Second Regular Session
Seventy-third General Assembly
STATE OF COLORADO
ENGROSSED
This Version Includes All Amendments Adopted
on Second Reading in the House of Introduction
LLS NO. 22-0324.01 Yelana Love x2295
HOUSE BILL 22-1228
House Committees Senate Committees
Judiciary
A BILL FOR AN ACT
C
ONCERNING THE CONTINUATION OF THE REGULATION OF PRENEED101
FUNERAL CONTRACTS , AND, IN CONNECTION THEREWITH ,102
IMPLEMENTING THE RECOMMENDAT IONS CONTAINED IN THE103
2021
SUNSET REPORT BY THE DEPARTMENT OF REGULATORY104
AGENCIES.105
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov/
.)
Sunset Process - House Judiciary Committee. The bill
implements the recommendations of the department of regulatory
HOUSE
Amended 2nd Reading
March 3, 2022
HOUSE SPONSORSHIP
Roberts and Bockenfeld,
SENATE SPONSORSHIP
(None),
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing statute.
Dashes through the words indicate deletions from existing statute. agencies, as contained in the department's sunset review of preneed
funeral contracts, as follows:
! Continues the regulation of preneed funeral contracts for 7
years, to September 1, 2029;
! Removes from statute the surety bond or net worth
requirements for an applicant for a license to sell preneed
funeral contracts and requires the commissioner of
insurance (commissioner) to establish the requirements in
rule;
! Allows the commissioner to investigate the books, records,
and accounts of a contract seller without the requirement
that the commissioner receive a complaint or indication of
noncompliance;
! Removes the fees for license renewal from statute and
requires the commissioner to establish the fees in rule
based on the cost of regulating the industry and the
outstanding preneed contract obligations of the contract
sellers;
! Requires money held in trust for a preneed contract that is
unclaimed after a reasonable amount of time to be reported
to the state treasurer for deposit into the unclaimed property
trust fund; and
! Requires each funeral establishment, at the time of
registration renewal, to attest to whether the funeral
establishment sells preneed contracts and requires the
director of the division of professions and occupations to
enter into a memorandum of understanding with the
commissioner to share information on funeral
establishments that sell preneed contracts.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, 24-34-104, repeal2
(23)(a)(X); and add (30)(a)(VII) as follows:3
24-34-104. General assembly review of regulatory agencies4
and functions for repeal, continuation, or reestablishment - legislative5
declaration - repeal. (23) (a) The following agencies, functions, or both,6
are scheduled for repeal on September 1, 2022:7
(X) The regulation of preneed funeral contracts in accordance
8
1228-2- with article 15 of title 10;1
(30) (a) The following agencies, functions, or both, are scheduled2
for repeal on September 1, 2029:3
(VII) T
HE REGULATION OF PRENEED FUNERAL CONTRACTS IN4
ACCORDANCE WITH ARTICLE 15 OF TITLE 10.5
SECTION 2. In Colorado Revised Statutes, amend 10-15-123 as6
follows:7
10-15-123. Repeal of article. This article 15 is repealed, effective8
September 1, 2022
SEPTEMBER 1, 2029. Before its THE repeal, the9
department of regulatory agencies shall review the regulation of preneed10
funeral contracts in accordance with section 24-34-104.11
SECTION 3. In Colorado Revised Statutes, 10-15-103, amend12
(1)(a), (4)(a), and (5)(b) as follows:13
10-15-103. License procedure - records - examination of14
records - definition - rules. (1) (a) A contract seller shall not enter into15
a preneed contract or accept any funds or other consideration without a16
license from the commissioner. To be valid, an application for an initial17
license must be in writing, signed by the applicant, and duly verified on18
forms furnished by the commissioner. Each application must be19
accompanied by payment of five hundred dollars and either: PROOF OF20
EITHER THE NET WORTH OR SURETY BOND REQUIREMENTS ESTABLISHED21
BY THE COMMISSIONER BY RULE.22
(I) A current balance sheet, income statement, and statement of23
cash flow to demonstrate that the business has a net worth of at least ten24
thousand dollars, signed by a certified public accountant ("CPA"), or, if25
prepared by the applicant or public accountant, accompanied by a current26
tax return; or27
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-3- (II) A surety bond of at least ten thousand dollars to honor1
preneed contract obligations.2
(4) (a) The commissioner may investigate the books, records, and3
accounts of a contract seller to ensure that trust funds, preneed contracts,4
and preneed insurance policies comply with this article ARTICLE 15. The5
commissioner, or a qualified person designated by the commissioner, may6
examine the books, records, and accounts of the contract seller as often7
as necessary upon receiving a complaint or indication of noncompliance8
and may require the attendance of and examine under oath all persons9
whose testimony the commissioner needs for this purpose.10
(5) (b) T
HE COMMISSIONER SHALL ESTABLISH the annual renewal11
fee shall be based upon the aggregate preneed contract price of all
12
preneed contracts outstanding at the end of each calendar year. If the13
aggregate preneed contract price is: BY RULE BASED ON THE COST OF14
REGULATING THE INDUSTRY AND THE OUTSTANDING PRENEED CONTRACT15
OBLIGATIONS OF THE CONTRACT SELLERS .16
(I) One hundred thousand dollars or less, the annual renewal fee17
shall be one hundred dollars;18
(II) Greater than one hundred thousand dollars but not exceeding19
five hundred thousand dollars, the annual renewal fee shall be two20
hundred dollars;21
(III) Greater than five hundred thousand dollars but not exceeding22
one million dollars, the annual renewal fee shall be five hundred dollars;23
(IV) Greater than one million dollars but not exceeding five24
million dollars, the annual renewal fee shall be one thousand dollars;25
(V) Greater than five million dollars but not exceeding ten million26
dollars, the annual renewal fee shall be one thousand five hundred27
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-4- dollars;1
(VI) In excess of ten million dollars, the annual renewal fee shall2
be two thousand dollars.3
SECTION 4. In Colorado Revised Statutes, add 10-15-111.7 as4
follows:5
10-15-111.7. Disposition of unclaimed preneed funeral6
contracts - unclaimed property trust fund. (1) NOTWITHSTANDING THE7
FAILURE OF A PRENEED CONTRACT FOR FUNERAL SERVICES BENEFICIARY'S8
HEIRS, ASSIGNS, OR DULY AUTHORIZED REPRESENTATIVE TO CANCEL A9
PRENEED CONTRACT FOR FUNERAL SERVICES WITHIN ONE HUNDRED10
SIXTY-EIGHT HOURS AFTER THE DEATH OF THE PRENEED CONTRACT11
BENEFICIARY, EACH CONTRACT SELLER SHALL REQUIRE A TRUSTEE WITH12
WHOM PRENEED CONTRACT FUNDS HAVE BEEN DEPOSITED FOR A PRENEED13
CONTRACT THAT IS UNCLAIMED TO REPORT TO THE STATE TREASURER AS14
PROVIDED IN SECTION 38-13-401. THE TRUSTEE SHALL COMPLY WITH THE15
REQUIREMENTS OF THE "REVISED UNIFORM UNCLAIMED PROPERTY ACT",16
ARTICLE 13 OF TITLE 38, FOR DEPOSIT OF THE UNCLAIMED PRENEED17
CONTRACT FUNDS INTO THE UNCLAIMED PROPERTY TRUST FUND CREATED18
IN SECTION 38-13-801 (1)(a).19
(2) A PRENEED CONTRACT FOR FUNERAL SERVICES IS UNCLAIMED20
AT THE EARLIER OF THE FOLLOWING:21
(a) THREE YEARS AFTER THE DATE ON WHICH THE CONTRACT22
SELLER HAS KNOWLEDGE OF THE DEATH OF THE PRENEED CONTRACT23
BENEFICIARY, OBTAINED THROUGH ANY SOURCE , INCLUDING A24
DECLARATION OF DEATH, A DEATH CERTIFICATE, A COMPARISON OF THE25
CONTRACT SELLER'S RECORDS AGAINST THE UNITED STATES SOCIAL26
SECURITY ADMINISTRATION'S DEATH MASTER FILE, OR OTHER EQUIVALENT27
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-5- RESOURCE;1
(b) THE DATE THE PRENEED CONTRACT BENEFICIARY , IF LIVING,2
WOULD HAVE ATTAINED ONE HUNDRED FIFTEEN YEARS OF AGE ; OR3
(c) SIXTY-FIVE YEARS FROM THE DATE THAT THE PRENEED4
CONTRACT WAS EXECUTED .5
(3) FOR PURPOSES OF THIS SECTION, THE AMOUNT REPORTABLE6
FOR AN UNCLAIMED PRENEED CONTRACT IS THE AMOUNT PAID BY THE7
PURCHASER TO THE CONTRACT SELLER , LESS SELLING COSTS NOT TO8
EXCEED FIFTEEN PERCENT OF THE TOTAL PRENEED CONTRACT PRICE ,9
LIQUIDATED DAMAGES, AND CONTRACTUAL OFFSETS, AS AUTHORIZED BY10
LAW.11
(4) SUBSECTION (2)(a) OF THIS SECTION DOES NOT REQUIRE A12
CONTRACT SELLER TO COMPARE THE CONTRACT SELLER'S RECORDS TO THE13
UNITED STATES SOCIAL SECURITY ADMINISTRATION'S DEATH MASTER FILE.14
SECTION 5. In Colorado Revised Statutes, 12-135-110, amend15
(2)(b) as follows:16
12-135-110. Registration required. (2) (b) Each funeral17
establishment registration shall be renewed, according to a schedule18
established by the director in accordance with section 12-20-202 (1), in19
a form as determined by the director. A
T THE TIME OF RENEWAL, EACH20
FUNERAL ESTABLISHMENT SHALL ATTEST TO WHETHER THE FUNERAL21
ESTABLISHMENT SELLS PRENEED CONTRACTS . THE DIRECTOR SHALL ENTER22
INTO A MEMORANDUM OF UNDERSTANDING WITH THE COMMISSIONER OF23
INSURANCE TO SHARE INFORMATION REGARDING FUNERAL24
ESTABLISHMENTS THAT SELL PRENEED CONTRACTS .25
SECTION 6. Act subject to petition - effective date. This act26
takes effect at 12:01 a.m. on the day following the expiration of the27
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-6- ninety-day period after final adjournment of the general assembly; except1
that, if a referendum petition is filed pursuant to section 1 (3) of article V2
of the state constitution against this act or an item, section, or part of this3
act within such period, then the act, item, section, or part will not take4
effect unless approved by the people at the general election to be held in5
November 2022 and, in such case, will take effect on the date of the6
official declaration of the vote thereon by the governor.7
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