Relating to certain prepaid funeral benefit contracts.
Impact
The implications of HB3538 are significant for consumers engaging in prepaid funeral arrangements. By allowing purchasers to avoid default as long as they have paid most of their contract, the law potentially reduces the financial burden on individuals who may struggle to meet full payments due to unforeseen circumstances. This change is expected to enhance consumer confidence in making long-term financial arrangements for funeral services.
Summary
House Bill 3538 focuses on the regulation of prepaid funeral benefit contracts in the state of Texas. The bill introduces a provision that stipulates a purchaser of a trust-funded prepaid funeral benefits contract cannot be deemed in default if they have made payments equating to at least 85 percent of the total contract price. This change aims to offer greater flexibility and protection for consumers who enter into these contracts, ensuring they can maintain their agreements as long as they are close to fulfilling their payment obligations.
Contention
Notably, while HB3538 is designed to protect consumers, there may be concerns from funeral service providers regarding the financial implications of being required to provide services without full payment. The legislation could alter the standard practices within the industry, creating a need for funeral providers to modify their policies on service delivery and payment acceptance.
Effective_date
This amendment to the law will only apply to contracts entered into on or after its effective date, September 1, 2009, thereby grandfathering existing contracts under previous regulations.