 less than annually and shall increase the bond as
50 necessary to reflect additional payments. The amount
Page 24
1 needed to adjust for inflation shall be added annually
2 to the surety bond during the first quarter of the
3 establishment's fiscal year.
4 9. With the consent of the purchaser, an existing
5 prepaid purchase agreement with trust-funded benefits
6 may be converted to a prepaid purchase agreement
7 funded by a surety bond provided the establishment and
8 the surety bond comply with the following provisions:
9 a. The amount of the trust funds transferred to
10 the surety company must be at least equal to the full
11 sum required to be deposited as trust principal under
12 the trust-funded prepaid purchase agreement plus all
13 net earnings accumulated with respect thereto, as of
14 the transfer date. Commissions, allowances, surrender
15 charges or other forms of compensation or expense
16 loads, premium expense, administrative charges or
17 expenses, or fees shall not be deducted from the trust
18 funds transferred pursuant to the conversion.
19 b. The face amount of the surety bond issued on an
20 individual must be no less than the amount of
21 principal and interest transferred for that individual
22 to the surety company, and any supplemental surety
23 bond issued to cover the unfunded portion of the
© 2001 Cornell College and
League of Women Voters of Iowa
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