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