1. Whenever an agreement is made by any person, firm, or corporation to furnish, upon the future death of a person named or implied in the agreement, funeral services or funeral merchandise, a minimum of eighty percent of all payments made under the agreement shall be and remain trust funds until occurrence of the death of the person for whose benefit the funds were paid, unless the funds are sooner released to the person making the payment by mutual consent of the parties. Payments otherwise subject to this section are not exempt merely because they are held in certificates of deposit. The commissioner may adopt rules to prohibit the commingling of trust funds with other funds of the seller.
Interest or income earned on amounts deposited in trust under this section shall remain in trust under the same terms and conditions as the payments made under the agreement, except that the seller may withdraw so much of the interest or income as represents the difference between the amount needed to adjust the trust funds for inflation as set by the commissioner based on the consumer price index and the interest or income earned during the preceding year not to exceed fifty percent of the total interest or income, on a calendar year basis. The early withdrawal of interest or income pursuant to this provision does not affect the purchaser's right to the full refund or credit of such interest or income in the event the payments and interest in trust are released to the purchaser or in the event of a nonguaranteed price agreement, respectively. This provision does not affect the purchaser's right to a total refund of principal and interest or income in the event of nonperformance.
If an agreement pursuant to this section is to be paid in installment payments, the seller shall deposit eighty percent of each payment in trust until the full amount to be trusted has been deposited. If the agreement is financed with or sold to a financial institution, then the agreement shall be considered paid in full and the deposit requirements of this section shall be satisfied within fifteen days after the close of the month of receipt of the funds from the financial institution.
This section does not apply to payments for merchandise delivered to the purchaser. Delivery includes storage in a warehouse or storage facility approved by the commissioner. Concrete burial vaults and caskets sold after July 1, 1995, shall not be delivered in lieu of trusting. The commissioner may prohibit delivery in lieu of trusting with regard to additional types of inner burial containers and merchandise or establish standards for the approval of storage facilities, pursuant to rules adopted for that purpose.
2. An agreement may be funded by insurance proceeds derived from a policy issued by an insurance company authorized to conduct business in this state. Such funding may be in lieu of a trust fund if the payments are made directly to the insurance company by the purchaser of the agreement.
[C54, 58, 62, 66, 71, 73, 75, 77, 79, 81, § 523A.1]
87 Acts, ch 30, §3; 90 Acts, ch 1213, § 1; 95 Acts, ch 149, § 1, 2; 98 Acts, ch 1189, §7
Referred to in § 523A.2, 523A.7, 523A.8, 523A.9, 523A.10, 523A.12, 523A.15, 523A.19, 523A.22, 523E.12
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