Oklahoma 2025 Regular Session

Oklahoma House Bill HB1498 Compare Versions

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3		-	SENATE FLOOR VERSION - HB1498 SFLR Page 1
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33	28		ENGROSSED HOUSE
34	29		BILL NO. 1498 By: Chapman and Tedford of the
35	30		House
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37	32		and
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39	34		Reinhardt of the Senate
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45	40		An Act relating to insurance; amending Section 4,
46	41		Chapter 346, O.S.L. 2024 (36 O.S. Supp. 2024, Section
47	42		673), which relates to information security;
48	43		modifying to whom certain information shall be
49	44		reported; amending 36 O.S. 2021, Section 2208, which
50	45		relates to duties of the Insurance Commissioner;
51	46		modifying duties; amending 36 O.S. 2021, Section
52	47		6121, which relates to permits required for prepaid
53	48		funeral services; modifying language to clarify
54	49		applicability; providing definition; requiring
55	50		response to inquiry; requiring notifying the
56	51		Insurance Commissioner of changes in certain
57	52		information; amending 36 O.S. 2021, Section 6124,
58	53		which relates to the accep tance of money for prepaid
59	54		funeral benefits; proscribing manner in which
60	55		applications for permits shall be filed; providing
61	56		procedures for certain expired permits; permitting
62	57		the Insurance Commissioner to suspend, revoke, or
63	58		refuse to renew permits; amendi ng 36 O.S. 2021,
64	59		Section 6124.1, as amended by Section 15, Chapter
65	60		345, O.S.L. 2024 (36 O.S. Supp. 2024, Sec tion
66	61		6124.1), which relates to the transfer of ownership
67	62		of prepaid funeral benefits; clarifying the manner in
68	63		which certain notice shall be provide d; permitting
69	64		the Insurance Commissioner to take actions pursuant
70	65		to Articles 18 and 19 of Title 36 of the Oklahoma
71	66		Statutes; amending 36 O.S. 2021, Section 6124.2,
72	67		which relates to the application for change of name
73	68		of a prepaid funeral benefit permit hol der; modifying
74	69		language for clarity; requiring additional
75	70		information; prohibiting conducting unpermitted
	71	+	prepaid funeral benefit business; amending 36 O.S.
	72	+	2021, Section 6125.2, which relates to funding
	73	+	prepaid funeral benefits contract by assignment of
	74	+	life insurance proceeds; permitting assignment from
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106		-	life insurance proceeds; permitting assignment from
107	101		certain insurance policies and certain annuities;
108	102		amending 36 O.S. 2021, Section 6128, which relates to
109	103		annual report to Insurance Commissioner; clarifying
110	104		organization is responsible for transaction or ot her
111	105		applicable fees; amending 36 O.S. 2021, Section 6129,
112	106		which relates to maintenance of records; modifying
113	107		penalty; amending 36 O.S. 2021, Section 6130, which
114	108		relates to violations and penalties; permitting the
115	109		censure, suspension, revocation, or refusal of permit
116	110		after opportunity for hearing; amending 36 O.S. 2021,
117	111		Section 7125, which relates to permit applications
118	112		under the Cemetery Merchandise Trust Act; clarifying
119	113		manner in which applications shall be filed;
120	114		permitting reinstatement of certain expire d permits;
121	115		clarifying no entitlement after revocation; requiring
122	116		submission of certain changes by permit hol ders;
123	117		requiring response to inquiry; amending 36 O.S. 2021,
124	118		Section 7127, which relates to surety bond in lieu of
125	119		trust requirement; modifying timel ine for notice;
126	120		amending 36 O.S. 2021, Section 7128, which relates to
127	121		filing of annual report; clarifying report be filed
128	122		electronically; amending 36 O.S. 2021, Section 7131,
129	123		which relates to Insurance Commissioner's actions for
130	124		violations; clarifying vio lations; modifying minimum
131	125		penalty; amending 36 O.S. 2021, Section 7133, which
132	126		relates to failure to comply with Insurance
133	127		Commissioner examination; modifying penalties for
134	128		refusal or interference to examination; repealing 36
135	129		O.S. 2021, Sections 1106.1, 68 13, 6814, and 6815; and
136	130		providing an effective date.
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141	137		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
142	138		SECTION 1. AMENDATORY Section 4, Chapter 346, O.S.L.
143	139		2024 (36 O.S. Supp. 2024, Section 673), is amended to read as
144	140		follows:
	141	+	Section 673. A. Each licensee in this state shall develop,
	142	+	implement, and maintain a comprehensive written information security
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172		-	Section 673. A. Each licensee in this state shall develop,
173		-	implement, and maintain a comprehensive written information security
174	169		program based on the risk assessment of the licensee provided for in
175	170		this act and that contains administrative, technic al, and physical
176	171		safeguards for the protection of no npublic information and the
177	172		information systems of the licensee. The program shall be
178	173		commensurate with the size and complexity of the licensee, the
179	174		nature and scope of the activities of the licensee, in cluding its
180	175		use of third-party service providers, and the sensitivity of the
181	176		nonpublic information used by the licensee or in the possession,
182	177		custody, or control of the licensee.
183	178		B. An information security program of a licensee shall be
184	179		designed to:
185	180		1. Protect the security and confidentiality of nonpublic
186	181		information and the security of the information systems;
187	182		2. Protect against any threats or hazards to the security or
188	183		integrity of nonpublic information and the information systems;
189	184		3. Protect against unauthorized access to or use of nonpublic
190	185		information, and minimize the likelihood of harm to any consumer;
191	186		and
192	187		4. Define and periodically reevaluate a schedule for retention
193	188		of nonpublic information and a mechanism for its destruction when no
194	189		longer needed.
195	190		C. The licensee shall:
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223	217		1. Designate one or mo re employees, an affiliate, or an outside
224	218		vendor designated to act on behalf of the licensee who is
225	219		responsible for the information security program;
226	220		2. Identify reasonably foreseeable internal or extern al threats
227	221		that could result in unauthorized access, transmission, disclosure,
228	222		misuse, alteration, or destruction of nonpublic information
229	223		including, but not limited to, the security of information systems
230	224		and nonpublic information that are accessible to, or held by, third-
231	225		party service providers;
232	226		3. Assess the likelihood and potential damage of these threats,
233	227		taking into consideration the sensitivity of the nonpublic
234	228		information;
235	229		4. Assess the sufficiency of policies, procedures, information
236	230		systems, and other safeguards in place to manage these threats,
237	231		including consideration of threats in each relevant area of the
238	232		operations of the licensee, including:
239	233		a. employee training and management,
240	234		b. information systems, including, but not limited to,
241	235		network and software design, as well as information
242	236		classification, governance, processing, storage,
243	237		transmission, and disposal, and
244	238		c. detecting, preventing, and responding to attacks,
245	239		intrusions, or other systems failures; and
246	240
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273	266		5. Implement information safeguards to manage the threats
274	267		identified in its ongoing assessment, and no less than annually,
275	268		assess the effectiveness of the key controls, systems, and
276	269		procedures of the safeguards.
277	270		D. Based on the results of the risk assessment, the licensee
278	271		shall:
279	272		1. Design its information security program to mitigate the
280	273		identified risks, commensurate with the size and complexity of the
281	274		licensee, the nature and scope of the activities of the licensee
282	275		including its use of third -party service providers, and the
283	276		sensitivity of the nonpublic information used by the licensee or in
284	277		the possession, custody, or control of the licensee;
285	278		2. Determine and implement security measures deemed
286	279		appropriate, including:
287	280		a. place access controls on information systems including
288	281		controls to authenticate and permit access only to
289	282		authorized individuals to protect against the
290	283		unauthorized acquisition of nonpublic information,
291	284		b. identify and manage the data, personnel, devices,
292	285		systems, and facilities that enable the organization
293	286		to achieve business purposes in accordance with their
294	287		relative importance to business objectives and the
295	288		risk strategy of the organization,
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323	315		c. restrict physical access to nonpublic information to
324	316		authorized individuals only,
325	317		d. protect by encryption or other appropriate m eans, all
326	318		nonpublic information while being transmit ted over an
327	319		external network and all nonpublic information stored
328	320		on a laptop computer or other portable computing or
329	321		storage device or media,
330	322		e. adopt secure development practices for in -house
331	323		developed applications utilized by the licensee,
332	324		f. modify the information system in accordance with the
333	325		information security program of the licensee,
334	326		g. utilize effective controls, which may include multi -
335	327		factor authentication procedures for any authorized
336	328		individual accessing nonpublic information,
337	329		h. regularly test and monitor systems and procedures to
338	330		detect actual and attempted attacks on, or intrusions
339	331		into, information systems,
340	332		i. include audit trails within the information security
341	333		program designed to detect and respond to
342	334		cybersecurity events and designed to reconstruct
343	335		material financial transactions sufficient to support
344	336		normal operations and obligations of the licensee,
345	337		j. implement measures to protect against destruction,
346	338		loss, or damage of nonpublic info rmation due to
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374	365		environmental hazards such as fire an d water damage or
375	366		other catastrophic events or technological failures,
376	367		and
377	368		k. develop, implement, and maintain procedures for the
378	369		secure disposal of nonpublic information in any
379	370		format;
380	371		3. Include cybersecurity risks in the enterprise risk
381	372		management process of the licensee;
382	373		4. Stay informed regarding emerging threats or vulnerabilities
383	374		and utilize reasonable security measures when sharing information
384	375		relative to the character of the sharing and the type of information
385	376		shared; and
386	377		5. Provide its personne l with cybersecurity awareness training
387	378		that is updated as necessary to reflect risks identified by the
388	379		licensee in the risk assessment.
389	380		E. If the licensee has a board of directors, the board or an
390	381		appropriate committee of the board, at a minimum, within one (1)
391	382		year of the effective date of this act July 1, 2024, shall:
392	383		1. Require the executive management of the licensee or its
393	384		delegates to develop, implement, and maintain the information
394	385		security program of the licensee;
395	386		2. Require the executive manage ment of the licensee or its
396	387		delegates to report to the Insurance Commissioner board in writing,
397	388		at least annually, the following information:
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425	415		a. the overall status of the information security program
426	416		and the compliance of the licensee with this act, and
427	417		b. material matters related to the information security
428	418		program, addressing issues such as risk assessment,
429	419		risk management and control decisions, third -party
430	420		service provider arrangements, results of testi ng,
431	421		cybersecurity events or violations and responses of
432	422		the management to those events or violations, and
433	423		recommendations for changes in the information
434	424		security program; and
435	425		3. If executive management delegates any of its
436	426		responsibilities, it shall overs ee the development, implementation,
437	427		and maintenance of the information security program of the licensee
438	428		prepared by the delegate or delegates and shall receive a report
439	429		from the delegate or delegates complying with the requirements of
440	430		the report to the boa rd.
441	431		F. A licensee shall exercise due diligence in s electing its
442	432		third-party service provider and shall require the provider to
443	433		implement appropriate administrative, technical, and physical
444	434		measures to protect and secure the information systems and nonpubl ic
445	435		information that are accessible to, or held by, the third -party
446	436		service provider.
447	437		G. The licensee shall monitor, evaluate, and adjust, as
448	438		appropriate, the information security program consistent with any
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476	465		relevant changes in technology, the sensitivity of its nonpublic
477	466		information, internal or external t hreats to information and the
478	467		changing business arrangements of the licensee, such as mergers and
479	468		acquisitions, alliances and joint ventures, outsourcing
480	469		arrangements, and changes to information systems.
481	470		H. As part of its information security program, each licensee
482	471		shall establish a written incident response plan designed to
483	472		promptly respond to, and recover from, any cybersecurity event that
484	473		compromises the confidentiality, integrity, or availability of
485	474		nonpublic information in its possession, the informat ion systems of
486	475		the licensee, or the continuing functionality of any aspect of the
487	476		business or operations of the licensee.
488	477		The incident response plan shall address the following areas:
489	478		1. The internal pro cess for responding to a cybersecurity
490	479		event;
491	480		2. The goals of the incident response plan;
492	481		3. The definition of clear roles, responsibilities, and levels
493	482		of decision-making authority;
494	483		4. External and internal communications and information
495	484		sharing;
496	485		5. Identification of requirements for the remediation of any
497	486		identified weaknesses in information systems and associated
498	487		controls;
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526	514		6. Documentation and reporting regarding cybersecurity events
527	515		and related incident response activities; and
528	516		7. The evaluation a nd revision as necessary of the incident
529	517		response plan following a cybersecurity event.
530	518		I. Annually, each insurer domiciled in this state shall submit
531	519		to the Insurance Commissioner a written statement by April 15,
532	520		certifying that the insurer complies with the requirements set forth
533	521		in this section. Each i nsurer shall maintain, for examination by
534	522		the Insurance Department, all records, schedules, and data
535	523		supporting this certificate for a period of five (5) years. To the
536	524		extent an insurer has identified ar eas, systems, or processes that
537	525		require material improvement, updating, or redesign, the insurer
538	526		shall document the identification and the remedial efforts planned
539	527		and underway to address such areas, systems, or processes. The
540	528		documentation shall be avail able for inspection by the Commissioner
541	529		upon request.
542	530		SECTION 2. AMENDATORY 36 O.S. 2021, Section 2208, is
543	531		amended to read as follows:
544	532		Section 2208. A. The Insurance Commissioner shall annually
545	533		review negotiations between the tr ust and any entity to provide
546	534		administrative, claim, underwriting or claim management services or
547	535		excess insurance, aggregate excess insurance and reinsurance to the
548	536		trust.
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576	563		B. The Commissioner shall, at least twice yearly, review and
577	564		evaluate each categor y of operations of the trust or association as
578	565		follows:
579	566		1. Underwriting policies and activities, including all new
580	567		applications for coverage, as well as all decisions regarding denial
581	568		of new policies and surcharges on or nonrenewal of existing
582	569		insureds;
583	570		2. Summaries of all claims activities, including number of
584	571		claims filed, lawsuits filed, resolution of closed claims and
585	572		lawsuits, amounts paid in settlements, jury verdicts, defense
586	573		attorney fees, expert witness costs and other defense costs;
587	574		3. Consumer satisfaction with quality of service by the trust
588	575		or its agents;
589	576		4. Investment activities;
590	577		5. All filed base rates and proposed rate increases; and
591	578		6. All risk-management activities, including continuing
592	579		education and counseling of insureds.
593	580		C. The Commissioner shall further study and analyze the cost of
594	581		administration of the trust to determine how its administrative
595	582		costs compare to the administrative costs of other medical
596	583		professional liability trusts and insurers providing medical
597	584		liability coverage. The Commissioner shall submit a report of the
598	585		Commissioner's study to the Governor, the President Pro Tempore of
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626	612		the Senate and the Speaker of the House of Representatives no later
627	613		than February 1 of each year.
628	614		D. The trust shall provide the Commissio ner with policy
629	615		changes, rate changes, rules proposed by the trust and changes to
630	616		the trust instrument prior to implementation of policy changes, rate
631	617		changes, proposed rules and changes to the trust instrument within
632	618		thirty (30) days of implementation of such changes.
633	619		SECTION 3. AMENDATORY 36 O.S. 2021, Section 6121, is
634	620		amended to read as follows:
635	621		Section 6121. A. Any individual, firm, partnership,
636	622		corporation, or association (hereinafter called "organization")
637	623		organization which shall offer for sale, accept money or anything of
638	624		value, or contract for prearranged, or prepaid funeral services, or
639	625		funeral service merchandise as defined in the Funeral Services
640	626		Licensing Act, or for any contract providing future funeral services
641	627		or funeral merchandise at a fixed price or at a cost plu s a
642	628		percentage, or at retail price less a percentage discount, or
643	629		providing for any special consideration of any kind to be granted or
644	630		made available to the purchaser or holder of such contract, in this
645	631		state, under any sales contract, bond, certificate or other form of
646	632		written document providing for prepaid, discounted or otherwise
647	633		specially priced funeral or burial benefits or services or funeral
648	634		merchandise to be delivered at an undetermined future date dependent
649	635		upon the death of a contracting party or other person designated by
650	636
651		-	SENATE FLOOR VERSION - HB1498 SFLR Page 13
652		-	(Bold face denotes Committee Amendments) 1
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677	662		a contracting party (hereinafter called "prepaid funeral benefits")
678	663		shall first obtain a permit from the Insurance Commissioner
679	664		authorizing the transaction of this type of busin ess before entering
680	665		into any such contract . It shall be unlawful to sell offer for
681	666		sale, accept money or anything of value for, or contract for prepaid
682	667		funeral benefits unless the seller holds without a valid, current
683	668		permit at the time the contract is ma de.
684	669		B. The Insurance Commissioner may deny the issu ance of a permit
685	670		if the organization:
686	671		1. Makes a material misstatement or misrepresentation in an
687	672		application for a permit;
688	673		2. Fraudulently or deceptively obtains or attempts to obtain a
689	674		permit for another; or
690	675		3. If any of its officers, owners, partners, or directors, or
691	676		other persons responsible for the conduct of its affairs and day -to-
692	677		day operations are determined by the Commissioner to not be
693	678		competent, trustworthy, financially responsible, and of g ood
694	679		personal and business reputation and character.
695	680		C. The Insurance Commissioner may approve an application of an
696	681		organization for a permit and deny the request of the organization
697	682		to act as a trustor if the organization , or any of its officers,
698	683		owners, partners, directors, or other persons responsible for the
699	684		conduct of its affairs and day -to-day operations, does not satisfy
700	685
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727	711		all qualifications. This shall not hinder an organization from
728	712		entering into contracts funded by assignments of insurance.
729	713		D. All permits issued pursuant to the provisions of this
730	714		section shall be displayed in a conspicuous place at all times on
731	715		the premises of the organization. No organization may consent to,
732	716		or allow the use or display of, the permit by a person other than
733	717		the persons authorized to represent the organization in contracting
734	718		prepaid funeral benefits.
735	719		E. The organization shall not be entitled to enforce a contract
736	720		made in violation of the act, but the purchaser or the heirs of the
737	721		purchaser, or legal representative, shall be entitled to recover
738	722		triple the amounts pai d to the organization with interest thereon at
739	723		the rate of six percent (6%) per annum under any contract made in
740	724		violation hereof.
741	725		F. For purposes of Sections 6121 through 6136.18 of this title,
742	726		the term "organization" shall mean a "funeral establishment", as
743	727		defined in the Funeral Services Licensing Act, in Section 396.2 of
744	728		Title 59 of the Oklahoma Statutes.
745	729		G. Each permit holder, upon receipt of any inquiry from the
746	730		Insurance Commissioner, shall, withi n twenty (20) days from the date
747	731		of receipt of the inquiry, furnish the Insurance Commissioner with
748	732		an adequate response to the inquiry.
749	733		H. Each permit holder shall electronically notify the Insurance
750	734		Commissioner, in the manner and form prescribed by the Insurance
751	735
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777	760
778	761		Commissioner, along with any applicable fees, of any change in
779	762		address or contact information within thirty (30) days of the
780	763		change. Any submission of a change of legal business name, dba or
781	764		assumed name, address or email address received more than thirty
782	765		(30) days after the change occurred shal l be accompanied by a fee of
783	766		Fifty Dollars ($50.00).
784	767		SECTION 4. AMENDATORY 36 O.S. 2021, Section 6124, is
785	768		amended to read as follows:
786	769		Section 6124. A. Each organization desirin g to accept money or
787	770		anything of value for prepaid funeral benefits or an agreement to
788	771		provide funeral benefits in the future at a fixed or predetermined
789	772		cost, shall file an application Applications for a permit shall be
790	773		filed electronically with the Insurance Commissioner, in the manner
791	774		and form prescribed by the Insurance Commissioner, and shall at the
792	775		time of filing an application pay one initial include a filing fee
793	776		of Fifty Dollars ($50.00) along with any transaction or other
794	777		applicable fees. The Insurance Commissioner shall may issue a
795	778		permit upon:
796	779		1. The receipt of the application and payment of the filing
797	780		fee;
798	781		2. Determination that the organization is in good standing as a
799	782		funeral establishment with the Oklahoma Funeral Board; and
800	783		3. Making a finding that the organization has complied with
801	784		this act and the rules promulgated under this act by the Insurance
802	785
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828	810
829	811		Commissioner. All applications shall be signed by the organization
830	812		requesting the permit, and shall contain a statement that the
831	813		organization will comply with all the requirements as established by
832	814		this act. All permits shall expire annually on December 31 of the
833	815		year the permit is first issued , unless renewed; permits may be
834	816		renewed for a period not to exceed the succeeding December 31 upon
835	817		the payment of a renewal fee of Fifty Dollars ($50.00). Late
836	818		application for renewal of a permit shall require a fee of double
837	819		the renewal fee. No application for renewal of a permit shall be
838	820		accepted after January 31 of each year. The Insurance Commission er
839	821		may authorize acceptance of a new permit application pursuant to
840	822		this section prior to the expiration of the one -year period upon
841	823		good cause shown A permit expired for failure to submit a renewal
842	824		application may be reinstated within ninety (90) days aft er the
843	825		expiration date by electronically submitting a fee in an amount that
844	826		is double the renewal fee and a renewal application in the form and
845	827		manner prescribed by the Insurance Commissioner, along with any
846	828		transaction or other applicable fees. A permit holder whose permit
847	829		has been expired for more than ninety (90) days shall reapply as if
848	830		they were a new applicant and pay an application fee equal to an
849	831		amount that is double the renewal fee in addition to any fines
850	832		imposed. All applications received afte r the permit has been
851	833		expired for more than ninety ( 90) days shall include a detailed
852	834		report in the form and manner prescribed by the Insurance
853	835
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880	861		Commissioner of any prepaid funeral benefits offered or provided in
881	862		this state during the period of the expired permit.
882	863		B. The Insurance Commissioner may cancel suspend, revoke, or
883	864		refuse to renew a permit or refuse to issue a permit or refuse to
884	865		issue a renewal of a permit for failure to comply with any provision
885	866		of this act, or any valid rule, which the Insurance Commissioner has
886	867		promulgated, after reasonable noti ce to the organization and after
887	868		hearing if the organization requests and opportunity for a hearing.
888	869		When the Insurance Commissioner cancels suspends or revokes a permit
889	870		or refuses to issue a renewal of a permit for a violation as
890	871		provided by this subsection , the Insurance Commissioner shall notify
891	872		the Oklahoma Funeral Board of the action and the nature of any
892	873		violations.
893	874		C. No organization shall be entitled to a new permit for a
894	875		period of one (1) year a fter cancellation revocation or refusal by
895	876		the Insurance Commissioner to issue or renew the permit of the
896	877		organization, but shall thereafter be entitled to a new permit upon
897	878		satisfactory proof of compliance with this law after the expiration
898	879		of the one-year period.
899	880		D. Any person or organization aggrieved by the actions of the
900	881		Insurance Commissioner may appeal therefrom as provided by Article
901	882		II of the Administrative Procedures Act.
902	883
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928	908
929	909		SECTION 5. AMENDATORY 36 O.S. 2021, Section 6124. 1, as
930	910		amended by Section 15, Chapter 345, O.S.L. 202 4 (36 O.S. Supp. 2024,
931	911		Section 6124.1), is amended to read as follows:
932	912		Section 6124.1. A. No prepaid funeral benefit permit shall be
933	913		transferable from one organization to another except as provided in
934	914		this section. The selling organization shall notify the Insurance
935	915		Commissioner at least forty -five (45) days prior to transfer of
936	916		ownership. Notification shall be electronic in a the manner and
937	917		form provided prescribed by the Insurance Commissioner and sh all
938	918		contain at a minimum the following information:
939	919		1. The name of the acquiring organization;
940	920		2. The date the acquiring organization will take control of the
941	921		funeral establishment selling organization ;
942	922		3. A listing of all unrealized prepaid funeral ben efit
943	923		contracts funded by insurance assignments;
944	924		4. A listing of all unrealized prepaid funeral benefit
945	925		contracts funded by trusts;
946	926		5. A detailed description of existing trusts to include, but
947	927		not be limited to, the name of the contract holder and the tru st
948	928		value per contract; and
949	929		6. Any other information the Insurance Commissioner may
950	930		request.
951	931
952		-	SENATE FLOOR VERSION - HB1498 SFLR Page 19
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	932	+	ENGR. H. B. NO. 1498 Page 19 1
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978	957		B. The Insurance Commissioner may waive or lessen the notice
979	958		requirement provided for in subsection A of this section upon good
980	959		cause shown.
981	960		C. The acquiring org anization shall make application for a
982	961		permit at least thirty (30) days prior to the transfer of ownership.
983	962		Approval is contingent upon the acquiring organization receiving an
984	963		establishment license as provided for in Sections 395.1 through
985	964		396.33 of Title 59 of the Oklahoma Statutes. The permit application
986	965		shall include an assumption agreement executed by the acquiring
987	966		organization in a form provided by the Insurance Commissioner and
988	967		the selling organization .
989	968		D. The acquiring organization shall be issued a prepaid funeral
990	969		benefit permit prior to the relinquishment of control of the trust
991	970		by the selling organization. The acquiring organization shall not
992	971		access funds held in the trust until authorization has been given by
993	972		the Insurance Commissioner.
994	973		E. Upon good cause shown, the Insurance Commissioner may deny
995	974		transfer of the trust from the selling organization to the acquiring
996	975		organization.
997	976		F. The Insurance Commissioner may assume the role of acting
998	977		trust conservator take any actions pursuant to Articles 18 and 19 of
999	978		this title as a means of safeguarding the rights and interests of
1000	979		the individual contract holders or purchasers, their beneficiaries,
1001	980		successors, or personal representatives, or whenever necessary to
1002	981
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1029	1007		protect the public welfare. The organizat ion may make application
1030	1008		to the Insurance Commission er to draw down funds upon fulfillment of
1031	1009		the prepaid funeral service contract.
1032	1010		G. Whenever a prepaid funeral benefit permit holder an
1033	1011		organization refuses to submit the books, records, papers and
1034	1012		instruments of the prepaid funeral benefit contracts to the
1035	1013		examination and inspection of the assistants or examiners of the
1036	1014		Insurance Commissioner, or refuses or neglects to establish or
1037	1015		maintain a prepaid funeral benefit permit in accordance with the
1038	1016		requirements of the Prepaid Funeral Benefits Act within ninet y (90)
1039	1017		days after a written demand to establish or maintain a prepaid
1040	1018		funeral benefit permit is made by the Insurance Commissioner, or in
1041	1019		any manner obstructs or interferes with the examination of its
1042	1020		prepaid funeral benefit contracts or refuses to be examined on oath
1043	1021		concerning any of the affairs of its prepaid funeral benefit
1044	1022		contracts, or for any other grounds listed in Article 18 or 19 of
1045	1023		this title, the Insurance Commissioner may make application for
1046	1024		receivership in the manner of a domestic insurer or take any other
1047	1025		action pursuant to Articles 18 and 19 , Sections 1901 through 1920 of
1048	1026		this title, in addition to the penalties and other enforcement
1049	1027		provisions of this act .
1050	1028		H. The Insurance Commissioner ma y prescribe rules concerning
1051	1029		matters incidental to this section.
1052	1030
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1079	1056		I. For the purposes of Sections 6121 through 6136.18 of this
1080	1057		title, "personal representative" means the person or persons
1081	1058		designated by the purchaser of the contract for prepaid funeral
1082	1059		benefits as having rights of ownership and control to th e prepaid
1083	1060		funds upon death of the purchaser; the guardian, executor, or the
1084	1061		personal representative of the estate of the purchaser; or the
1085	1062		claiming successor or successors establishing lawful right to the
1086	1063		prepaid funds in accordance with Section 393 of Title 58 of the
1087	1064		Oklahoma Statutes.
1088	1065		SECTION 6. AMENDATORY 36 O.S. 2021, Section 6124.2, is
1089	1066		amended to read as follows:
1090	1067		Section 6124.2. A. No prepaid funeral benefit permit holder
1091	1068		organization shall change the name under which the permit holder
1092	1069		operates it sells prepaid funeral benefits except as provided in
1093	1070		this section. The prepaid funeral benefit permit holder
1094	1071		organization shall obtain approval from the Insurance Commissioner
1095	1072		at least thirty (30) days prior to changing the name of the permit
1096	1073		holder. The application for change of name of a prepaid funeral
1097	1074		benefit permit holder shall be in a the manner and form provided
1098	1075		prescribed by the Insurance Commissioner and shall contain, at a
1099	1076		minimum, the following information:
1100	1077		1. The name of the organization as it currently appears on its
1101	1078		permit holder;
1102	1079		2. The proposed new name of the permit holder organization; and
1103	1080
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1130	1106		3. The proposed date the name change will become effective ;
1131	1107		4. The business address of the organization; and
1132	1108		5. The organization's primary email address .
1133	1109		B. The Insurance Commissioner may waive the approval
1134	1110		requirement provided for in subsection A of this section upon good
1135	1111		cause shown.
1136	1112		C. The Insurance Commissioner may deny the organization's
1137	1113		change of name of the prepaid funeral benefit permit holder upon
1138	1114		good cause shown.
1139	1115		D. C. Upon approval of a change of name, the Insurance
1140	1116		Commissioner shall issue a prepaid funeral benefit permit with the
1141	1117		new name. The prepaid funeral benefit permit holder
1142	1118		D. Every organization shall display in a conspicuous place at
1143	1119		all times on the premises of the organization all permits issued
1144	1120		pursuant to the provisions of this section act. No organization may
1145	1121		consent to or allow the use or displ ay of the permit by a person
1146	1122		other than the persons authorized to represent the organization in
1147	1123		contracting prepaid funeral benefits.
1148	1124		E. The Insurance Commissioner may prescribe promulgate rules
1149	1125		concerning matters incidental to this section.
1150	1126		F. Organizations shall not conduct prepaid funeral benefit
1151	1127		business under any name or at a different business address other
1152	1128		than that specified in the permit.
1153	1129
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1177	1152		23
1178	1153		24
1179	1154
1180	1155		SECTION 7. AMENDATORY 36 O.S. 2021, Section 6125.2, is
1181	1156		amended to read as follows:
1182	1157		Section 6125.2. A. Contracts for prepaid funeral b enefits
1183	1158		provided for pursuant to Section 6125 of this title may be funded by
1184	1159		assignments of life insurance proceeds from either a standard life
1185	1160		or accident insurance policy or an individual or group fixed annuity
1186	1161		to the contracting organization.
1187	1162		B. A guaranteed contract for prepaid funeral benefits provided
1188	1163		for pursuant to paragraph 1 of subsection B of Section 6125 of this
1189	1164		title which is to be funded by assignment of life insurance proceeds
1190	1165		from either a standard life or accident insurance policy or an
1191	1166		individual or group fixed annuity shall provide that:
1192	1167		1. The contract be funded by a life an insurance policy or
1193	1168		annuity issued in the face amount of the current purchase price of
1194	1169		the contract for prepaid funeral benefits;
1195	1170		2. All accrued benefits under the insurance policy or annuity
1196	1171		shall become available for disbursement to the organization upon the
1197	1172		death of the purchaser or designated beneficiary of the prepaid
1198	1173		funeral contract;
1199	1174		3. The purchaser or designated beneficiary shall be the same
1200	1175		individual under the contract named as the insured or designated
1201	1176		beneficiary under the life insurance policy or annuity; and
1202	1177		4. The disbursement of life insurance or annuity proceeds to
1203	1178		the organization shall constitu te payment in full to the
1204	1179
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1226	1200		21
1227	1201		22
1228	1202		23
1229	1203		24
1230	1204
1231	1205		organization for the services and merchandise contracted for prepaid
1232	1206		funeral benefits.
1233	1207		C. A nonspecified contract for prepaid funeral benefits
1234	1208		provided for pursuant to paragraph 2 of subsection B of Section 6125
1235	1209		of this title which is to be funded by assignment of life insurance
1236	1210		proceeds from either a standard life or accident insurance policy or
1237	1211		an individual or group fixed annuity shall provide that:
1238	1212		1. The total proceeds paid to the organization under the
1239	1213		insurance policy or annuity shall not exceed the actual retail cost
1240	1214		of the funeral services and merchandise at the time of delivery;
1241	1215		2. Any funds remaining unused shall be refunded to the
1242	1216		purchaser or to, the personal representative of the purchaser or the
1243	1217		designated beneficiary; and
1244	1218		3. After November 1, 2009, all price lists reflecting the
1245	1219		actual retail cost of funeral services and merchandise used at the
1246	1220		time of the delivery of services shall be retained for a period of
1247	1221		at least six (6) years.
1248	1222		D. A violation of this sectio n shall constitute a misdemeanor
1249	1223		and shall be punished by a fine of not less than One Hundred Dollars
1250	1224		($100.00) nor more than Five Hundred Dollars ($500.00) or by
1251	1225		imprisonment in the county jail for not less than one (1) month nor
1252	1226		more than six (6) months, or by both such fine and imprisonment.
1253	1227		SECTION 8. AMENDATORY 36 O.S. 2021, Section 6128, is
1254	1228		amended to read as follows:
1255	1229
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1261	1234		5
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1263	1236		7
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1265	1238		9
1266	1239		10
1267	1240		11
1268	1241		12
1269	1242		13
1270	1243		14
1271	1244		15
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1273	1246		17
1274	1247		18
1275	1248		19
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1277	1250		21
1278	1251		22
1279	1252		23
1280	1253		24
1281	1254
1282	1255		Section 6128. Each organization shall file an annual report
1283	1256		with the Insurance Commissioner on or before Mar ch 15 of each year
1284	1257		in such form as the Insurance Commissioner may require, showing the
1285	1258		names and addresses of all persons with whom contracts for prepaid
1286	1259		funeral benefits have been made prior to December 31 of the
1287	1260		preceding year which had not been fully di scharged on December 31
1288	1261		and, also showing the date o f the contract, the name of the bank or
1289	1262		depository holding the trust fund and the amount of the trust fund
1290	1263		under each contract on the preceding December 31. Any organization
1291	1264		which has discontinued the sa le of prepaid funeral benefits, but
1292	1265		which still has outstanding contracts, shall not be required to
1293	1266		obtain a renewal of its permit, but it shall continue to make annual
1294	1267		reports to the Insurance Commissioner until all such contracts have
1295	1268		been fully discharged. A filing fee of Fifty Dollars ($50.00) ,
1296	1269		along with any transaction or other applicable fees, shall accompany
1297	1270		each report. If any officer of any organization fails or refuses to
1298	1271		file an annual report, or to cause it to be filed within thirty (30)
1299	1272		days after he or she has been notified by the Insurance Commissioner
1300	1273		that the report is due and has not been received, he or she shall be
1301	1274		guilty of a misdemeanor and shall be punished as prescribed in
1302	1275		Section 6130 of this title.
1303	1276		SECTION 9. AMENDATORY 36 O.S. 2021, Section 6129, is
1304	1277		amended to read as follows:
1305	1278
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1313	1285		7
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1316	1288		10
1317	1289		11
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1320	1292		14
1321	1293		15
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1323	1295		17
1324	1296		18
1325	1297		19
1326	1298		20
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1328	1300		22
1329	1301		23
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1331	1303
1332	1304		Section 6129. Each organization which has outstanding contracts
1333	1305		for prepaid funeral benefits shall maintain within this state such
1334	1306		records as the Insurance Commissioner may requir e to enable the
1335	1307		Insurance Commissioner to determine whether the organization is
1336	1308		complying with the provisions of Sections 6121 through 6136 6136.18
1337	1309		of this title. Each organization shall provide to the Insurance
1338	1310		Commissioner an annual statement of the fin ancial condition of funds
1339	1311		collected pursuant to cont racts for prepaid funeral benefits. The
1340	1312		statement shall be due by the fifteenth day of March of each year
1341	1313		and shall reflect, at a minimum, the assets and liabilities of each
1342	1314		prepaid funeral benefits fund and the location and status of all
1343	1315		trust funds for prepaid funeral benefits as of the last day of
1344	1316		December of the preceding year. Failure to file an annual statement
1345	1317		by the date required may result in censure, or suspension or
1346	1318		revocation of license the permit, and or an administrative penalty
1347	1319		imposed by the Insurance Commissioner of from One Hundred Dollars
1348	1320		($100.00) to not to exceed One Thousand Dollars ($1,000.00) for each
1349	1321		occurrence, or be subject to both penalty and punishment .
1350	1322		SECTION 10. AMENDATORY 36 O.S. 2021, Section 6130, is
1351	1323		amended to read as follows:
1352	1324		Section 6130. A. Any officer, director, agent, or employee of
1353	1325		any organization subject to the terms of Sections 6121 through
1354	1326		6136.18 of this title who makes or attempts t o make any contract in
1355	1327		violation of the provisions o f Sections 6121 through 6136.18 of this
1356	1328
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1370	1341		13
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1378	1349		21
1379	1350		22
1380	1351		23
1381	1352		24
1382	1353
1383	1354		title, or who refuses to allow an inspection of the records of the
1384	1355		organization, or who violates any other provision of Sections 6121
1385	1356		through 6136.18 of this title, upon conviction, shall be guilty of a
1386	1357		felony and shall be punished by imprisonment in the custody of the
1387	1358		Department of Corrections for a term of not more than ten (10)
1388	1359		years, and a fine not exceeding Ten Thousand Dollars ($10,000.00),
1389	1360		and ordered to pay r estitution to the victim. Each violation of any
1390	1361		provision of Sections 6121 through 6136.18 of this title shall be
1391	1362		deemed a separate offense and prosecuted individually.
1392	1363		B. The violation of any provision of Sections 6121 through
1393	1364		6136.18 of this title shal l constitute a cause for the Oklahoma
1394	1365		Funeral Board to revoke, or to refuse to issue or renew, any license
1395	1366		issued pursuant to the provisions of Sections 396 through 396.33 of
1396	1367		Title 59 of the Oklahoma Statutes. The violation of any provision
1397	1368		of Sections 6121 through 6136.18 of this title shall constitute a
1398	1369		cause for the Insurance Commissioner to issue a notice and order to
1399	1370		show cause why the licensee shall not be censured, have the license
1400	1371		of the licensee suspended or revoked, be subject to , after
1401	1372		opportunity for hearing, censure, suspend, revoke, or refuse to
1402	1373		issue or renew a permit, issue a fine of not less than One Hundred
1403	1374		Dollars ($100.00) and not more than One Thousand Dollars ($1,000.00)
1404	1375		for each occurrence, or be subject to both such fine and punishme nt.
1405	1376		SECTION 11. AMENDATORY 36 O.S. 2021, Section 7125, is
1406	1377		amended to read as follows:
1407	1378
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1426	1396		18
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1433	1403
1434	1404		Section 7125. A. Each organization desiring to accept money or
1435	1405		anything of value for prepaid cemetery merchandise shall file an
1436	1406		application for a permit with the Insurance Commissioner, and shall
1437	1407		at the time of filing the application pay one initial filing fee of
1438	1408		Two Hundred Dollars ($200.00). All applications shall be filed
1439	1409		electronically in the manner and form prescribed by the
1440	1410		Commissioner, along with any applicable transaction or other fees.
1441	1411		The Commissioner shall may issue a permit upon the receipt of the
1442	1412		application, the annual report in accordance with Section 7128 of
1443	1413		this title and payment of the filing fee fees, and upon making a
1444	1414		finding that the applicant has complied with the Cemetery
1445	1415		Merchandise Trust Act and the rules as may be established pursuant
1446	1416		to the Cemetery Merchandise Trust Act by the Commissioner. All
1447	1417		applications shall be signed by the organization requesting the
1448	1418		permit, and shall contain a statement that the applicant will comply
1449	1419		with all the requirements as established pursuant to the Cemetery
1450	1420		Merchandise Trust Act. All permits shall expire on March 15 of the
1451	1421		year following the year the permit is first issued, unless ren ewed.
1452	1422		Permits shall may be renewed for a period not to exceed the
1453	1423		succeeding March 15 upon the payment of a renewal fee of Two Hundred
1454	1424		Dollars ($200.00). Late application for renewal of a permit shall
1455	1425		require a fee of double the renewal fee. No applicat ion for renewal
1456	1426		of a permit shall be accepted after April 15 of each year. Late
1457	1427		applicants shall be required to reapply as if they were a new
1458	1428
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1484	1453
1485	1454		applicant, and pay an application fee equal to an amount that is
1486	1455		double the renewal fee in addition to any fines that may have been
1487	1456		imposed with respect to an expired permit Any permit expired for
1488	1457		failure to submit a renewal application may be reinstated within
1489	1458		ninety (90) days after the expiration date by electronically
1490	1459		submitting a fee in an amount that is double t he renewal fee and a
1491	1460		renewal application in the form and manner prescribed by the
1492	1461		Insurance Commissioner, along with any transaction or other
1493	1462		applicable fees. The Insurance Commissioner shall require a permit
1494	1463		holder whose permit has been expired for more than ninety (90) days
1495	1464		to reapply as if they were a new applicant and pay an application
1496	1465		fee equal to an amount that is double the renewal fee in addition to
1497	1466		any fines imposed. All applications received after the permit has
1498	1467		been expired for more than ninet y (90) days shall include a detailed
1499	1468		report of services provided in this state during the period of
1500	1469		expired permit.
1501	1470		B. The Commissioner may cancel a permit or suspend, revoke,
1502	1471		refuse to issue a permit, or refuse to issue a renewal of renew a
1503	1472		permit for failure to comply with any provisions of the Cemetery
1504	1473		Merchandise Trust Act or any rules promulgated thereto by the
1505	1474		Commissioner, after reasonable notice to the permittee and
1506	1475		opportunity for hearing before the Commissioner in accordance with
1507	1476		Article II of the Administrative Procedures Act.
1508	1477
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1534	1502
1535	1503		C. No organization shall be entitled to a new permit after
1536	1504		cancellation revocation, or refusal by the Commissioner to renew a
1537	1505		permit, but shall may thereafter be issued a new permit upon
1538	1506		satisfactory proof of compliance wi th the Cemetery Merchandise Trust
1539	1507		Act and the rules promulgated thereto .
1540	1508		D. Any person or An organization aggrieved by the actions of
1541	1509		the Commissioner may appeal therefrom to the Oklahoma Insurance
1542	1510		Department as provided by the Administrative Procedures A ct.
1543	1511		E. Each permit holder shall electronically subm it, in a form
1544	1512		and manner prescribed by the Insurance Commissioner, along with any
1545	1513		applicable fees, any change of legal business name, dba or assumed
1546	1514		name, address, or email address within thirty (30) days after the
1547	1515		change occurred. Any submission of a change of legal business name,
1548	1516		dba or assumed name, address, or contact e email address received
1549	1517		more than thirty (30) days after the change occurred shall be
1550	1518		accompanied by a fee of Fifty Dollars ($50.00).
1551	1519		F. Every permit holder, upon receipt of any inquiry from the
1552	1520		Insurance Commissioner, shall, within twenty (20) days from the date
1553	1521		of receipt of the inquiry, furnish the Insurance Commissioner with
1554	1522		an adequate response to the inquiry.
1555	1523		SECTION 12. AMENDATORY 36 O.S. 2021, Section 7127, is
1556	1524		amended to read as follows:
1557	1525
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1566	1533		8
1567	1534		9
1568	1535		10
1569	1536		11
1570	1537		12
1571	1538		13
1572	1539		14
1573	1540		15
1574	1541		16
1575	1542		17
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1583	1550
1584	1551		Section 7127. A. As an alternative to the trust requirements
1585	1552		of Section 7126 of this title, an organization may purchase a surety
1586	1553		bond in an amount not less than the min imum funding requirement.
1587	1554		B. The surety bond shall be made payable to the State of
1588	1555		Oklahoma for the benefit of the Insurance Commissioner and all
1589	1556		purchasers of prepaid cemetery merchandise. The bond shall be
1590	1557		approved by the Commissioner.
1591	1558		C. The Commissioner may establish by rule the requirements and
1592	1559		guidelines for the surety bonds required pursuant to this section.
1593	1560		D. A surety bond maintained under the provisions of this
1594	1561		section or Section 7124 of this title may be cancelled or terminated
1595	1562		by the surety only by providing notice to the Commissioner, no lat er
1596	1563		than ninety (90) thirty (30) days before the effective date of the
1597	1564		cancellation or termination. Notwithstanding the cancellation,
1598	1565		termination, or expiration of a bond maintained under this section
1599	1566		or Section 7124 of this title, the surety shall remain liable for
1600	1567		obligations arising during the term of the bond and prior to the
1601	1568		termination, cancellation or expiration.
1602	1569		SECTION 13. AMENDATORY 36 O.S. 2021, Section 7128, is
1603	1570		amended to read as follows:
1604	1571		Section 7128. Each organization shall electronically file an
1605	1572		annual report with the Insurance Commissioner on or before March 15
1606	1573		of each year in a the manner and form as the Commissioner may
1607	1574		require, showing the name of the financial i nstitution holding the
1608	1575
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1634	1600
1635	1601		cemetery merchandise trust fund and the amount of the trust fund
1636	1602		under each contract on the preceding December 31, and also showing
1637	1603		the method of determination of the wholesale costs made pursuant to
1638	1604		Section 7126 of this title. The total required deposits to the
1639	1605		cemetery merchandise trust fund during the year shall also be
1640	1606		reported. Each cemetery is responsible for maintaining satisfactory
1641	1607		books and records, which will adequately justify all information
1642	1608		contained in the annual repor t required by this section. Any
1643	1609		organization which has discontinued the sale of prepaid cemetery
1644	1610		merchandise, but which still has funds deposited in a cemetery
1645	1611		merchandise trust fund or surety, shall not be required to obtain a
1646	1612		renewal of its permit, but it shall continue to make annual reports
1647	1613		to the Commissioner until all the funds have been disbursed pursuant
1648	1614		to the Cemetery Merchandise Trust Act. A filing fee of Two Hundred
1649	1615		Dollars ($200.00), along with any applicable transaction or other
1650	1616		fees, shall accompany each report. If any officer of any
1651	1617		organization fails or refuses to file an annual report, or fails or
1652	1618		refuses to cause it to be filed within thirty (30) days after the
1653	1619		organization has been notified by the Commissioner that the report
1654	1620		is due and has not been received, the officer shall be guilty of a
1655	1621		misdemeanor and shall be punished as prescribed in Section 7134 of
1656	1622		this title.
1657	1623		SECTION 14. AMENDATORY 36 O.S. 2021, Section 7131, is
1658	1624		amended to read as follows:
1659	1625
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1686	1651		Section 7131. A. The Insurance Commissioner, may, after notice
1687	1652		and an opportunity for hearing, initiate an action to recover
1688	1653		payments required to be redeposited to the cemetery merchandise
1689	1654		trust pursuant to the Cemetery Merchandise Trust Act or to recover
1690	1655		other monies received or disbursed in violation of the Cemeter y
1691	1656		Merchandise Trust Act.
1692	1657		B. The Commissioner may, after an opportunity for hearing,
1693	1658		censure a permittee or may suspend or revoke a permit for violation
1694	1659		of any provision of the Cemetery Merchandise Trust Act or the rules
1695	1660		promulgated thereto. In addition to, or in lieu of, any censure,
1696	1661		suspension or revocation, a permittee may be subject to a civil
1697	1662		penalty of not less than One Hundred Dollars ($100.00) nor more than
1698	1663		One Thousand Dollars ($1,000.00) per occ urrence or violation.
1699	1664		SECTION 15. AMENDATORY 36 O.S. 2021, Section 7133, is
1700	1665		amended to read as follows:
1701	1666		Section 7133. Whenever any officer of any organization refuses
1702	1667		to submit the books, records, papers and instruments of an
1703	1668		organization to the examination and inspection of the assistants or
1704	1669		examiners of the Insurance Commissioner, or refuses or neglects to
1705	1670		establish or maintain a cemetery merchandise trust fund in
1706	1671		accordance with the requirements of the Cemetery Merchandise Trust
1707	1672		Act within ninety (90) days after a written demand to establish or
1708	1673		maintain a cemetery merchandise trust fund is made by the
1709	1674		Commissioner, or in any manner obstructs or interferes with the
1710	1675
1711		-	SENATE FLOOR VERSION - HB1498 SFLR Page 34
1712		-	(Bold face denotes Committee Amendments) 1
	1676	+	ENGR. H. B. NO. 1498 Page 34 1
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1737	1701		examination of its cemetery merchandise trust fund, or refuses to be
1738	1702		examined on oath concerning any of the affairs of its cemetery
1739	1703		merchandise trust fund, the Commissioner may make application for
1740	1704		receivership in the manner of a domestic insurer pursuant to
1741	1705		Sections 1901 through 1920 of Title 36 this title of the Oklahoma
1742	1706		Statutes, in addition to the penalties and other enforcement
1743	1707		provisions of the Cemetery Merchandise Trust Act .
1744	1708		SECTION 16. REPEALER 36 O.S. 2021, Sections 1106.1,
1745	1709		6813, 6814, and 6815 are hereby repealed.
1746	1710		SECTION 17. This act shall become effective November 1, 2025.
1747		-	COMMITTEE REPORT BY: COMMITTEE ON BUSINESS AND INSURANCE
1748		-	April 17, 2025 - DO PASS
	1711	+	Passed the House of Representatives the 24th day of March, 2025.
	1712	+
	1713	+
	1714	+
	1715	+
	1716	+	Presiding Officer of the House
	1717	+	of Representatives
	1718	+
	1719	+
	1720	+
	1721	+	Passed the Senate the _____ day of __________, 2025.
	1722	+
	1723	+
	1724	+
	1725	+
	1726	+	Presiding Officer of the Senate
	1727	+
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	1730	+