Bill Text: IL HB4041 | 2011-2012 | 97th General Assembly | Introduced

---

Bill Title: Amends the Illinois Funeral or Burial Funds Act. Restores a provision that allows persons holding less than $500,000 in trust funds to continue to act as the trustee after the funds are deposited. Provides that a pre-need contract must, if funded by a trust, clearly identify the trustee's name and address and the primary state or federal regulator of the trustee. Provides that a trustee may be the seller or provider of funeral services or merchandise if the seller holds sales of less than $500,000 in trust and deposits funds for which the seller is acting as trustee according in a certain manner. Provides that if a purchaser selects a trust arrangement to fund the pre-need contract, the trust must be maintained: (1) in a deposit account maintained by the seller as trustee in a bank, savings and loan association, savings bank, or credit union authorized to do business in Illinois in which accounts are insured by an agency of the federal government, (2) in a trust company authorized to do business in Illinois, or (3) with a corporate fiduciary as defined in the Corporate Fiduciary Act. Restores a provision that allows trust funds to be maintained in a financial institution located in a state adjoining Illinois if certain conditions are met. Provides that a trustee has a duty to manage the trust and, with respect to the investment of trust funds, shall exercise certain judgment and care. Provides that the trustee has a duty to manage and invest the assets pursuant to the Prudent Investor Rule under the Trusts and Trustees Act if the amount of funds to be entrusted exceeds $1,000,000. Amends the Illinois Pre-Need Cemetery Sales Act. Removes language that provides that the seller must retain a corporate fiduciary as an independent trustee for any amount of trust funds. Provides that a trust established under the Act must be maintained: (1) in a deposit account maintained by the seller as trustee in a bank, savings and loan association, or credit union authorized to do business in Illinois in which accounts are insured by an agency of the federal government, (2) in a trust company authorized to do business in Illinois, or (3) in an investment company authorized to do business in Illinois insured by the Securities Brokers Insurance Corporation.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2013-01-08 - Session Sine Die [HB4041 Detail]

Download: Illinois-2011-HB4041-Introduced.html

---

97TH GENERAL ASSEMBLY State of Illinois 2011 and 2012 HB4041 Introduced , by Rep. Dan Brady SYNOPSIS AS INTRODUCED:
See Index
Amends the Illinois Funeral or Burial Funds Act. Restores a provision that allows persons holding less than $500,000 in trust funds to continue to act as the trustee after the funds are deposited. Provides that a pre-need contract must, if funded by a trust, clearly identify the trustee's name and address and the primary state or federal regulator of the trustee. Provides that a trustee may be the seller or provider of funeral services or merchandise if the seller holds sales of less than $500,000 in trust and deposits funds for which the seller is acting as trustee according in a certain manner. Provides that if a purchaser selects a trust arrangement to fund the pre-need contract, the trust must be maintained: (1) in a deposit account maintained by the seller as trustee in a bank, savings and loan association, savings bank, or credit union authorized to do business in Illinois in which accounts are insured by an agency of the federal government, (2) in a trust company authorized to do business in Illinois, or (3) with a corporate fiduciary as defined in the Corporate Fiduciary Act. Restores a provision that allows trust funds to be maintained in a financial institution located in a state adjoining Illinois if certain conditions are met. Provides that a trustee has a duty to manage the trust and, with respect to the investment of trust funds, shall exercise certain judgment and care. Provides that the trustee has a duty to manage and invest the assets pursuant to the Prudent Investor Rule under the Trusts and Trustees Act if the amount of funds to be entrusted exceeds $1,000,000. Amends the Illinois Pre-Need Cemetery Sales Act. Removes language that provides that the seller must retain a corporate fiduciary as an independent trustee for any amount of trust funds. Provides that a trust established under the Act must be maintained: (1) in a deposit account maintained by the seller as trustee in a bank, savings and loan association, or credit union authorized to do business in Illinois in which accounts are insured by an agency of the federal government, (2) in a trust company authorized to do business in Illinois, or (3) in an investment company authorized to do business in Illinois insured by the Securities Brokers Insurance Corporation.
LRB097 15784 CEL 60928 b
A BILL FOR
HB4041 LRB097 15784 CEL 60928 b
AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Funeral or Burial Funds Act is
amended by changing Sections 1, 1a-1, 1b, 2, and 4a as follows:
(225 ILCS 45/1) (from Ch. 111 1/2, par. 73.101)
Sec. 1. Payment under pre-need contract. Except as
otherwise provided in this Section, all sales proceeds paid to
any person, partnership, association or corporation with
respect to merchandise or services covered by this Act, upon
any agreement or contract, or any series or combination of
agreements or contracts, which has for a purpose the furnishing
or performance of funeral services, or the furnishing or
delivery of any personal property, merchandise, or services of
any nature in connection with the final disposition of a dead
human body, including, but not limited to, outer burial
containers, urns, combination casket-vault units, caskets and
clothing, for future use at a time determinable by the death of
the person or persons whose body or bodies are to be so
disposed of, shall be held to be trust funds, and shall be
placed in trust in accordance with Sections 1b and 2, or shall
be used to purchase life insurance or annuities in accordance
with Section 2a. The person, partnership, association or

HB4041 - 2 - LRB097 15784 CEL 60928 b
corporation receiving said payments under a pre-need contract
is hereby declared to be a trustee thereof until deposits of
funds are made in accordance with Section 1b or 2a of this Act.
Persons holding less than $500,000 in trust funds may continue
to act as the trustee after the funds are deposited in
accordance with subsection (d) of Section 1b.
Nothing in this Act shall be construed to prohibit the
inclusion of outer burial containers in sales contracts under
the Illinois Pre-Need Cemetery Sales Act.
(Source: P.A. 96-879, eff. 2-2-10.)
(225 ILCS 45/1a-1)
Sec. 1a-1. Pre-need contracts.
(a) It shall be unlawful for any seller doing business
within this State to accept sales proceeds from a purchaser,
either directly or indirectly by any means, unless the seller
enters into a pre-need contract with the purchaser which meets
the following requirements:
(1) It states the name and address of the principal
office of the seller and the parent company of the seller,
if any.
(1.5) If funded by a trust, it clearly identifies the
trustee's name and address and the primary state or federal
regulator of the trustee as a corporate fiduciary.
(1.7) If funded by life insurance, it clearly
identifies the life insurance provider and the primary

HB4041 - 3 - LRB097 15784 CEL 60928 b
regulator of the life insurance provider.
(2) It clearly identifies the provider's name and
address, the purchaser, and the beneficiary, if other than
the purchaser.
(2.5) If the provider has branch locations, the
contract gives the purchaser the opportunity to identify
the branch at which the funeral will be provided.
(3) It contains a complete description of the funeral
merchandise and services to be provided and the price of
the merchandise and services, and it clearly discloses
whether the price of the merchandise and services is
guaranteed or not guaranteed as to price.
(A) Each guaranteed price contract shall contain
the following statement in 12 point bold type:
THIS CONTRACT GUARANTEES THE BENEFICIARY THE
SPECIFIC GOODS AND SERVICES CONTRACTED FOR. NO
ADDITIONAL CHARGES MAY BE REQUIRED. FOR DESIGNATED
GOODS AND SERVICES, ADDITIONAL CHARGES MAY BE INCURRED
FOR UNEXPECTED EXPENSES INCLUDING, BUT NOT LIMITED TO,
CASH ADVANCES, SHIPPING OF REMAINS FROM A DISTANT
PLACE, OR DESIGNATED HONORARIA ORDERED OR DIRECTED BY
SURVIVORS.
(B) Except as provided in subparagraph (C) of this
paragraph (3), each non-guaranteed price contract
shall contain the following statement in 12 point bold
type:

HB4041 - 4 - LRB097 15784 CEL 60928 b
THIS CONTRACT DOES NOT GUARANTEE THE PRICE THE
BENEFICIARY WILL PAY FOR ANY SPECIFIC GOODS OR
SERVICES. ANY FUNDS PAID UNDER THIS CONTRACT ARE ONLY A
DEPOSIT TO BE APPLIED TOWARD THE FINAL PRICE OF THE
GOODS OR SERVICES CONTRACTED FOR. ADDITIONAL CHARGES
MAY BE REQUIRED.
(C) If a non-guaranteed price contract may
subsequently become guaranteed, the contract shall
clearly disclose the nature of the guarantee and the
time, occurrence, or event upon which the contract
shall become a guaranteed price contract.
(4) It provides that if the particular supplies and
services specified in the pre-need contract are
unavailable at the time of delivery, the provider shall be
required to furnish supplies and services similar in style
and at least equal in quality of material and workmanship.
(5) It discloses any penalties or restrictions,
including but not limited to geographic restrictions or the
inability of the provider to perform, on the delivery of
merchandise, services, or pre-need contract guarantees.
(6) Regardless of the method of funding the pre-need
contract, the following must be disclosed:
(A) Whether the pre-need contract is to be funded
by a trust, life insurance, or an annuity;
(B) The nature of the relationship among the person
funding the pre-need contract, the provider, and the

HB4041 - 5 - LRB097 15784 CEL 60928 b
seller; and
(C) The impact on the pre-need contract of (i) any
changes in the funding arrangement including but not
limited to changes in the assignment, beneficiary
designation, or use of the funds; (ii) any specific
penalties to be incurred by the contract purchaser as a
result of failure to make payments; (iii) penalties to
be incurred or moneys or refunds to be received as a
result of cancellations; and (iv) all relevant
information concerning what occurs and whether any
entitlements or obligations arise if there is a
difference between the proceeds of the particular
funding arrangement and the amount actually needed to
pay for the funeral at-need.
(D) The method of changing the provider.
(b) All pre-need contracts are subject to the Federal Trade
Commission Rule concerning the Cooling-Off Period for
Door-to-Door Sales (16 CFR Part 429).
(c) No pre-need contract shall be sold in this State unless
there is a provider for the services and personal property
being sold. If the seller is not a provider, then the seller
must have a binding agreement with a provider, and the identity
of the provider and the nature of the agreement between the
seller and the provider shall be disclosed in the pre-need
contract at the time of the sale and before the receipt of any
sales proceeds. The failure to disclose the identity of the

HB4041 - 6 - LRB097 15784 CEL 60928 b
provider, the nature of the agreement between the seller and
the provider, or any changes thereto to the purchaser and
beneficiary, or the failure to make the disclosures required in
subdivision (a)(1), constitutes an intentional violation of
this Act.
(d) All pre-need contracts must be in writing in at least
11 point type, numbered, and executed in duplicate. A signed
copy of the pre-need contract must be provided to the purchaser
at the time of entry into the pre-need contract. The
Comptroller may by rule develop a model pre-need contract form
that meets the requirements of this Act.
(e) The State Comptroller shall by rule develop a booklet
for consumers in plain English describing the scope,
application, and consumer protections of this Act. After the
adoption of these rules, no pre-need contract shall be sold in
this State unless (i) the seller distributes to the purchaser
prior to the sale a booklet promulgated or approved for use by
the State Comptroller; (ii) the seller explains to the
purchaser the terms of the pre-need contract prior to the
purchaser signing; and (iii) the purchaser initials a statement
in the contract confirming that the seller has explained the
terms of the contract prior to the purchaser signing.
(f) All sales proceeds received in connection with a
pre-need contract shall be deposited into a trust account as
provided in Section 1b and Section 2 of this Act, or shall be
used to purchase a life insurance policy or tax-deferred

HB4041 - 7 - LRB097 15784 CEL 60928 b
annuity as provided in Section 2a of this Act.
(g) No pre-need contract shall be sold in this State unless
it is accompanied by a funding mechanism permitted under this
Act, and unless the seller is licensed by the Comptroller as
provided in Section 3 of this Act. Nothing in this Act is
intended to relieve sellers of pre-need contracts from being
licensed under any other Act required for their profession or
business, and being subject to the rules promulgated to
regulate their profession or business, including rules on
solicitation and advertisement.
(Source: P.A. 96-879, eff. 2-2-10.)
(225 ILCS 45/1b) (from Ch. 111 1/2, par. 73.101b)
Sec. 1b. (a) Whenever a seller receives sales proceeds
under a pre-need contract that the purchaser elects to fund by
a trust agreement, the seller may retain an initial amount
equal to 5% of the purchase price of the services, personal
property or merchandise, or 15% of the purchase price of outer
burial containers. Thereafter, a seller shall deposit into
trust the amounts specified in this Section so that no later
than upon the final payment on the contract, the trust shall
equal or exceed 95% of the purchase price of all services,
personal property, or merchandise, except for outer burial
containers, and 85% of the purchase price of outer burial
containers.
(b) In the event that sales proceeds to be deposited into a

HB4041 - 8 - LRB097 15784 CEL 60928 b
trust are received pursuant to a cash sale or an installment
contract, the seller may retain the initial percentage
authorized by subsection (a) of this Section, and thereafter
shall deposit into the trust the entire balance of sales
proceeds received.
(c) In the event that the deposits into a trust required by
this Section do not, after final payment by the consumer,
result in the trust containing at least 95% of the purchase
price of all services, personal property or merchandise, except
for outer burial containers and 85% of the purchase price of
outer burial containers, the seller shall make an additional
deposit into the trust in an amount sufficient to meet these
percentages.
(d) The trustee may not be the seller or provider of
funeral services or merchandise unless the seller holds sales
of less than $500,000 in trust, and deposits funds for which
the seller is acting as trustee in (1) withdrawable accounts of
State chartered or federally chartered savings and loan
associations insured by the Federal Deposit Insurance
Corporation; (2) deposits or certificates of deposits in State
or federal banks insured by the Federal Deposit Insurance
Corporation; or (3) share accounts or share certificate
accounts in a State or federal credit union, the accounts of
which are insured as required by the Illinois Credit Union Act
or the Federal Credit Union Act, as applicable.
(Source: P.A. 96-879, eff. 2-2-10.)

HB4041 - 9 - LRB097 15784 CEL 60928 b
(225 ILCS 45/2) (from Ch. 111 1/2, par. 73.102)
Sec. 2. (a) If a purchaser selects a trust arrangement to
fund the pre-need contract, all trust deposits as determined by
Section 1b shall be made within 30 days of receipt.
(b) A trust established under this Act must be maintained:
(1) in a deposit account maintained by the seller as
trustee in a bank, savings and loan association, savings
bank, or credit union authorized to do business in Illinois
in which accounts are insured by an agency of the federal
government;
(2) in a trust company authorized to do business in
Illinois; or
(3) with a corporate fiduciary as defined in Section
1-5.05 of the Corporate Fiduciary Act or with a foreign
corporate fiduciary recognized by Article IV of the
Corporate Fiduciary Act.
(c) Trust agreements and amendments to the trust agreements
used to fund a pre-need contract shall be filed with the
Comptroller.
(d) (Blank).
(e) A seller or provider shall furnish to the trustee and
depositary the name of each payor and the amount of payment on
each such account for which deposit is being so made. Nothing
shall prevent the trustee or a seller or provider acting as a
trustee in accordance with this Act from commingling the

HB4041 - 10 - LRB097 15784 CEL 60928 b
deposits in any such trust fund for purposes of its management
and the investment of its funds as provided in the Common Trust
Fund Act. In addition, multiple trust funds maintained under
this Act may be commingled or commingled with other funeral or
burial related trust funds if all record keeping requirements
imposed by law are met.
(f) Trust funds may be maintained in a financial
institution described in subsection (b) that is located in a
state adjoining this State where: (1) the financial institution
is located within 50 miles of the border of this State, (2) its
accounts are federally insured, and (3) it has registered with
the Illinois Secretary of State for purposes of service of
process. (Blank).
(g) Upon no less than 30 days prior notice to the
Comptroller, the seller may change the trustee of the fund.
Failure to provide the Comptroller with timely prior notice is
an intentional violation of this Act.
(h) A trustee shall at least annually furnish to each
purchaser a statement (1) containing the account value of the
trust as of the date of the statement : (1) the receipts,
disbursements, and inventory of the trust, including an
explanation of any fees or expenses charged by the trustee
under Section 5 of this Act or otherwise, (2) an explanation of
the purchaser's right to a refund, if any, under this Act, and
(2) (3) identifying the primary regulator of the trust as a
corporate fiduciary under state or federal law.

HB4041 - 11 - LRB097 15784 CEL 60928 b
(Source: P.A. 96-879, eff. 2-2-10; 97-593, eff. 8-26-11.)
(225 ILCS 45/4a)
Sec. 4a. Investment of funds.
(a) A trustee has a duty to invest and manage the trust
and, with respect to the investment of trust funds, shall
exercise the judgment and care under the circumstances then
prevailing that persons of prudence, discretion, and
intelligence exercise in the management of their own affairs,
not in regard to speculation, but in regard to the permanent
disposition of their funds, considering the probable income as
well as the probable safety of their capital. If the amount of
the funds to be entrusted exceeds $1,000,000, then the trustee
has the duty to manage and invest the assets pursuant to the
Prudent Investor Rule under the Trusts and Trustees Act.
(b) The trust shall be a single-purpose trust fund. In the
event of the seller's bankruptcy, insolvency or assignment for
the benefit of creditors, or an adverse judgment, the trust
funds shall not be available to any creditor as assets of the
seller or to pay any expenses of any bankruptcy or similar
proceeding, but shall be distributed to the purchasers or
managed for their benefit by the trustee holding the funds.
Except in an action by the Comptroller to revoke a license
issued pursuant to this Act and for creation of a receivership
as provided in this Act, the trust shall not be subject to
judgment, execution, garnishment, attachment, or other seizure

HB4041 - 12 - LRB097 15784 CEL 60928 b
by process in bankruptcy or otherwise, nor to sale, pledge,
mortgage, or other alienation, and shall not be assignable
except as approved by the Comptroller. The changes made by
Public Act 91-7 are intended to clarify existing law regarding
the inability of licensees to pledge the trust.
(c) Because it is not known at the time of deposit or at
the time that income is earned on the trust account to whom the
principal and the accumulated earnings will be distributed for
the purpose of determining the Illinois income tax due on these
trust funds, the principal and any accrued earnings or losses
related to each individual account shall be held in suspense
until the final determination is made as to whom the account
shall be paid. The beneficiary's estate shall not be
responsible for any funeral and burial purchases listed in a
pre-need contract if the pre-need contract is entered into on a
guaranteed price basis.
If a pre-need contract is not a guaranteed price contract,
then to the extent the proceeds of a non-guaranteed price
pre-need contract cover the funeral and burial expenses for the
beneficiary, no claim may be made against the estate of the
beneficiary. A claim may be made against the beneficiary's
estate if the charges for the funeral services and merchandise
at the time of use exceed the amount of the amount in trust
plus the percentage of the sale proceeds initially retained by
the seller or the face value of the life insurance policy or
tax-deferred annuity.

HB4041 - 13 - LRB097 15784 CEL 60928 b
(Source: P.A. 96-879, eff. 2-2-10.)
Section 10. The Illinois Pre-Need Cemetery Sales Act is
amended by changing Sections 14 and 15 as follows:
(815 ILCS 390/14) (from Ch. 21, par. 214)
Sec. 14. Contract required.
(a) It is unlawful for any person doing business within
this State to accept sales proceeds, either directly or
indirectly, by any means unless the seller enters into a
pre-need sales contract with the purchaser which meets the
following requirements:
(1) A written sales contract shall be executed in at
least 11 point type in duplicate for each pre-need sale
made by a licensee, and a signed copy given to the
purchaser. Each completed contract shall be numbered and
shall contain: (i) the name and address of the purchaser,
the principal office of the licensee, and the parent
company of the licensee; (ii) the name of the person, if
known, who is to receive the cemetery merchandise, cemetery
services or the completed interment, entombment or
inurnment spaces under the contract; and (iii) specific
identification of such merchandise, services or spaces to
be provided, if a specific space or spaces are contracted
for, and the price of the merchandise, services, or space
or spaces.

HB4041 - 14 - LRB097 15784 CEL 60928 b
(2) In addition, such contracts must contain a
provision in distinguishing typeface as follows:
"Notwithstanding anything in this contract to the
contrary, you are afforded certain specific rights of
cancellation and refund under the Illinois Pre-Need
Cemetery Sales Act, enacted by the 84th General Assembly of
the State of Illinois".
(3) All pre-need sales contracts shall be sold on a
guaranteed price basis. At the time of performance of the
service or delivery of the merchandise, the seller shall be
prohibited from assessing the purchaser or his heirs or
assigns or duly authorized representative any additional
charges for the specific merchandise and services listed on
the pre-need sales contract.
(4) Each contract shall clearly disclose that the price
of the merchandise or services is guaranteed and shall
contain the following statement in 12 point bold type:
"THIS CONTRACT GUARANTEES THE BENEFICIARY THE SPECIFIC
GOODS, SERVICES, INTERMENT SPACES, ENTOMBMENT SPACES, AND
INURNMENT SPACES CONTRACTED FOR. NO ADDITIONAL CHARGES MAY
BE REQUIRED FOR DESIGNATED GOODS, SERVICES, AND SPACES.
ADDITIONAL CHARGES MAY BE INCURRED FOR UNEXPECTED
EXPENSES."
(5) The pre-need sales contract shall provide that if
the particular cemetery services, cemetery merchandise, or
spaces specified in the pre-need contract are unavailable

HB4041 - 15 - LRB097 15784 CEL 60928 b
at the time of delivery, the seller shall be required to
furnish services, merchandise, and spaces similar in style
and at least equal in quality of material and workmanship.
(6) The pre-need contract shall also disclose any
specific penalties to be incurred by the purchaser as a
result of failure to make payments; and penalties to be
incurred or moneys or refunds to be received as a result of
cancellation of the contract.
(7) The pre-need contract shall disclose the nature of
the relationship between the provider and the seller.
(8) Each pre-need contract that authorizes the
delivery of cemetery merchandise to a licensed and bonded
warehouse shall provide that prior to or upon delivery of
the merchandise to the warehouse the title to the
merchandise and a warehouse receipt shall be delivered to
the purchaser or beneficiary. The pre-need contract shall
contain the following statement in 12 point bold type:
"THIS CONTRACT AUTHORIZES THE DELIVERY OF MERCHANDISE TO A
LICENSED AND BONDED WAREHOUSE FOR STORAGE OF THE
MERCHANDISE UNTIL THE MERCHANDISE IS NEEDED BY THE
BENEFICIARY. DELIVERY OF THE MERCHANDISE IN THIS MANNER MAY
PRECLUDE REFUND OF SALE PROCEEDS THAT ARE ATTRIBUTABLE TO
THE DELIVERED MERCHANDISE."
The purchaser shall initial the statement at the time
of entry into the pre-need contract.
(9) Each pre-need contract that authorizes the

HB4041 - 16 - LRB097 15784 CEL 60928 b
placement of cemetery merchandise at the site of its
ultimate use prior to the time that the merchandise is
needed by the beneficiary shall contain the following
statement in 12 point bold type:
"THIS CONTRACT AUTHORIZES THE PLACEMENT OF MERCHANDISE AT
THE SITE OF ITS ULTIMATE USE PRIOR TO THE TIME THAT THE
MERCHANDISE IS NEEDED BY THE BENEFICIARY. DELIVERY OF THE
MERCHANDISE IN THIS MANNER MAY PRECLUDE REFUND OF SALE
PROCEEDS THAT ARE ATTRIBUTABLE TO THE DELIVERED
MERCHANDISE."
The purchaser shall initial the statement at the time
of entry into the pre-need contract.
(10) Each pre-need contract that is funded by a trust
shall clearly identify the trustee's name and address and
the primary state or federal regulator of the trustee as a
corporate fiduciary.
(b) Every pre-need sales contract must be in writing. The
Comptroller may by rule develop a model pre-need sales contract
form that meets the requirements of this Act.
(c) To the extent the Rule is applicable, every pre-need
sales contract is subject to the Federal Trade Commission Rule
concerning the Cooling-Off Period for Door-to-Door Sales (16
CFR Part 429).
(d) No pre-need sales contract may be entered into in this
State unless there is a provider for the cemetery merchandise,
cemetery services, and undeveloped interment, inurnment, and

HB4041 - 17 - LRB097 15784 CEL 60928 b
entombment spaces being sold. If the seller is not the
provider, then the seller must have a binding agreement with a
provider, and the identity of the provider and the nature of
the agreement between the seller and the provider must be
disclosed in the pre-need sales contract at the time of sale
and before the receipt of any sale proceeds. The failure to
disclose the identity of the provider, the nature of the
agreement between the seller and the provider, or any changes
thereto to the purchaser and beneficiary, or the failure to
make the disclosures required by this Section constitutes an
intentional violation of this Act.
(e) No pre-need contract may be entered into in this State
unless it is accompanied by a funding mechanism permitted under
this Act and unless the seller is licensed by the Comptroller
as provided in this Act. Nothing in this Act is intended to
relieve providers or sellers of pre-need contracts from being
licensed under any other Act required for their profession or
business or from being subject to the rules promulgated to
regulate their profession or business, including rules on
solicitation and advertisement.
(f) No pre-need contract may be entered into in this State
unless the seller explains to the purchaser the terms of the
pre-need contract prior to the purchaser signing and the
purchaser initials a statement in the contract confirming that
the seller has explained the terms of the contract prior to the
purchaser signing.

HB4041 - 18 - LRB097 15784 CEL 60928 b
(g) The State Comptroller shall develop a booklet for
consumers in plain English describing the scope, application,
and consumer protections of this Act. After the booklet is
developed, no pre-need contract may be sold in this State
unless the seller distributes to the purchaser prior to the
sale a booklet developed or approved for use by the State
Comptroller.
(Source: P.A. 96-879, eff. 2-2-10.)
(815 ILCS 390/15) (from Ch. 21, par. 215)
Sec. 15. (a) Whenever a seller receives anything of value
under a pre-need sales contract, the person receiving such
value shall deposit 50% of all proceeds received into one or
more trust funds maintained pursuant to this Section, except
that, in the case of proceeds received for the purchase of
outer burial containers, 85% of the proceeds shall be deposited
into one or more trust funds. Such deposits shall be made until
the amount deposited in trust equals 50% of the sales price of
the cemetery merchandise, cemetery services and undeveloped
spaces included in such contract, except that, in the case of
deposits for outer burial containers, deposits shall be made
until the amount deposited in trust equals 85% of the sales
price. In the event an installment contract is factored,
discounted or sold to a third party, the seller shall deposit
an amount equal to 50% of the sales price of the installment
contract, except that, for the portion of the contract

HB4041 - 19 - LRB097 15784 CEL 60928 b
attributable to the sale of outer burial containers, the seller
shall deposit an amount equal to 85% of the sales price.
Proceeds required to be deposited in trust which are
attributable to cemetery merchandise and cemetery services
shall be held in a "Cemetery Merchandise Trust Fund". Proceeds
required to be deposited in trust which are attributable to the
sale of undeveloped interment, entombment or inurnment spaces
shall be held in a "Pre-construction Trust Fund". If
merchandise is delivered for storage in a bonded warehouse, as
authorized herein, and payment of transportation or other
charges totaling more than $20 will be required in order to
secure delivery to the site of ultimate use, upon such delivery
to the warehouse the seller shall deposit to the trust fund the
full amount of the actual or estimated transportation charge.
Transportation charges which have been prepaid by the seller
shall not be deposited to trust funds maintained pursuant to
this Section. As used in this Section, "all proceeds" means the
entire amount paid by a purchaser in connection with a pre-need
sales contract, including finance charges and Cemetery Care Act
contributions, but excluding sales taxes and credit life
insurance premiums.
(b) The seller shall act as trustee of all amounts received
for cemetery merchandise, services, or undeveloped spaces
until those amounts have been deposited into the trust fund.
All trust deposits required by this Act shall be made within 30
days following the end of the month of receipt. The seller must

HB4041 - 20 - LRB097 15784 CEL 60928 b
retain a corporate fiduciary as an independent trustee for any
amount of trust funds. Upon 30 days' prior written notice from
the seller to the Comptroller, the seller may change the
trustee of the trust fund. Failure to provide the Comptroller
with timely prior notice is an intentional violation of this
Act.
(c) A trust established under this Act must be maintained:
(1) in a deposit account maintained by the seller as
trustee in a bank, savings and loan association, or credit
union authorized to do business in Illinois where such
accounts are insured by an agency of the federal
government;
(2) in a trust company authorized to do business in
Illinois;
(3) in an investment company authorized to do business
in Illinois insured by the Securities Brokers Insurance
Corporation; or
(4) with a corporate fiduciary as defined in Section
1-5.05 of the Corporate Fiduciary Act or with a foreign
corporate fiduciary recognized by Article IV of the
Corporate Fiduciary Act.
(d) Funds deposited in the trust account shall be
identified in the records of the seller by the name of the
purchaser. Nothing shall prevent the trustee from commingling
the deposits in any such trust fund for purposes of the
management thereof and the investment of funds therein as

HB4041 - 21 - LRB097 15784 CEL 60928 b
provided in the "Common Trust Fund Act", approved June 24,
1949, as amended. In addition, multiple trust funds maintained
pursuant to this Act may be commingled or commingled with other
funeral or burial related trust funds, provided that all record
keeping requirements imposed by or pursuant to law are met.
(e) In lieu of a pre-construction trust fund, a seller of
undeveloped interment, entombment or inurnment spaces may
obtain and file with the Comptroller a performance bond in an
amount at least equal to 50% of the sales price of the
undeveloped spaces or the estimated cost of completing
construction, whichever is greater. The bond shall be
conditioned on the satisfactory construction and completion of
the undeveloped spaces as required in Section 19 of this Act.
Each bond obtained under this Section shall have as surety
thereon a corporate surety company incorporated under the laws
of the United States, or a State, the District of Columbia or a
territory or possession of the United States. Each such
corporate surety company must be authorized to provide
performance bonds as required by this Section, have paid-up
capital of at least $250,000 in cash or its equivalent and be
able to carry out its contracts. Each pre-need seller must
provide to the Comptroller, for each corporate surety company
such seller utilizes, a statement of assets and liabilities of
the corporate surety company sworn to by the president and
secretary of the corporation by January 1 of each year.
The Comptroller shall prohibit pre-need sellers from doing

HB4041 - 22 - LRB097 15784 CEL 60928 b
new business with a corporate surety company if the company is
insolvent or is in violation of this Section. In addition the
Comptroller may direct a pre-need seller to reinstate a
pre-construction trust fund upon the Comptroller's
determination that the corporate surety company no longer is
sufficient security.
All performance bonds issued pursuant to this Section must
be irrevocable during the statutory term for completing
construction specified in Section 19 of this Act, unless
terminated sooner by the completion of construction.
(f) Whenever any pre-need contract shall be entered into
and include 1) items of cemetery merchandise and cemetery
services, and 2) rights to interment, inurnment or entombment
in completed spaces without allocation of the gross sale price
among the items sold, the application of payments received
under the contract shall be allocated, first to the right to
interment, inurnment or entombment, second to items of cemetery
merchandise and cemetery services, unless some other
allocation is clearly provided in the contract.
(g) Any person engaging in pre-need sales who enters into a
combination sale which involves the sale of items covered by a
trust or performance bond requirement and any item not covered
by any entrustment or bond requirement, shall be prohibited
from increasing the gross sales price of those items not
requiring entrustment with the purpose of allocating a lesser
gross sales price to items which require a trust deposit or a

HB4041 - 23 - LRB097 15784 CEL 60928 b
performance bond.
(Source: P.A. 96-879, eff. 2-2-10; 97-593, eff. 8-26-11.)
HB4041 - 24 - LRB097 15784 CEL 60928 b
INDEX
Statutes amended in order of appearance