House File 2064 - Introduced
HOUSE FILE
BY PETTENGILL
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act requiring all payments for prepaid cemetery and funeral
2 merchandise, and funeral services to be placed in trust or
3 secured by a surety bond.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
5 TLSB 5753YH 82
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PAG LIN
1 1 Section 1. Section 523A.201, subsections 2 and 3, Code
1 2 Supplement 2007, are amended to read as follows:
1 3 2. If a seller agrees to furnish cemetery merchandise,
1 4 funeral merchandise, funeral services, or a combination
1 5 thereof and performance or delivery may be more than one
1 6 hundred twenty days following the initial payment on the
1 7 account, a minimum of eighty percent of all payments made
1 8 under the purchase agreement shall be placed and remain in
1 9 trust until the person for whose benefit the funds were paid
1 10 dies.
1 11 3. If a purchase agreement for cemetery merchandise,
1 12 funeral merchandise, funeral services, or a combination
1 13 thereof provides that payments are to be made in installments,
1 14 the seller shall deposit eighty percent of each payment all
1 15 payments made under the purchase agreement in the trust fund
1 16 until the full amount required to be placed in trust has been
1 17 deposited. If the purchase agreement is financed with or sold
1 18 to a financial institution, the purchase agreement shall be
1 19 considered paid in full and the trust requirements shall be
1 20 satisfied within fifteen days after the seller receives funds
1 21 from the financial institution.
1 22 Sec. 2. Section 523A.201, subsection 5, Code Supplement
1 23 2007, is stricken.
1 24 Sec. 3. Section 523A.405, subsection 8, Code Supplement
1 25 2007, is amended to read as follows:
1 26 8. The amount of the surety bond shall equal eighty
1 27 percent the amount of the payments received pursuant to
1 28 purchase agreements, or the applicable portion thereof, for
1 29 cemetery merchandise, funeral merchandise, funeral services,
1 30 or a combination thereof and the amount needed to adjust the
1 31 amount of the surety bond for inflation as set by the
1 32 commissioner based on the consumer price index. The seller
1 33 shall review the amount of the surety bond no less than
1 34 annually and shall increase the bond as necessary to reflect
1 35 additional payments. The amount needed to adjust for
2 1 inflation shall be added annually to the surety bond during
2 2 the first quarter of the establishment's fiscal year.
2 3 Sec. 4. Section 523A.601, subsection 6, paragraph a, Code
2 4 Supplement 2007, is amended to read as follows:
2 5 a. A purchase agreement that is funded by a trust shall
2 6 include a conspicuous statement in language substantially
2 7 similar to the following language:
2 8 "For your prearranged funeral agreement, we will deposit
2 9 not less than eighty percent all of your payments in trust at
2 10 (name of financial institution), (street address), (city),
2 11 (state) (zip code) within fifteen days following receipt of
2 12 the funds. For your protection, you have the right to contact
2 13 the financial institution directly to confirm that the deposit
2 14 of these funds occurred as required by law. If you are unable
2 15 to confirm the deposit of these funds in trust, you may
2 16 contact the Iowa insurance division for assistance by calling
2 17 the insurance division at (telephone number) or by mail at
2 18 (street address), (city), Iowa (zip code)."
2 19 Sec. 5. Section 523A.811, subsection 1, paragraph c, Code
2 20 Supplement 2007, is amended to read as follows:
2 21 c. The amount of funds currently held in trust for
2 22 cemetery merchandise, funeral merchandise, and funeral
2 23 services is less than eighty percent the total amount of all
2 24 payments made under the purchase agreements referred to in
2 25 section 523A.201.
2 26 EXPLANATION
2 27 This bill requires that all payments made pursuant to a
2 28 purchase agreement for cemetery merchandise, funeral
2 29 merchandise, funeral services, or a combination thereof, where
2 30 performance or delivery under the agreement may be more than
2 31 120 days following initial payment on the account, must be
2 32 placed in trust or secured by a surety bond in that amount.
2 33 Currently, only 80 percent of the amount of such payments is
2 34 required to be placed in trust or secured by a surety bond.
2 35 LSB 5753YH 82
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