Senate Bill sb1610

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    Florida Senate - 2001                                  SB 1610

    By Senators Latvala, Wasserman Schultz, Lee, Sullivan and
    Mitchell




    19-927-01                                               See HB

  1                      A bill to be entitled

  2         An act relating to preneed funeral contracts;

  3         repealing s. 497.417(5), F.S., to delete the

  4         authority of certificateholders offering

  5         preneed funeral merchandise and services to

  6         revest title to trust assets by posting a bond

  7         or using other forms of security or insurance;

  8         repealing ss. 497.423, 497.425, F.S.; providing

  9         for future repeal of provisions authorizing

10         financial responsibility alternatives to the

11         placing of preneed funeral contract proceeds in

12         trust; providing for continued validity of

13         surety bonds issued prior to the repeal date

14         and prohibiting the use of bonds or other forms

15         of security or insurance after that date;

16         repealing ss. 497.337(2)(c), 497.409(2),

17         497.427, F.S.; providing for future repeal of

18         provisions relating to delivery requirements

19         for manufacturers of outer burial receptacles,

20         preneed contract disclosure requirements, and

21         proof of compliance with the law with respect

22         to existing merchandise trust funds,

23         respectively, to conform; amending ss. 497.413,

24         497.429, F.S.; conforming provisions; providing

25         effective dates.

26

27  Be It Enacted by the Legislature of the State of Florida:

28

29         Section 1.  Subsection (5) of section 497.417, Florida

30  Statutes, is repealed.

31

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    Florida Senate - 2001                                  SB 1610
    19-927-01                                               See HB




  1         Section 2.  Paragraph (c) of subsection (1) of section

  2  497.429, Florida Statutes, is amended to read:

  3         497.429  Alternative preneed contracts.--

  4         (1)  Nothing in this chapter shall prevent the

  5  purchaser and the certificateholder from executing a preneed

  6  contract upon the terms stated in this section.  Such

  7  contracts shall be subject to all provisions of this chapter

  8  except:

  9         (c)  Section 497.417(1) and, (3), and (5).

10         Section 3.  Effective July 1, 2002, sections 497.423

11  and 497.425, Florida Statutes, are repealed.

12         Section 4.  (1)  All surety bonds entered into pursuant

13  to section 497.423, Florida Statutes, prior to July 1, 2002,

14  shall remain unimpaired until such time as all obligations

15  secured pursuant to section 497.423(7), Florida Statutes, are

16  fulfilled. A certificateholder may not secure any new preneed

17  contract entered into after July 1, 2002, with the alternative

18  method authorized by section 497.423, Florida Statutes, but

19  shall be required to deposit funds into trust pursuant to

20  section 497.417(1) or section 497.429, Florida Statutes.

21         (2)  All surety bonds entered into pursuant to section

22  497.425, Florida Statutes, prior to July 1, 2002, shall remain

23  unimpaired until such time as all obligations secured pursuant

24  to said section are fulfilled, and the requirements of section

25  497.425(1), Florida Statutes, shall remain in effect until all

26  obligations secured by the bond are fulfilled. A

27  certificateholder may not secure any new preneed contract

28  entered into after July 1, 2002, with the alternative method

29  authorized by section 497.425, Florida Statutes, but shall be

30  required to deposit funds into trust pursuant to section

31  497.417(1) or section 497.429, Florida Statutes.

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    Florida Senate - 2001                                  SB 1610
    19-927-01                                               See HB




  1         (3)  This section shall take effect July 1, 2002.

  2         Section 5.  Effective July 1, 2002, paragraph (c) of

  3  subsection (2) of section 497.337, subsection (2) of section

  4  497.409, and section 497.427, Florida Statutes, are repealed.

  5         Section 6.  Effective July 1, 2002, subsections (2) and

  6  (7) of section 497.413, Florida Statutes, are amended to read:

  7         497.413  Preneed Funeral Contract Consumer Protection

  8  Trust Fund.--

  9         (2)  Within 60 days after the end of each calendar

10  quarter, for each preneed contract written during the quarter

11  and not canceled within 30 days after the date of the

12  execution of the contract, each certificateholder, whether

13  funding preneed contracts by the sale of insurance or by

14  establishing a trust pursuant to s. 497.417 or s. 497.429,

15  shall remit the sum of $2.50 for each preneed contract having

16  a purchase price of $1,500 or less, and the sum of $5 for each

17  preneed contract having a purchase price in excess of $1,500;

18  and each certificateholder utilizing s. 497.423 or s. 497.425

19  shall remit the sum of $5 for each preneed contract having a

20  purchase price of $1,500 or less, and the sum of $10 for each

21  preneed contract having a purchase price in excess of $1,500.

22         (7)  In any situation in which a delinquency proceeding

23  has not commenced, the board may, in its discretion, use the

24  trust fund for the purpose of providing restitution to any

25  consumer, owner, or beneficiary of a preneed contract or

26  similar regulated arrangement under this chapter entered into

27  after June 30, 1977.  If, after investigation, the board

28  determines that a certificateholder has breached a preneed

29  contract by failing to provide benefits or an appropriate

30  refund, or that a provider, who is a former certificateholder

31  or an establishment which has been regulated under this

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    Florida Senate - 2001                                  SB 1610
    19-927-01                                               See HB




  1  chapter or chapter 470, has sold a preneed contract and has

  2  failed to fulfill the arrangement or provide the appropriate

  3  refund, and such certificateholder or provider does not

  4  provide or does not possess adequate funds to provide

  5  appropriate refunds, payments from the trust fund may be

  6  authorized by the board. In considering whether payments shall

  7  be made or when considering who will be responsible for such

  8  payments, the board shall consider whether the

  9  certificateholder or previous provider has been acquired by a

10  successor who is or should be responsible for the liabilities

11  of the defaulting entity. With respect to preneed contracts

12  funded by life insurance, payments from the fund shall be

13  made: if the insurer is insolvent, but only to the extent that

14  funds are not available through the liquidation proceeding of

15  the insurer; or if the certificateholder is unable to perform

16  under the contract and the insurance proceeds are not

17  sufficient to cover the cost of the merchandise and services

18  contracted for. In no event shall the board approve payments

19  in excess of the insurance policy limits unless it determines

20  that at the time of sale of the preneed contract, the

21  insurance policy would have paid for the services and

22  merchandise contracted for.  Such monetary relief shall be in

23  an amount as the board may determine and shall be payable in

24  such manner and upon such conditions and terms as the board

25  may prescribe.  However, with respect to preneed contracts to

26  be funded pursuant to s. 497.417 or, s. 497.419, s. 497.423,

27  or s. 497.425, any restitution made pursuant to this

28  subsection shall not exceed, as to any single contract or

29  arrangement, the lesser of the gross amount paid under the

30  contract or 4 percent of the uncommitted assets of the trust

31  fund.  With respect to preneed contracts funded by life

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    Florida Senate - 2001                                  SB 1610
    19-927-01                                               See HB




  1  insurance policies, any restitution shall not exceed, as to

  2  any single contract or arrangement, the lesser of the face

  3  amount of the policy, the actual cost of the arrangement

  4  contracted for, or 4 percent of the uncommitted assets of the

  5  trust fund. The total of all restitutions made to all

  6  applicants under this subsection in a single fiscal year shall

  7  not exceed the greater of 30 percent of the uncommitted assets

  8  of the trust fund as of the end of the most recent fiscal year

  9  or $120,000.  The department may use moneys in the trust fund

10  to contract with independent vendors pursuant to chapter 287

11  to administer the requirements of this subsection.

12         Section 7.  Effective July 1, 2002, subsection (1) of

13  section 497.429, Florida Statutes, as amended by this act, is

14  amended to read:

15         497.429  Alternative preneed contracts.--

16         (1)  Nothing in this chapter shall prevent the

17  purchaser and the certificateholder from executing a preneed

18  contract upon the terms stated in this section.  Such

19  contracts shall be subject to all provisions of this chapter

20  except:

21         (a)  Section 497.409(2).

22         (b)  Section 497.415.

23         (c)  Section 497.417(1) and (3).

24         (d)  Section 497.419(1), (2), and (5).

25         (e)  Section 497.421.

26         (f)  Section 497.423.

27         (g)  Section 497.425.

28         Section 8.  Except as otherwise expressly provided in

29  this act, this act shall take effect July 1, 2001.

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    Florida Senate - 2001                                  SB 1610
    19-927-01                                               See HB




  1            *****************************************

  2                       LEGISLATIVE SUMMARY

  3    Repeals the authority of certificateholders offering
      preneed funeral merchandise and services to revest title
  4    to preneed contract trust assets by posting a bond or
      using other forms of security or insurance. Provides for
  5    future repeal of provisions authorizing financial
      responsibility alternatives to the placing of preneed
  6    funeral contract funds in trust. Provides for continued
      validity of surety bonds issued prior to the repeal date,
  7    and prohibits the use of bonds or other forms of security
      or insurance after that date. (See bill for details.)
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