HOUSE AMENDMENT
Bill No. HB 991 Barcode 151853
Amendment No. 01 (for drafter's use only)
CHAMBER ACTION
Senate House
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5 ORIGINAL STAMP BELOW
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11 The Committee on Banking offered the following:
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13 Amendment (with title amendment)
14 Remove from the bill: Everything after the enacting clause
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16 and insert in lieu thereof:
17 Section 1. Section 497.417, Florida Statutes, is
18 amended to read:
19 497.417 Disposition of proceeds received on
20 contracts.--
21 (5) The certificateholder, at her or his election,
22 shall have the right and power, at any time, to revest in it
23 title to the trust assets, or its pro rata share thereof,
24 provided it has complied with:
25 (a) s. 497.423 or
26 (b) for contracts written prior to July 1, 2001,
27 section 497.425 or
28 (c) for any company authorized to do business in this
29 state that has total bonded liability exceeding $100,000,000
30 as of July 1, 2001, for contracts written prior to December
31 31, 2004, section 497.425.
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HOUSE AMENDMENT
Bill No. HB 991 Barcode 151853
Amendment No. 01 (for drafter's use only)
1 (6) Notwithstanding anything contained in this chapter
2 to the contrary, the certificateholder, via its election to
3 sell or offer for sale preneed contracts subject to this
4 section, shall represent and warrant, and is hereby deemed to
5 have done such, to all federal and Florida taxing authorities,
6 as well as to all potential and actual preneed contract
7 purchasers, that:
8 (a) section 497.423 is a viable option available to it
9 at all relevant times or
10 (b) section 497.425 is a viable option available to it
11 at all relevant times for contracts written prior to July 1,
12 2001, for funds not held in trust as of July 1, 2001, or
13 (c) for any company authorized to do business in this
14 state that has total bonded liability exceeding $100,000,000
15 as of July 1, 2001, section 497.425 is a viable option to it
16 at all relevant times for contracts written prior to December
17 31, 2004, for funds not held in trust as of July 1, 2001.
18 (7) (6) This section, as amended by s. 6, chapter
19 83-316, Laws of Florida, applies to preneed contracts entered
20 into before October 1, 1993, and as amended by s. 98, chapter
21 93-399, Laws of Florida, applies to preneed contracts entered
22 into on or after October 1, 1993.
23 Section 2. Section 497.425, Florida Statutes, is
24 amended to read:
25 497.425 Alternatives to deposits under s. 497.417.--
26 (1)(a) As an alternative to the requirements of s.
27 497.417 that relate to trust funds for contracts written prior
28 to July 1, 2001, or that relate to trust funds for contracts
29 written prior to December 31, 2004, by any company authorized
30 to do business in this state that has total bonded liability
31 exceeding $100,000,000 as of July 1, 2001, a certificateholder
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HOUSE AMENDMENT
Bill No. HB 991 Barcode 151853
Amendment No. 01 (for drafter's use only)
1 may purchase a surety bond for funds not held in trust as of
2 July 1, 2001, in an amount not less than the aggregate value
3 of outstanding liabilities on undelivered preneed contracts
4 for merchandise and services. For the purpose of this
5 section, the term "outstanding liabilities" means the gross
6 replacement or wholesale value of the preneed merchandise and
7 services. The bond shall be made payable to the State of
8 Florida for the benefit of the board and all purchasers of
9 preneed cemetery merchandise or services. The bond must be
10 approved by the board.
11 (b) The amount of the bond shall be based on a report
12 documenting the outstanding liabilities of the
13 certificateholder and shall be prepared by the
14 certificateholder using generally accepted accounting
15 principles and signed by the certificateholder's chief
16 financial officer.
17 (c) The report shall be compiled as of the end of the
18 certificateholder's fiscal year and updated annually. The
19 amount of the bond shall be increased or decreased as
20 necessary to correlate with changes in the outstanding
21 liabilities.
22 (d) If a certificateholder fails to maintain a bond
23 pursuant to this section, the certificateholder shall cease
24 the sale of preneed merchandise and services.
25 (2) Upon prior approval by the board, the
26 certificateholder may file a letter of credit with the board
27 in lieu of a surety bond. Such letter of credit must be in a
28 form, and is subject to terms and conditions, prescribed by
29 the board. It may be revoked only with the express approval of
30 the board.
31 (3)(a) A buyer of preneed merchandise or services who
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HOUSE AMENDMENT
Bill No. HB 991 Barcode 151853
Amendment No. 01 (for drafter's use only)
1 does not receive such services or merchandise due to the
2 economic failure, closing, or bankruptcy of the
3 certificateholder must file a claim with the surety as a
4 prerequisite to payment of the claim and, if the claim is not
5 paid, may bring an action based on the bond and recover
6 against the surety. In the case of a letter of credit or cash
7 deposit that has been filed with the board, the buyer may file
8 a claim with the board.
9 (b) In order to qualify for recovery on any claim
10 under paragraph (a), the buyer must file the claim no later
11 than 1 year after the date on which the certificateholder
12 closed or bankruptcy was filed.
13 (c) The board may file a claim with the surety on
14 behalf of any buyer under paragraph (a). The surety shall pay
15 the amount of the claims to the board for distribution to
16 claimants entitled to restitution and shall be relieved of
17 liability to that extent.
18 (d) The liability of the surety under any bond may not
19 exceed the aggregate amount of the bond, regardless of the
20 number or amount of claims filed.
21 (e) If the total value of the claims filed exceeds the
22 amount of the bond, the surety shall pay the amount of the
23 bond to the board for distribution to claimants entitled to
24 restitution and shall be relieved of all liability under the
25 bond.
26 (4) The certificateholder shall maintain accurate
27 records of the bond and premium payments on it, which records
28 shall be open to inspection by the board.
29 (5) For purposes of this section, a preneed contract
30 is a contract calling for the delivery of merchandise and
31 services in the future and entered into before the death of
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HOUSE AMENDMENT
Bill No. HB 991 Barcode 151853
Amendment No. 01 (for drafter's use only)
1 the prospective recipient.
2 (6) This act does not relieve the certificateholder or
3 other entity from liability for nonperformance of contractual
4 terms unless the certificateholder cannot deliver the
5 merchandise or services because of a national emergency,
6 strike, or act of God.
7 (7) The board may require the holder of any assets of
8 the certificateholder to furnish written verification of the
9 financial report required to be submitted by the
10 certificateholder or other entity.
11 (8) Any preneed contract which promises future
12 delivery of merchandise at no cost constitutes a paid-up
13 contract. Merchandise which has been delivered is not covered
14 by the required performance bond or letter of credit even
15 though the contract is not completely paid. The
16 certificateholder may not cancel a contract unless the
17 purchaser is in default according to the terms of the
18 contract. A contract sold, discounted, and transferred to a
19 third party constitutes a paid-up contract for the purposes of
20 the performance bond or letter of credit.
21 (9) Each contract must state the type, size, and
22 design of merchandise and the description of service to be
23 delivered or performed.
24 (10) A purchaser and a certificateholder who are
25 parties to a preneed contract executed prior to July 2, 1988,
26 may enter into an amended preneed contract which is made
27 subject to this section.
28 (11) The board may adopt forms and rules necessary to
29 implement this section, including, but not limited to, rules
30 which ensure that the surety bond and line of credit provide
31 liability coverage for preneed merchandise and services.
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HOUSE AMENDMENT
Bill No. HB 991 Barcode 151853
Amendment No. 01 (for drafter's use only)
1 (12) Certificateholders may utilize the alternative to
2 section 497.417 provided in this section only for contracts
3 written prior to July 1, 2001, for funds not held in trust as
4 of July 1, 2001, or for contracts written prior to December
5 31, 2004 by any company authorized to do business in this
6 state that has total bonded liability exceeding $100,000,000
7 as of July 1, 2001, for funds not held in trust as of July 1,
8 2001.
9 Section 3. Except as otherwise provided herein, this
10 act shall take effect July 1, 2001.
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13 ================ T I T L E A M E N D M E N T ===============
14 And the title is amended as follows:
15 On page 1, line 5,
16 remove from the title of the bill: all of said lines,
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18 and insert in lieu thereof:
19 and burial merchandise and services contracts;
20 amending s. 497.417, F.S.; revising the
21 authority of certificateholders offering
22 preneed funeral and burial merchandise and
23 services contracts to revest title to trust
24 assets by posting a bond or using other forms
25 of security or insurance; providing a time
26 limitation on such authority; amending s.
27 497.425, F.S.; to provide a time limitation on
28 the authority to post certain bonds to secure
29 preneed contract assets; providing an effective
30 date.
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