Oklahoma 2023 Regular Session

Oklahoma Senate Bill SB555 Compare Versions

Version 1 (Old)

Version 2 (New)

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29		-	SENATE FLOOR VERSION
30		-	February 14, 2023
	28	+	STATE OF OKLAHOMA
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	30	+	1st Session of the 59th Legislature (2023)
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33	32		COMMITTEE SUBSTITUTE
34	33		FOR
35		-	SENATE BILL ~~NO.~~ 555 By: Montgomery of the Senate
	34	+	SENATE BILL 555 By: Montgomery of the Senate
36	35
37	36		and
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39	38		Sneed of the House
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	44	+	COMMITTEE SUBSTITUTE
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45	46		An Act relating to prepaid funeral services; amending
46	47		36 O.S. 2021, Sections 6121, 6124, 6124.1, 6124.2,
47	48		6125.2, 6128, and 6130, which relate to permits,
48	49		payment for benefits, transfer of ownership, funding
49	50		of contracts, annual reporting, and penal ties;
50	51		requiring contract for all prepaid funeral services;
51	52		providing method for filing certain applications;
52	53		allowing certain fees to be levied by the Insurance
53	54		Commissioner; modifying permit expiration and renewal
54	55		provisions; requiring certain report for certain
55	56		expired permit holders upon reapplication;
56	57		prohibiting contracts funded by trust; stating
57	58		exemption; requiring timely response by permit hold er
58	59		to Insurance Commissioner upon certain inquiry;
59	60		requiring update of information by electronic means
60	61		by certain date; establishing certain fine; modifying
61	62		change of name application for certain permit holder;
62	63		prohibiting permit holder from operating under name
63	64		other than name on application; providing for funding
64	65		of certain contracts; modifying penalties assessed;
65	66		updating statutory references ; updating statutory
66	67		language; making language gender neutral; and
67	68		providing an effective date .
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73	72		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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101	99		SECTION 1. AMENDATORY 36 O.S. 2021, Section 6121, is
102	100		amended to read as follows:
103	101		Section 6121. A. Any individual, firm, par tnership,
104	102		corporation, or association (hereinafter called “organization”)
105	103		which shall accept money or anything of value issues contracts for
106	104		prearranged, or prepaid funeral services, or funeral service
107	105		merchandise as defined i n the Funeral Services Licensi ng Act or for
108	106		any contract providing future funeral service s or funeral
109	107		merchandise at a fixed price or at a cost plus a p ercentage, or at
110	108		retail price less a percentage discount, or providing for any
111	109		special consideration of any kind to be granted or made available to
112	110		the purchaser or holder of such contract, in this state, under any
113	111		sales contract, bond, certificate or othe r form of written document
114	112		providing for prepaid, discounted or otherwise specially priced
115	113		funeral or burial benefits or services or f uneral merchandise to be
116	114		delivered at an undetermined futur e date dependent upon the dea th of
117	115		a contracting party or other person designated by a contracting
118	116		party (hereinafter calle d “prepaid funeral benefits ”) shall first
119	117		obtain a permit from the Insuran ce Commissioner authorizing the
120	118		transaction of this type of business before entering int o any such
121	119		contract. It shall be unlawful to sell issue contracts for prepaid
122	120		funeral benefits unless the seller holds a valid, current p ermit at
123	121		the time the contract is made.
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151	148		B. The Insurance Commissioner may deny the issua nce of a permit
152	149		if the organization:
153	150		1. Makes a material misst atement or misrepresentation in an
154	151		application for a permit;
155	152		2. Fraudulently or deceptively obtains or attempts to obtain a
156	153		permit for another; or
157	154		3. If any of its officers, owners, partners, or directors are
158	155		determined by the Commissioner to not be comp etent, trustworthy,
159	156		financially responsible, and of good personal and business
160	157		reputation and character.
161	158		C. The Insurance Commissione r may approve an application of an
162	159		organization for a permi t and deny the request of the organization
163	160		to act as a trustor if the organization does not satisfy all
164	161		qualifications. This shall not hinder an organization from ent ering
165	162		into contracts funded by assignments of insurance.
166	163		D. All permits issued pursuant to the provisions of this
167	164		section shall be displayed in a consp icuous place at all times on
168	165		the premises of the organization. No organization may consent to,
169	166		or allow the use or display of, the pe rmit by a person other than
170	167		the persons authorized to repre sent the organization in cont racting
171	168		prepaid funeral benefits.
172	169		E. The organization shall not be entitled to enforce a contract
173	170		made in violation of the act, but the p urchaser or the heirs of the
174	171		purchaser, or legal representative, shall be entitled to rec over
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202	198		triple the amounts paid to the organization with interest thereon at
203	199		the rate of six percent (6%) per annum under any contract made in
204	200		violation hereof.
205	201		SECTION 2. AMENDATORY 36 O.S. 2021, Section 6124, is
206	202		amended to read as follows:
207	203		Section 6124. A. Each organization desiring to accept money or
208	204		anything of value for prepaid funeral benefits or an agreement issue
209	205		contracts to provide funeral benefits in the future at a fixed or
210	206		predetermined cost, shall electronically file an application for a
211	207		permit with the Insurance Commissioner in the manner and form
212	208		prescribed by the Commi ssioner, and shall at the time of filing an
213	209		application pay one initial filing fee of Fifty Dollars ($50.00) and
214	210		any other transaction or related fees deemed necessary by the
215	211		Commissioner. The Insurance Commission er shall issue a permit upon:
216	212		1. The receipt of the application and payment of the filing
217	213		fee;
218	214		2. Determination that the organizatio n is in good standing as a
219	215		funeral establishment with the O klahoma Funeral Board; and
220	216		3. Making a finding that the organi zation has complied with the
221	217		provisions of this act and the rules promulgated under this act
222	218		pursuant to Section 6121 et seq. of this title by the Insurance
223	219		Commissioner. All applications shall be signed by the organization
224	220		requesting the permit, and shall contain a statement that the
225	221		organization will comply with all the requirements as established by
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253	248		this act Section 6121 et seq. of this title. All permits shall
254	249		expire annually on December 31 of the year the permit is first
255	250		issued April 30, unless renewed; per mits may be renewed for a per iod
256	251		not to exceed the succeeding December 31 April 30 upon the payment
257	252		of a renewal fee of Fifty Dollars ($50.00). Late application for
258	253		renewal of a permit shall requi re a fee of double the renewal fee.
259	254		No application for ren ewal of a permit shall be acc epted after
260	255		January 31 of each yea r. The Insurance Commissioner may authorize
261	256		acceptance of a new permit application pursuant to this section
262	257		prior to the expiration o f the one-year period upon good cause shown
263	258		The renewal application shall be filed, and the fee shall be paid
264	259		electronically in a form and manner prescribed by the Commissioner.
265	260		A permit that expires for failu re to submit a renewal a pplication
266	261		may be reinstated within ninety (90) days after the expiration date
267	262		following the submission and pa yment of a renewal application,
268	263		renewal fee, and any other fees deemed necessary by the
269	264		Commissioner. The renewal fee for a permit that expires for failure
270	265		to submit a renewal application shall be double the renewal fee for
271	266		a timely renewal application. The Insurance Commissioner shall
272	267		require a permit holder whose permit has been expired for more than
273	268		ninety (90) days to reapply as if a new applicant and pay an
274	269		application fee that is double the renewal fee for a timely renewal
275	270		application and any other fees deemed necessary by the Commissioner.
276	271		An application submitted after the permit has been expired for more
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304	298		than ninety (90) days shall include a de tailed report of services
305	299		provided in this state during the period of expired permit.
306	300		B. The Insurance Commissioner may cancel a permit o r refuse to
307	301		issue a permit or refu se to issue a renewal of a permit for failure
308	302		to comply with any provision of this act Section 6121 et seq. of
309	303		this title, or any valid rule, which the Insurance Commissioner has
310	304		promulgated, after reasonable notice to the organization and after
311	305		hearing if the organization requests a hearing. When the Insurance
312	306		Commissioner cancels a permit or refuses to issue a renewal of a
313	307		permit for a violation as provided by this subsection, the Insurance
314	308		Commissioner shall notify the O klahoma Funeral Board of the acti on
315	309		and the nature of any violations.
316	310		C. No organization shall be entitled to a new permit for a
317	311		period of one (1) year after cancellat ion or refusal by the
318	312		Insurance Commissioner to issue or re new the permit of the
319	313		organization, but shall thereafter be en titled to a new permit upon
320	314		satisfactory proof of compliance with this law after the expiration
321	315		of the one-year period.
322	316		D. Any person or organization aggrieved by the actions of the
323	317		Insurance Commissioner may appeal theref rom as provided by Article
324	318		II of the Administrative Procedures Act.
325	319		E. On and after the effective date of this act, no organization
326	320		shall issue a contract for prepaid benefits funded by a trust
327	321		account. An organization may co ntinue to operate and fund a trust
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355	348		established prior to the ef fective date of this act for existing
356	349		contract holders.
357	350		F. Every permit holder , upon receipt of any inquiry from the
358	351		Commissioner, shall furnish the Commissioner with an adequate
359	352		response to the inquiry within twenty (20) days from the date that
360	353		the inquiry is received.
361	354		G. Each permit holder shall electronically notify the
362	355		Commissioner of and pay any fees deemed necessary by the
363	356		Commissioner for any change in address or contact information within
364	357		thirty (30) days of the change. Submission and payment shall be
365	358		completed in the form and manner prescribed by the Commission er.
366	359		Any submission of a change of legal b usiness name, “doing business
367	360		as” or assumed name, address, or contract email address received
368	361		more than thirty (30) days after the change occurred shall be
369	362		accompanied by a fee of Fifty Dollars ($50.00).
370	363		SECTION 3. AMENDATORY 36 O.S. 2021 , Section 6124.1, is
371	364		amended to read as follows:
372	365		Section 6124.1. A. No prepaid funeral benefit permit sha ll be
373	366		transferable from one organization to another except as provided in
374	367		this section. The selling organization shall notify t he Insurance
375	368		Commissioner at least forty -five (45) days prior to transfer of
376	369		ownership. Notification shall be in a form provide d by the
377	370		Insurance Commissioner and shall contain at a minimum the following
378	371		information:
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406	398		1. The name of the acquiring organiza tion;
407	399		2. The date the acquiring organiz ation will take control of the
408	400		funeral establishment;
409	401		3. A listing of all unrealized pr epaid funeral benefit
410	402		contracts funded by insurance assignments;
411	403		4. A listing of all unrealized prepaid funeral benefit
412	404		contracts funded by trusts;
413	405		5. A detailed description of existing trusts to include, but
414	406		not be limited to, the name of the contract h older and the trust
415	407		value per contract; and
416	408		6. Any other information the Insurance Commissioner may
417	409		request.
418	410		B. The Insurance Commissioner may waive the notice requir ement
419	411		provided for in subsection A of this section upon good c ause shown.
420	412		C. The acquiring organization shall make application for a
421	413		permit at least thirty (30) days prior to the transfer of ownership.
422	414		Approval is contingent upon the organization receivi ng an
423	415		establishment license as provided for in Sections 395.1 through
424	416		396.33 of Title 59 of the Oklahoma Statutes. The application shall
425	417		include an assumption agreement executed by the acquiring
426	418		organization in a fo rm provided by the Insurance Commissione r.
427	419		D. The acquiring organization shall be issued a prepaid fu neral
428	420		benefit permit prior to the relinquishment of control of the trust
429	421		by the selling organization. The acquiring organization shall not
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457	448		access funds held in the trust until authorization has been given by
458	449		the Insurance Commissioner.
459	450		E. Upon good cause shown, the Insurance Comm issioner may deny
460	451		transfer of the trust from the selling organization to the acquiring
461	452		organization.
462	453		F. The Insurance Commissio ner may assume the role of acting
463	454		trust conservator as a means of safeguarding the rights and
464	455		interests of the individual contra ct holder. The organization may
465	456		make application to the Insurance Commissioner to draw down funds
466	457		upon fulfillment of the prepa id funeral service contract.
467	458		G. Whenever a prepaid funeral benefit permit holder refuses to
468	459		submit the books, records, papers a nd instruments of the prepaid
469	460		funeral benefit contracts to the examination and inspection of the
470	461		assistants or examiners of the Insurance Commissioner, or refuses or
471	462		neglects to establish or maintain a prepaid funeral benefit perm it
472	463		in accordance with the requirements of the Prepaid Funeral Benefits
473	464		Act Section 6121 et seq. of this title within ninety (90) days after
474	465		a written demand to establish or maintain a prepa id funeral benefit
475	466		permit is made by the Commissioner, or in any manner obstructs or
476	467		interferes with the examination of its prepaid funeral benefit
477	468		contracts or refuses to be examined on oath concerning any of the
478	469		affairs of its prepaid funeral benefit con tracts, the Commissioner
479	470		may make application for receivership in the manner of a domestic
480	471		insurer pursuant to Sections 1901 through 1920 of this title, in
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508	498		addition to the applicable penalties and enforcement provisions of
509	499		this act.
510	500		H. The Insurance Commissioner may prescribe rules concerning
511	501		matters incidental to this section.
512	502		SECTION 4. AMENDATORY 36 O.S. 2021, Section 6124.2, is
513	503		amended to read as follows:
514	504		Section 6124.2. A. No prepaid funeral benefit permit holder
515	505		shall change the name under which the permit holde r operates except
516	506		as provided in this section. The prepaid funeral benefit permit
517	507		holder shall obtain approval from the Insurance Commissioner at
518	508		least thirty (30) days prior to changing the name of the permit
519	509		holder. The application for change of name o f a prepaid funeral
520	510		benefit permit holder shall be filed electronically in a the manner
521	511		and form provided by the Insurance Commissioner, along with any
522	512		applicable fees, within thirty (30) days of the legal change and
523	513		shall contain, at a minimum, the following information:
524	514		1. The name of the permit holder;
525	515		2. The proposed new name of t he permit holder; and
526	516		3. The date the name change will become effective;
527	517		4. The business address of the permit holder; and
528	518		5. The permit holder’s primary email address.
529	519		B. The Insurance Commissioner may waive the approval
530	520		requirement provided for in subsection A of this section upon good
531	521		cause shown.
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559	548		C. The Insurance Commissioner may deny the change of name of
560	549		the prepaid funeral benefit permit holder upon good cause shown.
561	550		D. C. Upon approval of a change of name Unless the change of
562	551		name is denied, the Insurance Commissioner shall issue a prepaid
563	552		funeral benefit permit with the new name. The prepaid funeral
564	553		benefit permit holder shall display in a conspicuous place at all
565	554		times on the premises of the organization all permits issued
566	555		pursuant to the provisions of this section. No organization may
567	556		consent to or allow the use or display of the permit by a person
568	557		other than the persons authorized to represent the organization in
569	558		contracting prepaid funeral benefits.
570	559		E. D. The Insurance Commissioner may prescribe promulgate rules
571	560		concerning matters incidental to this section.
572	561		E. Permit holders shall not conduct business under any name or
573	562		at a different business address other than that specified in the
574	563		permit.
575	564		SECTION 5. AMENDATORY 36 O.S. 2021, Section 6125.2, is
576	565		amended to read as follows:
577	566		Section 6125.2. A. Contracts All contracts for prepaid funeral
578	567		benefits provided for pursuant to Section 6125 of this title may
579	568		issued on and after the effective date of this ac t shall be funded
580	569		by assignments of life insurance proceeds to the contracting
581	570		organization either:
582	571		1. A standard life or accident insurance policy; or
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609	597
610	598		2. An individual or group fi xed annuity.
611	599		B. A guaranteed contract for prepaid funeral benefits provided
612	600		for pursuant to paragraph 1 of subsection B of S ection 6125 of this
613	601		title which is to be funded by assignment o f life insurance proceeds
614	602		issued on and after the effective date of this act shall provide
615	603		that:
616	604		1. The contract be funded by a life an insurance policy or
617	605		annuity issued in the face amount of the current purchase price of
618	606		the contract for prepaid funeral benefits;
619	607		2. All accrued benefits under the insurance policy or annuity
620	608		shall become available for disbursement to the organization upon the
621	609		death of the beneficiary of the prepaid funeral co ntract;
622	610		3. The beneficiary shall be t he same individual under the
623	611		contract as the insured under the life insurance policy or annuity;
624	612		and
625	613		4. The disbursement of life the insurance policy or annuity
626	614		proceeds to the organ ization shall constitute payment in full to the
627	615		organization for which the services and merchandise are contracted
628	616		for.
629	617		C. A nonspecified contract for prepaid funeral bene fits
630	618		provided for pursuant to paragraph 2 of subsection B of Section 6125
631	619		of this title which is to be funded by assign ment of life insurance
632	620		proceeds issued on or after the effective da te of this act shall
633	621		provide that:
634	622
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660	647
661	648		1. The total proceeds paid to the organization under the
662	649		insurance policy or annuity shall not exceed the actual retai l cost
663	650		of the funeral services and merchandise at the time of delivery;
664	651		2. Any funds remaining unused shall be refunded to the
665	652		purchaser or to the pers onal representative of the purchaser or
666	653		designated beneficiary; and
667	654		3. After November 1, 2009, all pric e lists reflecting the
668	655		actual retail cost of funeral services and merchan dise used at the
669	656		time of the delivery of services shall be retained for a perio d of
670	657		at least six (6) years.
671	658		D. A violation of this section shall constitute a misdemeanor
672	659		and shall be punished by a fine of not less than One Hundred Dollars
673	660		($100.00) nor more than Five Hundred Dollars ($500.00) or by
674	661		imprisonment in the county jail fo r not less than one (1) month nor
675	662		more than six (6) months, or by both such fine and imprisonment.
676	663		SECTION 6. AMENDATORY 36 O.S. 2021, Section 6128, is
677	664		amended to read as follows:
678	665		Section 6128. Each organization shall electronically file an
679	666		annual report with the Insurance Commissioner on or before March 15
680	667		of each year in such for m and manner as the Insurance Commi ssioner
681	668		may require, showing the names and addresses of all pers ons with
682	669		whom contracts for prepaid funeral benefits have been made prior to
683	670		December 31 of the preceding year which had not been fully
684	671		discharged on Decembe r 31 and, also showing the date of the
685	672
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711	697
712	698		contract, the name of the bank or depository holding the tru st fund
713	699		and the amount of the trust fund under each contract on the
714	700		preceding December 31. Any organization which has discontinued the
715	701		sale of prepaid funer al benefits, but which still has ou tstanding
716	702		contracts, shall not be required to obtain a renewal o f its permit,
717	703		but it shall continue to make annual reports to the Insuran ce
718	704		Commissioner until all such contracts have been fully discharged. A
719	705		filing fee of Fifty Dollars ($50.00) shall acco mpany each report.
720	706		The Commissioner may assess any a dditional fees as deemed necessary
721	707		pursuant to this act. If any officer of any orga nization fails or
722	708		refuses to file an annual report, or to cause it to be filed withi n
723	709		thirty (30) days after he or she has been notified by the Insurance
724	710		Commissioner that the report is due and has not been recei ved, he or
725	711		she shall be guilty of a misdemeanor and shall be punished as
726	712		prescribed in Section 6130 of this title.
727	713		SECTION 7. AMENDATORY 36 O.S. 2021, Section 6 130, is
728	714		amended to read as follows:
729	715		Section 6130. A. Any officer, director, agent, or empl oyee of
730	716		any organization subject to the terms of Sections 6121 through
731	717		6136.18 of this title who makes or attempts to make any contract in
732	718		violation of the provisions of Section s 6121 through 6136.18 of this
733	719		title, or who refuses to a llow an inspection of the records of the
734	720		organization, or who violates any other provision o f Sections 6121
735	721		through 6136.18 of this title, upon conviction, shall b e guilty of a
736	722
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762	747
763	748		felony and shall be pu nished by imprisonment in th e custody of the
764	749		Department of Corrections for a term of not more than ten (10)
765	750		years, and a fine not exceeding Ten Thous and Dollars ($10,000.00),
766	751		and ordered to pay restitution to the victim. Each violation of any
767	752		provision of Sections 6121 through 6136.18 of this title shall be
768	753		deemed a separate offense and prosecuted individually.
769	754		B. The violation of any provision of Se ctions 6121 through
770	755		6136.18 of this title shall constitute a cause for the Oklahoma
771	756		Funeral Board to revoke, or to refuse to issue or r enew, any license
772	757		issued pursuant to the provisions of Sections 396 through 396.33 of
773	758		Title 59 of the Oklahoma Statutes. The violation of any provision
774	759		of Sections 6121 through 6136.18 of this title shall constitute a
775	760		cause for the Insurance Commissioner to issue a notice and order t o
776	761		show cause why the l icensee shall not be censured, have the license
777	762		of the licensee suspended or revoked, be subject to , after
778	763		opportunity for hearing, censure, suspend, revoke, or refuse to
779	764		renew a permit, issue a fine of not less than One Hundred Dollar s
780	765		($100.00) and not more than One Thousand Dollars ($1,000.00), or be
781	766		subject to both such f ine and punishment any combination thereof.
782	767		SECTION 8. This act shall become effective November 1, 2023.
783		-	~~COMMITTEE REPORT BY: COMMITTEE ON RETIREMENT AND INSURANCE~~
784		-	~~February~~ 14, 2023 ~~- DO PASS AS AMENDED BY CS~~
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