1. Every agreement for cemetery merchandise under this chapter shall be written in clear, understandable language and shall be printed or typed in easy-to-read type, size, and style, and shall:
a. Identify the seller, the salesperson's permit and establishment name and permit number, the expiration date of the salesperson's permit, the purchaser, and the person for whom the cemetery merchandise is purchased if other than the purchaser.
b. Specify the cemetery merchandise to be provided, and the cost of each merchandise item.
c. State clearly the conditions on which substitution will be allowed.
d. Set forth the total purchase price and the terms under which it is to be paid.
e. State clearly whether the agreement is a guaranteed price contract or a nonguaranteed price contract. Each nonguaranteed price contract shall contain in twelve point bold type, an explanation of the consequences in substantially the following language: Q $KIP$ 1
THE PRICES OF MERCHANDISE AND SERVICES UNDER THIS CONTRACT ARE SUBJECT TO CHANGE IN THE FUTURE. ANY FUNDS PAID UNDER THIS CONTRACT ARE ONLY A DEPOSIT TO BE APPLIED, TOGETHER WITH ACCRUED INCOME, TOWARD THE FINAL COSTS OF THE MERCHANDISE OR SERVICES CONTRACTED FOR. ADDITIONAL CHARGES MAY BE REQUIRED. Q $KIP$ 1
f. State clearly whether the agreement is a revocable or irrevocable contract, and who has the authority to revoke the contract.
g. State the amount or percentage of money to be placed in trust.
h. Explain the disposition of the income generated from investments, include a statement of fees, expenses, and taxes which may be deducted, and include a statement of the buyer's responsibility for income taxes owed on the income, if applicable.
i. Specify the purchaser's right to cancel and damages for cancellation, if any.
j. Include an explanation of regulatory oversight by the insurance division in twelve point bold type, in substantially the following language: Q $KIP$ 1
THIS CONTRACT MUST BE REPORTED TO THE IOWA INSURANCE DIVISION BY THE FIRST DAY OF MARCH OF THE FOLLOWING YEAR. YOU MAY CALL THE INSURANCE DIVISION AT (INSERT TELEPHONE NUMBER) TO CONFIRM THAT YOUR CONTRACT HAS BEEN REPORTED. WRITTEN INQUIRIES OR COMPLAINTS SHOULD BE MAILED TO THE FOLLOWING ADDRESS: IOWA SECURITIES BUREAU (INSERT ADDRESS). Q $KIP$ 1
k. State that if, after all payments are made in accordance with the conditions and terms of the agreement for cemetery merchandise, any funds remain in the nonguaranteed irrevocable burial trust fund, the seller shall disburse the remaining funds to a personal representative of the deceased as defined in section 633.3, or to the deceased's surviving next of kin, or to the director of human services, in accordance with section 523A.3.
2. The commissioner may adopt rules establishing disclosure and format requirements to promote consumers' understanding of the cemetery merchandise purchased and the available funding mechanisms under an agreement for cemetery merchandise under this chapter.
3. Every agreement shall be signed by the purchaser and the seller.
4. The seller shall disclose at the time an application is made by an individual and prior to accepting the applicant's initial premium or deposit for a preneed funeral contract or prearrangement subject to section 523E.1 which is funded by a life insurance policy, the following information:
a. That a life insurance policy is involved or being used to fund an agreement.
b. The nature of the relationship among the soliciting agent or agents, the provider of the funeral or cemetery merchandise or services, the administrator, and any other person.
c. The relationship of the life insurance policy to the funding of the prearrangement and the nature and existence of any guarantees relating to the prearrangement.
d. The impact on the prearrangement of the following:
(1) Changes in the life insurance policy including, but not limited to, changes in the assignment, beneficiary designation, or use of proceeds.
(2) Any penalties to be incurred by the policyholder as a result of the failure to make premium payments.
(3) Penalties to be incurred or cash to be received as a result of the cancellation or surrender of the life insurance policy.
e. A list of merchandise and services which are applied or contracted for in the prearrangement and all relevant information concerning the price of the merchandise and services, including an indication that the purchase price is either guaranteed at the time of purchase or to be determined at the time of need.
f. All relevant information concerning what occurs and whether any entitlements or obligations arise if there is a difference between the proceeds of the life insurance policy and the amount actually needed to fund the agreement.
g. Any penalties or restrictions, including but not limited to, geographic restrictions or the inability of the provider to perform, on the delivery of merchandise, services, or the prearrangement guarantee.
h. That a sales commission or other form of compensation is being paid and, if so, the identity of the individuals or entities to whom it is paid.
90 Acts, ch 1213, §18; 95 Acts, ch 68, §5; 95 Acts, ch 149, §16--;18; 96 Acts, ch 1093, § 3
Iowa General Assembly
Search: Iowa Code 1997
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Last update: Mon Jan 27 16:05:08 CST 1997
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