The Florida Senate

¹497.407  Certificate of authority; annual statement; renewal; transfer.--

(1)  An application to the board for a certificate of authority shall be accompanied by the statement and other matters described in this section in the form prescribed by the board. Annually thereafter, within 3 months after the end of its fiscal period, or within an extension of time therefor, as the board for good cause may grant, the person authorized to engage in the sale of preneed contracts shall file with the department a full and true statement of her or his financial condition, transactions, and affairs, prepared on a basis as adopted by rule of the board, as of the preceding fiscal period or at such other time or times as the board may provide by rule, together with information and data which may be required by the board.

(2)  The statement shall include the following:

(a)  The types of preneed contracts proposed to be written.

(b)  The name and address of the place of business of the person offering to write preneed contracts.

(c)  Evidence that the person offering the statement:

1.  Has the ability to discharge her or his liabilities as they become due in the normal course of business and has sufficient funds available during the calendar year to perform her or his obligations under her or his contract;

2.  Has complied with the trust requirements for the funds received under contracts issued by herself or himself as hereinafter described;

3.  Has disbursed interest, dividends, or accretions earned by trust funds, in accordance with this chapter and rules promulgated thereunder; and

4.  Has complied with this chapter and any rules of the board and the department.

(d)  Any other information considered necessary by the board to meet its responsibilities under this chapter.

(3)  If the person is an individual, the statement shall be sworn by her or him; if a firm or association, by all members thereof; or, if a corporation, by any officer of the corporation.

(4)(a)  An application to the board for an initial certificate of authority shall be accompanied by an application fee of $500. Thereafter, each annual application for renewal of a certificate of authority shall be accompanied by the appropriate fee as follows:

1.  For a certificateholder with no preneed contract sales during the immediately preceding year ............ $300.

2.  For a certificateholder with at least 1 but fewer than 50 preneed contract sales during the immediately preceding year ............ $400.

3.  For a certificateholder with at least 50 but fewer than 250 preneed contract sales during the immediately preceding year ............ $500.

4.  For a certificateholder with at least 250 but fewer than 1,000 preneed contract sales during the immediately preceding year ............ $850.

5.  For a certificateholder with at least 1,000 but fewer than 2,500 preneed contract sales during the immediately preceding year ............ $1,500.

6.  For a certificateholder with at least 2,500 but fewer than 5,000 preneed contract sales during the immediately preceding year ............ $2,500.

7.  For a certificateholder with at least 5,000 but fewer than 15,000 preneed contract sales during the immediately preceding year ............ $6,000.

8.  For a certificateholder with at least 15,000 but fewer than 30,000 preneed contract sales during the immediately preceding year ............ $12,500.

9.  For a certificateholder with 30,000 preneed contract sales or more during the immediately preceding year ............ $18,500.

(b)  Any person or entity that is part of a common business enterprise that has a certificate of authority issued pursuant to this section and elects to operate under a name other than that of the common business enterprise shall submit an application on a form adopted by the board to become a branch registrant. Upon the approval of the board that such entity qualifies to sell preneed contracts under this chapter except for the requirements of subparagraph (2)(c)1. and if the certificateholder meets the requirements of such subparagraph, a branch registration shall be issued. Each branch registrant may operate under the certificate of authority of the common business enterprise upon the payment of a fee established by the board not to exceed $150 accompanying the application on April 1 annually. The fee shall be payable to the department's Regulatory Trust Fund.

(5)  Upon the board being satisfied that the statement and matters which may accompany it meet the requirements of this chapter and of its rules, it shall issue or renew the certificate of authority if upon investigation by the board it appears that the principals, including directors, officers, stockholders, employees, and agents of such person, are of good moral character and have reputations for fair dealing in business matters.

(6)  The certificate of authority shall expire annually on June 1, unless renewed, or at such other time or times as the board may provide by rule.

(7)  An application for an initial certificate of authority or for the annual renewal of the certificate shall disclose the existence of all preneed contracts for service or merchandise funded by any method other than a method permitted by this chapter, which contracts are known to the applicant and name the applicant or her or his business as the beneficiary upon the death of the purchaser of the preneed contract. Such disclosure shall include the name and address of the contract purchaser, the name and address of the institution where such funds are deposited, and the number used by the institution to identify the account. With respect to contracts entered into before January 1, 1983, the board may not deny or refuse to renew a certificate of authority solely on the basis of such disclosure. The board may not require the purchaser of any such contract to liquidate the account if such account was established before July 1, 1965. The board may use the information disclosed to notify the contract purchaser and the institution in which such funds are deposited should the holder of a certificate of authority be unable to fulfill the requirements of the contract.

(8)  On or before April 1 of each year, the certificateholder shall file with the board in the form prescribed by the board a full and true statement as to the activities of any trust established by it pursuant to this chapter for the preceding calendar year.

(9)  In addition to any other penalty that may be provided for under this chapter, the board may levy a fine not to exceed $50 a day for each day the certificateholder fails to file its annual statement, and the board may levy a fine not to exceed $50 a day for each day the certificateholder fails to file the statement of activities of the trust. Upon notice to the certificateholder by the board that the certificateholder has failed to file the annual statement or the statement of activities of the trust, the certificateholder's authority to sell preneed contracts shall cease while such default continues. The board shall deposit all sums collected under this section to the credit of the department's Regulatory Trust Fund.

(10)  To facilitate uniformity in financial statements and to facilitate department analysis, the board may by rule adopt a form for financial statements.

(11)  The board may authorize the transfer of certificates of authority and establish fees for the transfer in an amount not to exceed $100. Upon receipt of an application for transfer, the executive director may grant a temporary certificate of authority to the proposed transferee, based upon criteria established by the board by rule, which criteria shall promote the purposes of this chapter in protecting the consumer. Such a temporary certificate of authority shall expire at the conclusion of the next regular meeting of the board unless renewed by the board.

(12)  Each certificateholder shall pay to the department's Regulatory Trust Fund an amount established by the board not to exceed $10 for each preneed contract entered into. This amount must be paid within 60 days after the end of each quarter. These funds must be used to defray the cost of the board and the department in administering the provisions of this chapter.

History.--s. 5, ch. 28211, 1953; ss. 6, 7, ch. 65-393; ss. 13, 35, ch. 69-106; s. 4, ch. 77-438; s. 169, ch. 79-164; s. 246, ch. 79-400; s. 2, ch. 81-318; ss. 4, 31, 32, ch. 83-316; s. 2, ch. 85-89; s. 4, ch. 88-139; ss. 93, 122, ch. 93-399; s. 20, ch. 96-400; s. 1147, ch. 97-103; s. 27, ch. 99-155; s. 10, ch. 2000-195; s. 102, ch. 2004-301.

¹Note.--Section 102, ch. 2004-301, renumbered s. 497.407 as s. 497.453 and amended the section, effective October 1, 2005, to read:

497.453  Application for preneed license, procedures and criteria; renewal; reports.--

(1)  PRENEED LICENSE APPLICATION PROCEDURES.--

(a)  A person seeking a license to enter into preneed contracts shall apply for such licensure using forms prescribed by rule.

(b)  The application shall require the name, business address, residence address, date and place of birth or incorporation, and business phone number of the applicant and all principals of the applicant. The application shall require the applicant's social security number, or, if the applicant is an entity, its federal tax identification number.

(c)  The application may require information as to the applicant's financial resources.

(d)  The application may require information as to the educational and employment history of an individual applicant; and as to applicants that are not natural persons, the business and employment history of the applicant and principals of the applicant.

(e)  The application shall require the applicant to disclose whether the applicant or any of the applicant's principals have ever been convicted or found guilty of, or entered a plea of no contest to, regardless of adjudication, any crime in any jurisdiction.

(f)  The application shall require the applicant to disclose whether the applicant or any of the applicant's principals have ever had a license or the authority to practice a profession or occupation refused, suspended, fined, denied, or otherwise acted against or disciplined by the licensing authority of any jurisdiction. A licensing authority's acceptance of a relinquishment of licensure, stipulation, consent order, or other settlement, offered in response to or in anticipation of the filing of charges against the license, shall be construed as action against the license.

(g)  The application shall require the applicant and its principals to provide fingerprints in accordance with part I of this chapter.

(h)  The application shall state the name and license number of the funeral establishment, cemetery company, direct disposal establishment, or monument establishment, under whose license the preneed application is made.

(i)  The application shall state the types of preneed contracts proposed to be written.

(j)  The application shall disclose the existence of all preneed contracts for service or merchandise entered into by the applicant, or by any other entity under common control with the applicant, without or prior to authorization under this section or predecessors to this section. As to each such contract, the applicant shall disclose the name and address of the contract purchaser, the status of the contract, and what steps or measures the applicant has taken to ensure performance of unfulfilled contracts, setting forth the treatment and status of funds received from the customer in regard to the contract, and stating the name and address of any institution where such funds are deposited and the number used by the institution to identify the account. With respect to contracts entered into before January 1, 1983, an application to issue or renew a preneed license may not be denied solely on the basis of such disclosure. The purchaser of any such contract may not be required to liquidate the account if such account was established before July 1, 1965. Information disclosed may be used by the licensing authority to notify the contract purchaser and the institution in which such funds are deposited should the holder of a preneed ²license be unable to fulfill the requirements of the contract.

(k)  The application shall require the applicant to demonstrate that the applicant complies and will comply with all requirements for preneed contract licensure under this chapter.

(l)  The application may require any other information considered necessary by the department or board to meet its responsibilities under this chapter.

(m)  The application shall be sworn to and signed by the applicant if a natural person, or by the president of an applicant that is not a natural person.

(n)  The application shall be accompanied by a nonrefundable fee as determined by licensing authority rule but not to exceed $500.

(2)  ACTION CONCERNING APPLICATIONS.--A duly completed application for licensure under this section, accompanied by the required fees, shall be approved and a license issued, if the licensing authority determines that the following conditions are met:

(a)  The application is made by a funeral establishment, cemetery company, direct disposal establishment, or monument establishment, or on behalf of one of the preceding licensees by its agent in the case of a corporate entity, licensed and in good standing under this chapter.

(b)  The applicant meets net worth requirements specified by rule of the licensing authority.

(c)  The applicant has and will have the ability to discharge her or his liabilities as they become due in the normal course of business, and has and will have sufficient funds available during the calendar year to perform her or his obligations under her or his contracts.

(d)  If the applicant or any entity under common control with the applicant has entered into preneed contracts prior to being authorized to do so under the laws of this state:

1.  The licensing authority determines that adequate provision has been made to ensure the performance of such contracts.

2.  The licensing authority determines that the improper sale of such preneed contracts prior to authorization under this chapter does not indicate, under the facts of the particular application in issue, that the applicant has a disregard of the laws of this state such as would expose the public to unreasonable risk if the applicant were issued a preneed license.

3.  Nothing in this section shall imply any authorization to enter into preneed contracts without authorization under this chapter.

(e)  Neither the applicant nor the applicant's principals have a demonstrated history of conducting their business affairs to the detriment of the public.

(f)  The applicant and the applicant's principals are of good character and have no demonstrated history of lack of trustworthiness or integrity in business or professional matters.

(g)  The applicant does and will comply with all other requirements of this chapter relating to preneed licensure.

(3)  ISSUANCE OF LICENSES ON PROBATIONARY STATUS.--It is the policy of this state to encourage competition for the public benefit in the preneed contract business by, among other means, the entry of new licensees into that business. To facilitate issuance of licenses concerning applications judged by the licensing authority to be borderline as to qualification for licensure, the licensing authority may issue a new license under this section on a probationary basis, subject to conditions specified by the licensing authority on a case-by-case basis, which conditions may impose special monitoring, reporting, and restrictions on operations for up to the first 12 months of licensure, to ensure the licensee's responsibleness, competency, financial stability, and compliance with this chapter. Provided, no such probationary license shall be issued unless the licensing authority determines that issuance would not pose an unreasonable risk to the public, and the licensing authority must within 12 months after issuance of the license either remove the probationary status or determine that the licensee is not qualified for licensure under this chapter and institute proceedings for revocation of licensure.

(4)  CHANGE IN CONTROL SUBSEQUENT TO LICENSURE.--

(a)  Each licensee under this section must provide notice as required by rule prior to any change in control of the licensee. Any such change is subject to disapproval or to reasonable conditions imposed by the licensing authority, for the protection of the public to ensure compliance with this chapter, based upon criteria established by rule, which criteria shall promote the purposes of this part in protecting the consumer.

(b)  The licensing authority may authorize the transfer of a preneed license and establish by rule a fee for the transfer in an amount not to exceed $500. Upon receipt of an application for transfer, the executive director may grant a temporary preneed license to the proposed transferee, based upon criteria established by the licensing authority by rule, which criteria shall promote the purposes of this chapter in protecting the consumer. Such a temporary preneed license shall expire at the conclusion of the next regular meeting of the board unless renewed by the board. The licensing authority may by rule establish forms and procedures for the implementation of this paragraph.

(5)  RENEWAL OF LICENSES.--

(a)  A preneed license shall expire annually on June 1, unless renewed, or at such other time or times as may be provided by rule. The application for renewal of the license shall be on forms prescribed by rule and shall be accompanied ³by a renewal fee as specified in paragraph (c).

(b)  Within 3 months after the end of its fiscal period, or within an extension of time therefor, as the department for good cause may grant, the licensee shall file with the department a full and true statement of her or his financial condition, transactions, and affairs, prepared on a basis as adopted by rule, as of the end of the preceding fiscal period or at such other time or times as may be required by rule, together with such other information and data which may be required by rule. To facilitate uniformity in financial statements and to facilitate department analysis, there may be adopted by rule a form for financial statements.

(c)  Each annual application for renewal of a preneed license shall be accompanied by the appropriate fee as follows:

1.  For a preneed licensee with no preneed contract sales during the immediately preceding year ............ $300.

2.  For a preneed licensee with at least 1 but fewer than 50 preneed contract sales during the immediately preceding year ............ $400.

3.  For a preneed licensee with at least 50 but fewer than 250 preneed contract sales during the immediately preceding year ............ $500.

4.  For a preneed licensee with at least 250 but fewer than 1,000 preneed contract sales during the immediately preceding year ............ $850.

5.  For a preneed licensee with at least 1,000 but fewer than 2,500 preneed contract sales during the immediately preceding year ............ $1,500.

6.  For a preneed licensee with at least 2,500 but fewer than 5,000 preneed contract sales during the immediately preceding year ............ $2,500.

7.  For a preneed licensee with at least 5,000 but fewer than 15,000 preneed contract sales during the immediately preceding year ............ $6,000.

8.  For a preneed licensee with at least 15,000 but fewer than 30,000 preneed contract sales during the immediately preceding year ............ $12,500.

9.  For a preneed licensee with 30,000 preneed contract sales or more during the immediately preceding year ............ $18,500.

(d)  An application for renewal shall disclose the existence of all preneed contracts for service or merchandise funded by any method other than a method permitted by this chapter, which contracts are known to the applicant and were entered into by the applicant, or any other entity under common control with the applicant, during the annual license period then ending. Such disclosure shall include the name and address of the contract purchaser, the name and address of the institution where such funds are deposited, and the number used by the institution to identify the account.

(e)  In addition to any other penalty that may be provided for under this chapter, there may be levied a late fee as determined by licensing authority rule but not to exceed $50 a day for each day the preneed licensee fails to file its annual statement, and there may be levied a late fee as determined by licensing authority rule but not to exceed $50 a day for each day the preneed licensee fails to file the statement of activities of the trust. Upon notice to the preneed licensee by the department that the preneed licensee has failed to file the annual statement or the statement of activities of the trust, the preneed licensee's authority to sell preneed contracts shall cease while such default continues.

(6)  QUARTERLY PAYMENTS.--In addition to other amounts required to be paid by this section, each preneed licensee shall pay to the Regulatory Trust Fund an amount established by rule not to exceed $10 for each preneed contract entered into. This amount must be paid within 60 days after the end of each quarter. These funds must be used to defray the cost of ⁴administering the provisions of this part.

(7)  BRANCH OPERATIONS AND LICENSURE.--

(a)  Any person or entity that is part of a common business enterprise that has a preneed license issued pursuant to this section and desires to operate under a name other than that of the common business enterprise, may submit an application on a form adopted by rule to become a branch licensee. The application shall be accompanied by an application fee as determined by licensing authority rule but not to exceed $300.

(b)  Upon a determination that such applicant qualifies to sell preneed contracts under this part except for the requirements of paragraph (2)(c), and if the preneed licensee meets the requirements of such paragraph and is in compliance with all requirements of this part regarding its preneed license and operations thereunder, a branch license shall be issued.

(c)  Branch licenses shall be renewed annually by payment of a renewal fee set by licensing authority rule and not to exceed $300. Branch licenses may be renewed only so long as the preneed license of the sponsoring preneed licensee remains in good standing.

(d)  Violations of this part by the branch shall be deemed to be violations of this part by its sponsoring preneed licensee, unless the licensing authority determines that extenuating circumstances indicate that it would be unjust to attribute the branch's misconduct to the sponsoring preneed licensee. Preneed sales of the branch shall be deemed to be sales of the sponsoring licensee for purposes of renewal fees and trust requirements under this chapter.

(e)  The sponsoring preneed licensee shall be responsible for performance of preneed contracts entered into by its branch if the branch does not timely fulfill any such contract.

(8)  ANNUAL TRUST REPORTS.--On or before April 1 of each year, the preneed licensee shall file in the form prescribed by rule a full and true statement as to the activities of any trust established by it pursuant to this part for the preceding calendar year.

(9)  DEPOSIT OF FUNDS.--All sums collected under this section shall be deposited to the credit of the Regulatory Trust Fund.

²Note.--The word "license" was inserted by the editors.

³Note.--The word "by" was inserted by the editors.

⁴Note.--The word "in" preceding the word "administering" was deleted by the editors.

Note.--Former s. 639.10.