House File 442 - Introduced
HOUSE FILE
BY PETTENGILL
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to requirements for trust fund deposits of
2 prepayments for cemetery and funeral merchandise, and funeral
3 services.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
5 TLSB 1156HH 82
6 av/je/5
PAG LIN
1 1 Section 1. Section 523A.201, subsections 2 and 3, Code
1 2 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 ninety=five percent of all
1 8 payments made under the purchase agreement shall be placed and
1 9 remain in trust until the person for whose benefit the funds
1 10 were paid 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 ninety=five percent of each
1 15 payment in the trust fund until the full amount required to be
1 16 placed in trust has been deposited. If the purchase agreement
1 17 is financed with or sold to a financial institution, the
1 18 purchase agreement shall be considered paid in full and the
1 19 trust requirements shall be satisfied within fifteen days
1 20 after the close of the month in which the seller receives
1 21 funds from the financial institution.
1 22 Sec. 2. Section 523A.405, subsection 8, Code 2007, is
1 23 amended to read as follows:
1 24 8. The amount of the surety bond shall equal eighty
1 25 ninety=five percent of the payments received pursuant to
1 26 purchase agreements, or the applicable portion thereof, for
1 27 cemetery merchandise, funeral merchandise, funeral services,
1 28 or a combination thereof and the amount needed to adjust the
1 29 amount of the surety bond for inflation as set by the
1 30 commissioner based on the consumer price index. The seller
1 31 shall review the amount of the surety bond no less than
1 32 annually and shall increase the bond as necessary to reflect
1 33 additional payments. The amount needed to adjust for
1 34 inflation shall be added annually to the surety bond during
1 35 the first quarter of the establishment's fiscal year.
2 1 Sec. 3. Section 523A.811, subsection 1, paragraph c, Code
2 2 2007, is amended to read as follows:
2 3 c. The amount of funds currently held in trust for
2 4 cemetery merchandise, funeral merchandise, and funeral
2 5 services is less than eighty ninety=five percent of all
2 6 payments made under the purchase agreements referred to in
2 7 section 523A.201.
2 8 EXPLANATION
2 9 This bill relates to the requirements for trust fund
2 10 deposits of prepayments for cemetery and funeral merchandise,
2 11 and funeral services.
2 12 Code section 523A.201 is amended to require that a minimum
2 13 of 95 percent of such payments made under a purchase agreement
2 14 must be placed in trust until the person for whose benefit the
2 15 funds were paid dies, and that 95 percent of each installment
2 16 payment made under such a purchase agreement must be placed in
2 17 trust until the full amount required to be placed in trust has
2 18 been deposited. Currently, only 80 percent of such payments
2 19 must be placed in trust.
2 20 Code section 523A.811 is amended to require the insurance
2 21 commissioner to notify the attorney general of the need for
2 22 establishment of a receivership if a seller of cemetery and
2 23 funeral merchandise, and funeral services, has placed in trust
2 24 less than 95 percent of the payments referred to in Code
2 25 section 523A.201.
2 26 LSB 1156HH 82
2 27 av:nh/je/5