Connecticut 2011 Regular Session

Connecticut House Bill HB06300 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	General Assembly Raised Bill No. 6300
2	2	January Session, 2011 LCO No. 2933
3	3	02933_______GL_
4	4	Referred to Committee on General Law
5	5	Introduced by:
6	6	(GL)
7	7
8	8	General Assembly
9	9
10	10	Raised Bill No. 6300
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12	12	January Session, 2011
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14	14	LCO No. 2933
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16	16	02933_______GL_
17	17
18	18	Referred to Committee on General Law
19	19
20	20	Introduced by:
21	21
22	22	(GL)
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24	24	AN ACT CONCERNING FUNERAL SERVICE CONTRACTS.
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26	26	Be it enacted by the Senate and House of Representatives in General Assembly convened:
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28	28	Section 1. Section 42-200 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2011):
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30	30	(a) For the purposes of this section and sections 42-201 to 42-206c, as amended by this act, inclusive, "funeral service contract" means a contract which requires the payment of money or the delivery of securities or the partial, collateral or complete assignment of the ownership of an existing life insurance policy or naming of a funeral home as beneficiary of an existing life insurance policy in exchange for the final disposition of a dead human body, including funeral, burial or other services, or the furnishing of personal property or funeral merchandise in connection with any such disposition, wherein the use or delivery of such services, property or merchandise is not required immediately, "beneficiary" means the person for whom the goods or services purchased in a funeral service contract are to be provided, and "purchaser" means the person who signs the funeral service contract.
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32	32	(b) A funeral service contract shall be in writing and shall contain the following:
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34	34	(1) The name, address, telephone number and Social Security number of the beneficiary and the purchaser, unless the purchaser refuses to provide a Social Security number;
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36	36	(2) The name, address, telephone number and license number of the funeral director for the funeral service establishment providing the goods or services;
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38	38	(3) A list of the selected goods or services, if any;
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40	40	(4) The amount of funds paid or to be paid by the purchaser for such contract, the method of payment and a description of how such funds will be invested and how such investments are limited to those authorized pursuant to subsection (c) of section 42-202, as amended by this act, or a description of any assignment of an existing life insurance policy which is used to fund a funeral service contract;
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42	42	(5) A description of any price guarantees by the funeral service establishment or, if there are no such guarantees, a specific statement that the contract contains no guarantees on the price of the goods or services contained in the contract;
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44	44	(6) The name and address of the escrow agent designated to hold the prepaid funeral [services] service contract funds;
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46	46	(7) A written representation, in clear and conspicuous type, that the purchaser should receive a notice from the escrow agent acknowledging receipt of the initial deposit not later than twenty-five days after receipt of such deposit by a licensed funeral director;
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48	48	(8) A description of any fees to be paid from the escrow account to the escrow agent or any third party provider;
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50	50	(9) A description of the ability of the purchaser or the beneficiary to cancel a revocable funeral service contract and the effect of cancelling such contract;
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52	52	(10) For irrevocable contracts, a description of the ability of the beneficiary to transfer such contract to another funeral home or to reassign the ownership or to change the beneficiary for any life insurance policy used to fund a funeral service contract to the funeral home to which the funeral service contract has been transferred; and
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54	54	(11) The signature of the purchaser or authorized representative and the licensed funeral director of the funeral service establishment.
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56	56	(c) A funeral service establishment shall maintain a copy of all funeral service contracts entered into or assigned to such establishment and a list of each escrow account established pursuant to such contracts. Such list shall include the name and address of the escrow agent, the amount of funds deposited with such agent and the name and address of the purchaser of the funeral services contract. Such contracts shall be maintained by the funeral service establishment for a period of six years after the completion of the contracted services. Such establishment shall disclose such information, upon request, to the Commissioner of Public Health, the Commissioner of Consumer Protection or the Attorney General.
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58	58	(d) A funeral service establishment shall notify the purchaser of each prepaid funeral contract with such establishment not later than ten days after any transfer of more than a fifty per cent ownership share of such establishment to another person or entity or of the closure of such establishment.
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60	60	Sec. 2. Section 42-202 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2011):
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62	62	(a) A licensed funeral service establishment shall deposit any money or securities which such establishment receives pursuant to a funeral service contract, and not later than fifteen days after its receipt of such money or securities, in one or more escrow accounts or into an insurance contract established in accordance with the provisions of this section. Not later than ten days after the initial deposit of such money or securities, the escrow agent shall notify the purchaser, in writing, of the agent's receipt of such initial deposit and the amount of such initial deposit. Such escrow agent shall notify the purchaser of any transfer of such funds or securities, except when such transfer is to pay for services as required by the funeral service contract. Such funds or securities shall not be transferred to an insurance contract without a description to the purchaser by the funeral director of any fees, costs or commissions associated with such insurance contract and without obtaining the written consent of the purchaser to such transfer. Nothing in this section shall preclude a licensed funeral establishment from accepting an absolute, partial or collateral assignment of an existing life insurance policy as a funeral service contract, provided the licensed funeral establishment is named as the assignee of the life insurance policy. If an existing life insurance policy is assigned to a licensed funeral service establishment, such life insurance policy shall be exempt from the escrow account and notification requirements of this section.
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64	64	(b) Each escrow account established pursuant to this section shall be administered and maintained by an escrow agent. The funeral service establishment which deposits money or securities in such escrow account shall appoint such agent who shall be one of the following: (1) A national banking association; (2) a state bank and trust company; (3) a federal or state chartered savings bank; (4) a federal or state chartered savings and loan association; (5) a licensed insurance company; or (6) a registered broker-dealer. No such institution shall be appointed as an agent unless such institution is authorized by law to act as an escrow agent.
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66	66	(c) Assets held in escrow accounts established pursuant to this section shall be invested in one or more of the following: (1) Deposit accounts insured by the Federal Deposit Insurance Corporation; (2) accounts insured against loss of principal by an agency or instrumentality of the United States government; (3) bonds in which savings banks in this state may, by law, invest; (4) bonds of the United States or any agency thereof or of this state or any municipality of this state; (5) insurance contracts with an insurance company licensed by the state of Connecticut to offer such contracts and maintaining not less than a B plus rating for financial security by A.M. Best at the time the assets are invested in the insurance contract; or (6) any other deposit account or security of a quality, safety and expense comparable to those set forth in this subsection.
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68	68	(d) All interest, dividends and other income earned on the amounts deposited in an escrow account pursuant to this section shall be retained in such escrow account and credited, less any taxes and administration expenses, to the respective interests of those persons for whose benefit the escrow account is maintained. Amounts in an escrow account shall be removed from such account only as provided in sections 42-200 to 42-206, inclusive, as amended by this act. Each party to a funeral service contract shall receive an annual statement of the amount credited to such party's escrow account. Such statement shall include the name and address of the escrow agent.
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70	70	(e) If a purchaser of funeral services, property or merchandise defaults in making payments required under the terms of such contract, or if the purchaser or the person responsible for making funeral arrangements for a deceased beneficiary fails to have the funeral service establishment provide services, the funeral service establishment may retain any origination fee specified in the funeral service contract and any costs actually and reasonably incurred by such establishment, and which costs are provided for in the general price list maintained by such establishment, in the performance of the contract as liquidated damages, provided the sum of the amount retained as an origination fee [and the amount retained to pay for costs incurred by the funeral establishment in the performance of the contract] shall not exceed an amount equal to five per cent of the amount in the escrow account at the time the purchaser of funeral services defaults in making such payments. The balance of any amount remaining in the escrow account for a revocable funeral service contract shall be paid to such purchaser upon request.
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72	72	(f) A person, firm or corporation licensed in accordance with the provisions of chapter 385 which enters into a funeral service contract shall furnish the agent of an escrow account established in accordance with the provisions of this section with the name of the purchaser of such services, property or merchandise, the address and name of the beneficiary of the funeral service contract and the amount contracted for, together with a copy of the contract listing the services, personal property or merchandise to be furnished by the funeral service establishment. Nothing in this section shall prohibit the commingling within an escrow account of the money or securities received under more than one funeral service contract for the purpose of management and investment of funds in such escrow account.
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74	74	(g) A funeral service contract shall provide that, if the particular merchandise provided for in the contract is not available at the time of death, the funeral service establishment shall furnish merchandise similar in style and at least equal in quality of material and workmanship to the merchandise provided for in the contract.
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76	76	Sec. 3. Section 42-204 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2011):
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78	78	The legal representative of the decedent or a person who has entered into a funeral service contract with a funeral service establishment, upon written notice to such establishment and to the escrow agent and subject to the provisions of section 17b-91, may cancel any revocable funeral service contract prior to the performance by such establishment. In the event of such a cancellation, all money in the escrow account paid by such person, together with all accrued income, less costs actually and reasonably incurred by the funeral service establishment in the performance of such contract, shall be returned to such person. An irrevocable funeral service contract established pursuant to the provisions of section 42-207, as amended by this act, shall not be cancelled but may be transferred to another licensed funeral establishment pursuant to the provisions of this chapter.
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80	80	Sec. 4. Section 42-207 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2011):
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82	82	An irrevocable funeral service contract may be entered into in which the amount held in escrow or to be paid by a life insurance contract may be disbursed only upon the death of the beneficiary, provided that in the case of a funeral service contract which is funded with money or securities placed in escrow, such a contract does not exceed five thousand four hundred dollars and all interest accumulates to the escrow account and is inaccessible to the beneficiary or purchaser of such contract. The assignment of an existing life insurance contract to fund an irrevocable funeral service contract with a cash value in excess of five thousand four hundred dollars is permitted, provided if the beneficiary of the irrevocable funeral service contract is a Medicaid beneficiary at the time of their death, then any amount greater than five thousand four hundred dollars paid by reason of the death of the insured shall be remitted within thirty days of receipt by the funeral home to the state Treasurer and, if the beneficiary of the funeral service contract is not a Medicaid beneficiary at the time of their death, then any amount greater than five thousand four hundred dollars paid by reason of the death of the insured shall be remitted within thirty days of receipt to the estate of the beneficiary of the funeral service contract. Such irrevocable funeral service contracts may be transferred from one funeral service establishment to another upon request of the [beneficiary] purchaser or upon the request of the person in charge of making funeral or burial arrangements for the beneficiary. The purchase of an irrevocable funeral service contract shall not preclude an individual from purchasing other funeral service contracts that are revocable, provided any such revocable funeral service contract purchased by a Medicaid beneficiary may be revoked only upon written notice by the Medicaid beneficiary to the Commissioner of Social Services.
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87	87	This act shall take effect as follows and shall amend the following sections:
88	88	Section 1 October 1, 2011 42-200
89	89	Sec. 2 October 1, 2011 42-202
90	90	Sec. 3 October 1, 2011 42-204
91	91	Sec. 4 October 1, 2011 42-207
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93	93	This act shall take effect as follows and shall amend the following sections:
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95	95	Section 1
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97	97	October 1, 2011
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99	99	42-200
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101	101	Sec. 2
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103	103	October 1, 2011
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105	105	42-202
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107	107	Sec. 3
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109	109	October 1, 2011
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111	111	42-204
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113	113	Sec. 4
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115	115	October 1, 2011
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117	117	42-207
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119	119	Statement of Purpose:
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121	121	To allow the funding of prearranged funeral service contracts through the assignment of life insurance policies.
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123	123	[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]