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SENATE FLOOR VERSION
February 14, 2023
COMMITTEE SUBSTITUTE
FOR
SENATE BILL NO. 555 By: Montgomery of the Senate
and
Sneed of the House
An Act relating to prepaid funeral services; amending
36 O.S. 2021, Sections 6121, 6124, 6124.1, 6124.2,
6125.2, 6128, and 6130, which relate to permits,
payment for benefits, transfer of ownership, funding
of contracts, annual reporting, and penal ties;
requiring contract for all prepaid funeral services;
providing method for filing certain applications;
allowing certain fees to be levied by the Insurance
Commissioner; modifying permit expiration and renewal
provisions; requiring certain report for certain
expired permit holders upon reapplication;
prohibiting contracts funded by trust; stating
exemption; requiring timely response by permit hold er
to Insurance Commissioner upon certain inquiry;
requiring update of information by electronic means
by certain date; establishing certain fine; modifying
change of name application for certain permit holder;
prohibiting permit holder from operating under name
other than name on application; providing for funding
of certain contracts; modifying penalties assessed;
updating statutory references ; updating statutory
language; making language gender neutral; and
providing an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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SECTION 1. AMENDATORY 36 O.S. 2021, Section 6121, is
amended to read as follows:
Section 6121. A. Any individual, firm, par tnership,
corporation, or association (hereinafter called “organization”)
which shall accept money or anything of value issues contracts for
prearranged, or prepaid funeral services, or funeral service
merchandise as defined i n the Funeral Services Licensi ng Act or for
any contract providing future funeral service s or funeral
merchandise at a fixed price or at a cost plus a p ercentage, or at
retail price less a percentage discount, or providing for any
special consideration of any kind to be granted or made available to
the purchaser or holder of such contract, in this state, under any
sales contract, bond, certificate or othe r form of written document
providing for prepaid, discounted or otherwise specially priced
funeral or burial benefits or services or f uneral merchandise to be
delivered at an undetermined futur e date dependent upon the dea th of
a contracting party or other person designated by a contracting
party (hereinafter calle d “prepaid funeral benefits ”) shall first
obtain a permit from the Insuran ce Commissioner authorizing the
transaction of this type of business before entering int o any such
contract. It shall be unlawful to sell issue contracts for prepaid
funeral benefits unless the seller holds a valid, current p ermit at
the time the contract is made.
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B. The Insurance Commissioner may deny the issua nce of a permit
if the organization:
1. Makes a material misst atement or misrepresentation in an
application for a permit;
2. Fraudulently or deceptively obtains or attempts to obtain a
permit for another; or
3. If any of its officers, owners, partners, or directors are
determined by the Commissioner to not be comp etent, trustworthy,
financially responsible, and of good personal and business
reputation and character.
C. The Insurance Commissione r may approve an application of an
organization for a permi t and deny the request of the organization
to act as a trustor if the organization does not satisfy all
qualifications. This shall not hinder an organization from ent ering
into contracts funded by assignments of insurance.
D. All permits issued pursuant to the provisions of this
section shall be displayed in a consp icuous place at all times on
the premises of the organization. No organization may consent to,
or allow the use or display of, the pe rmit by a person other than
the persons authorized to repre sent the organization in cont racting
prepaid funeral benefits.
E. The organization shall not be entitled to enforce a contract
made in violation of the act, but the p urchaser or the heirs of the
purchaser, or legal representative, shall be entitled to rec over
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triple the amounts paid to the organization with interest thereon at
the rate of six percent (6%) per annum under any contract made in
violation hereof.
SECTION 2. AMENDATORY 36 O.S. 2021, Section 6124, is
amended to read as follows:
Section 6124. A. Each organization desiring to accept money or
anything of value for prepaid funeral benefits or an agreement issue
contracts to provide funeral benefits in the future at a fixed or
predetermined cost, shall electronically file an application for a
permit with the Insurance Commissioner in the manner and form
prescribed by the Commi ssioner, and shall at the time of filing an
application pay one initial filing fee of Fifty Dollars ($50.00) and
any other transaction or related fees deemed necessary by the
Commissioner. The Insurance Commission er shall issue a permit upon:
1. The receipt of the application and payment of the filing
fee;
2. Determination that the organizatio n is in good standing as a
funeral establishment with the O klahoma Funeral Board; and
3. Making a finding that the organi zation has complied with the
provisions of this act and the rules promulgated under this act
pursuant to Section 6121 et seq. of this title by the Insurance
Commissioner. All applications shall be signed by the organization
requesting the permit, and shall contain a statement that the
organization will comply with all the requirements as established by
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this act Section 6121 et seq. of this title. All permits shall
expire annually on December 31 of the year the permit is first
issued April 30, unless renewed; per mits may be renewed for a per iod
not to exceed the succeeding December 31 April 30 upon the payment
of a renewal fee of Fifty Dollars ($50. 00). Late application for
renewal of a permit shall requi re a fee of double the renewal fee.
No application for ren ewal of a permit shall be acc epted after
January 31 of each yea r. The Insurance Commissioner may authorize
acceptance of a new permit appl ication pursuant to this section
prior to the expiration o f the one-year period upon good cause shown
The renewal application shall be filed, and the fee shall be paid
electronically in a form and manner prescribed by the Commissioner.
A permit that expires for failure to submit a renewal application
may be reinstated within ninety (90) days after the expiration date
following the submission and pa yment of a renewal application,
renewal fee, and any other fees deemed necessary by the
Commissioner. The ren ewal fee for a permit that expires for failure
to submit a renewal application shall be double the renewal fee for
a timely renewal application. The Insurance Commissioner shall
require a permit holder whose permit has been expired for more than
ninety (90) days to reapply as if a new applicant and pay an
application fee that is double the renewal fee for a timely renewal
application and any other fees deemed necessary by the Commissioner.
An application submitted after the permit has been expired for more
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than ninety (90) days shall include a de tailed report of services
provided in this state during the period of expired permit.
B. The Insurance Commissioner may cancel a permit o r refuse to
issue a permit or refu se to issue a renewal of a permit for fail ure
to comply with any provision of this act Section 6121 et seq. of
this title, or any valid rule, which the Insurance Commissioner has
promulgated, after reasonable notice to the organization and after
hearing if the organization requests a hearing. Whe n the Insurance
Commissioner cancels a permit or refuses to issue a renewal of a
permit for a violation as provided by this subsection, the Insurance
Commissioner shall notify the O klahoma Funeral Board of the acti on
and the nature of any violations.
C. No organization shall be entitled to a new permit for a
period of one (1) year after cancellat ion or refusal by the
Insurance Commissioner to issue or re new the permit of the
organization, but shall thereafter be en titled to a new permit upon
satisfactory proof of compliance with this law after the expiration
of the one-year period.
D. Any person or organization aggrieved by the actions of the
Insurance Commissioner may appeal theref rom as provided by Article
II of the Administrative Procedures Act.
E. On and after the effective date of this act, no organization
shall issue a contract for prepaid benefits funded by a trust
account. An organization may co ntinue to operate and fund a trust
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established prior to the ef fective date of this act for existing
contract holders.
F. Every permit holder, upon receipt of any inquiry from the
Commissioner, shall furnish the Commissioner with an adequate
response to the inquiry within twenty (20) days from the date that
the inquiry is received.
G. Each permit holder sha ll electronically notify the
Commissioner of and pay any fees deemed necessary by the
Commissioner for any change in address or contact information within
thirty (30) days of the change. Submission and payment shall be
completed in the form and manner pre scribed by the Commissioner.
Any submission of a change of legal b usiness name, “doing business
as” or assumed name, address, or contract email address received
more than thirty (30) days after the change occurred shall be
accompanied by a fee of Fifty Dollars ($50.00).
SECTION 3. AMENDATORY 36 O.S. 2021 , Section 6124.1, is
amended to read as follows:
Section 6124.1. A. No prepaid funeral benefit permit sha ll be
transferable from one organization to another except as provided in
this section. The selling organization shall notify t he Insurance
Commissioner at least forty -five (45) days prior to transfer of
ownership. Notification shall be in a form provide d by the
Insurance Commissioner and shall contain at a minimum the follow ing
information:
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1. The name of the acquiring organiza tion;
2. The date the acquiring organiz ation will take control of the
funeral establishment;
3. A listing of all unrealized pr epaid funeral benefit
contracts funded by insurance assignments;
4. A listing of all unrealized prepaid funeral benefit
contracts funded by trusts;
5. A detailed description of existing trusts to include, but
not be limited to, the name of the contract h older and the trust
value per contract; and
6. Any other information the Insurance Commissioner may
request.
B. The Insurance Commissioner may waive the notice requir ement
provided for in subsection A of this section upon good c ause shown.
C. The acquiring organization shall make application for a
permit at least thirty (30) days prior to the transfer of ownership.
Approval is contingent upon the organization receivi ng an
establishment license as provided for in Sections 395.1 through
396.33 of Title 59 of the Oklahoma Statutes. The application shall
include an assumption a greement executed by the acquiring
organization in a fo rm provided by the Insurance Commissione r.
D. The acquiring organization shall be issued a prepaid fu neral
benefit permit prior to the relinquishment of control of the trust
by the selling organizatio n. The acquiring organization shall not
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access funds held in the trust until authorization has been given by
the Insurance Commissioner.
E. Upon good cause shown, the Insurance Comm issioner may deny
transfer of the trust from the selling organization to the acquiring
organization.
F. The Insurance Commissio ner may assume the role of acting
trust conservator as a means of safeguarding the rights and
interests of the individual contra ct holder. The organization may
make application to the Insurance Commis sioner to draw down funds
upon fulfillment of the prepa id funeral service contract.
G. Whenever a prepaid funeral benefit permit holder refuses to
submit the books, records, papers a nd instruments of the prepaid
funeral benefit contracts to the examinatio n and inspection of the
assistants or examiners of the Insurance Commissioner, or refuses or
neglects to establish or maintain a prepaid funeral benefit perm it
in accordance with the requirements of the Prepaid Funeral Benefits
Act Section 6121 et seq. of this title within ninety (90) days after
a written demand to establish or maintain a prepa id funeral benefit
permit is made by the Commissioner, or in any manner obstructs or
interferes with the examination of its prepaid funeral benefit
contracts or refuses to be examined on oath concerning any of the
affairs of its prepaid funeral benefit con tracts, the Commissioner
may make application for receivership in the manner of a domestic
insurer pursuant to Sections 1901 through 1920 of this title, in
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addition to the applicable penalties and enforcement provisions of
this act.
H. The Insurance Commissioner may prescribe rules concerning
matters incidental to this section.
SECTION 4. AMENDATORY 36 O.S. 2021, Section 6124.2, is
amended to read as follows:
Section 6124.2. A. No prepaid funeral benefit permit holder
shall change the name under which the permit holde r operates except
as provided in this section. The prepaid funeral benefit permit
holder shall obtain approval from the Insurance Commissioner at
least thirty (30) days prior to changing the name of the permit
holder. The application for change of name o f a prepaid funeral
benefit permit holder shall be filed electronically in a the manner
and form provided by the Insurance Commissioner, along with any
applicable fees, within thirty (30) days of the legal change and
shall contain, at a minimum, the following information:
1. The name of the permit holder;
2. The proposed new name of t he permit holder; and
3. The date the name change will become effective;
4. The business address of the permit holder; and
5. The permit holder’s primary email address.
B. The Insurance Commissioner may waive the approval
requirement provided for in subsection A of this section upon good
cause shown.
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C. The Insurance Commissioner may deny the change of name of
the prepaid funeral benefit permit holder upon good cause shown.
D. C. Upon approval of a change of name Unless the change of
name is denied, the Insurance Commissioner shall issue a prepaid
funeral benefit permit with the new name. The prepaid funeral
benefit permit holder shall display in a conspicuous place at all
times on the premises of the organization all permits issued
pursuant to the provisions of this section. No organization may
consent to or allow the use or display of the permit by a person
other than the persons authorized to represent the organization in
contracting prepaid funeral benefits.
E. D. The Insurance Commissioner may prescribe promulgate rules
concerning matters incidental to this section.
E. Permit holders shall not conduct business under any name or
at a different business address other than that specified in the
permit.
SECTION 5. AMENDATORY 36 O.S. 2021, Section 6125.2, is
amended to read as follows:
Section 6125.2. A. Contracts All contracts for prepaid funeral
benefits provided for pursuant to Section 6125 of this title may
issued on and after the effective date of this ac t shall be funded
by assignments of life insurance proceeds to the contracting
organization either:
1. A standard life or accident insurance policy; or
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2. An individual or group fi xed annuity.
B. A guaranteed contract for prepaid funeral benefits provided
for pursuant to paragraph 1 of subsection B of S ection 6125 of this
title which is to be funded by assignment o f life insurance proceeds
issued on and after the effective date of this act shall provide
that:
1. The contract be funded by a life an insurance policy or
annuity issued in the face amount of the current purchase price of
the contract for prepaid funeral benefits;
2. All accrued benefits under the insurance policy or annuity
shall become available for disbursement to the organization upon the
death of the beneficiary of the prepaid funeral co ntract;
3. The beneficiary shall be the same individual under the
contract as the insured under the life insurance policy or annuity;
and
4. The disbursement of life the insurance policy or annuity
proceeds to the organ ization shall constitute payment in full to the
organization for which the services and merchandise are contracted
for.
C. A nonspecified contract for prepaid funeral bene fits
provided for pursuant to paragraph 2 of subsection B of Section 6125
of this title which is to be funded by assign ment of life insurance
proceeds issued on or after the effective da te of this act shall
provide that:
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1. The total proceeds paid to the organization under the
insurance policy or annuity shall not exceed the actual retai l cost
of the funeral services and merchandise at the time of delivery;
2. Any funds remaining unused shall be refunded to the
purchaser or to the pers onal representative of the purchaser or
designated beneficiary; and
3. After November 1, 2009, all pric e lists reflecting the
actual retail cost of funeral services and merchandise used at the
time of the delivery of services shall be retained for a perio d of
at least six (6) years.
D. A violation of this section shall constitute a misdemeanor
and shall be punished by a fine of not less than One Hundred Dollars
($100.00) nor more than Five Hundred Dollars ($500.00) or by
imprisonment in the county jail fo r not less than one (1) month nor
more than six (6) months, or by both such fine and imprisonment.
SECTION 6. AMENDATORY 36 O.S. 2021, Section 6128, is
amended to read as follows:
Section 6128. Each organization shall electronically file an
annual report with the Insurance Commissioner on or before March 15
of each year in such for m and manner as the Insurance Commi ssioner
may require, showing the names and addresses of all pers ons with
whom contracts for prepaid funeral benefits have been made prior to
December 31 of the preceding year which had not been fully
discharged on Decembe r 31 and, also showing the date of the
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contract, the name of the bank or depository holding the tru st fund
and the amount of the trust fund under each contract on the
preceding December 31. Any organization which has discontinued the
sale of prepaid funer al benefits, but which still has ou tstanding
contracts, shall not be required to obtain a renewal o f its permit,
but it shall continue to make annual reports to the Insuran ce
Commissioner until all such contracts have been fully discharged. A
filing fee of Fifty Dollars ($50.00) shall acco mpany each report.
The Commissioner may assess any a dditional fees as deemed necessary
pursuant to this act. If any officer of any orga nization fails or
refuses to file an annual report, or to cause it to be filed withi n
thirty (30) days after he or she has been notified by the Insurance
Commissioner that the report is due and has not been recei ved, he or
she shall be guilty of a misdemeanor and shall be punished as
prescribed in Section 6130 of this title.
SECTION 7. AMENDATORY 36 O.S. 2021, Section 6130, is
amended to read as follows:
Section 6130. A. Any officer, director, agent, or empl oyee of
any organization subject to the terms of Sections 6121 through
6136.18 of this title who makes or attempts to make any contract in
violation of the provisions of Sections 6121 through 6136.18 of this
title, or who refuses to a llow an inspection of the records of the
organization, or who violates any other provision o f Sections 6121
through 6136.18 of this title, upon conviction, shall b e guilty of a
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felony and shall be punished by imprisonment in th e custody of the
Department of Corrections for a term of not more than ten (10)
years, and a fine not exceeding Ten Thous and Dollars ($10,000.00),
and ordered to pay restitution to the victim. Each violation of any
provision of Sections 6121 through 6136.18 of this title shall be
deemed a separate offense and prosecuted individually.
B. The violation of any provision of Se ctions 6121 through
6136.18 of this title shall constitute a cause for the Oklahoma
Funeral Board to revoke, or to refuse to issue or r enew, any license
issued pursuant to the provisions of Sections 396 through 396.33 of
Title 59 of the Oklahoma Statutes. The violation of any provision
of Sections 6121 through 6136.18 of this title shall constitute a
cause for the Insurance Commissioner to issue a notice and order t o
show cause why the l icensee shall not be censured, have the license
of the licensee suspended or revoked, be subject to , after
opportunity for hearing, censure, suspend, revoke, or refuse to
renew a permit, issue a fine of not less than One Hundred Dollar s
($100.00) and not more than One Thousand Dollars ($1,000.00), or be
subject to both such f ine and punishment any combination thereof.
SECTION 8. This act shall become effective November 1, 2023.
COMMITTEE REPORT BY: COMMITTEE ON RETIREMENT AND INSURANCE
February 14, 2023 - DO PASS AS AMENDED BY CS