Bill Text: MS HB1365 | 2012 | Regular Session | Introduced
Bill Title: Preneed contract funds; may be deposited in a certificate of deposit as an alternative to a trust account.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2012-03-06 - Died In Committee [HB1365 Detail]
Download: Mississippi-2012-HB1365-Introduced.html
MISSISSIPPI LEGISLATURE
2012 Regular Session
To: Public Health and Human Services; Banking and Financial Services
By: Representative Banks
House Bill 1365
AN ACT TO AMEND SECTION 75-63-59, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT AS AN ALTERNATIVE TO PLACING THE FUNDS FOR A PRENEED CONTRACT IN A TRUST ACCOUNT, WITH THE PRIOR APPROVAL OF THE SECRETARY OF STATE THE CONTRACT SELLER MAY DEPOSIT THE FUNDS IN A CERTIFICATE OF DEPOSIT IN A FINANCIAL INSTITUTION THAT IS INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, WITH THE CERTIFICATE OF DEPOSIT BEING PAYABLE JOINTLY TO THE CONTRACT SELLER AND THE SECRETARY OF STATE; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 75-63-59, Mississippi Code of 1972, is amended as follows:
75-63-59. (1) If the contract is funded by trust, the Secretary of State shall be given a copy of the trust agreement, which the Secretary of State shall review and approve in advance. The Secretary of State may at any time require the submission of the trust agreement for review and approval from any preneed provider. The Secretary of State shall approve in advance any amendments or modifications to the trust agreement. The Secretary of State shall be informed in writing as to how the assets of the trust are held. In the event of any change in the investment composition of the trust assets, or change in the trustee or trust institution, the Secretary of State shall be informed within ten (10) days after the time the change occurs.
(2) Any trustee, other than a financial institution, shall not be the contract provider, the seller, or an officer or director of the contract provider if the contract provider is a corporation.
(3) Not later than the fifth day of the following month from when funds are received, the contract seller shall place in a trust account in a financial institution as defined by this article at least eighty-five percent (85%) of the funds received for funeral services and merchandise, except as otherwise authorized in subsection (8) of this section. The contract shall disclose to the purchaser in bold face type the percentage of funds the seller is required to trust along with the name of the trust officer, the trust institution, the address and phone number of the same. The purchaser shall initial the corresponding paragraph in the contract indicating notice of the trust percentage and acknowledge being provided the name of the trust officer, the trust institution, address and phone number. The contract seller must provide the trustee with documentation containing the contract owner's identity and allocable share for each remittance. Trust accounts shall be carried in the name of the preneed seller, but accounting records shall be established and maintained for each individual preneed funeral contract beneficiary showing the amounts deposited and invested. The Secretary of State may by rule address the recordkeeping required for interest, dividends, increases and accretions earned.
(4) Reasonable annual trust fees including any income taxes owed to the State of Mississippi and/or the United States Treasury may be withheld from the earnings of the trust.
(5) Except as otherwise provided in subsection (8) of this section, at the time of death, if the contract provider provides the merchandise and services indicated in the contract, the contract provider shall furnish to the trustee a copy of the preneed contract, contract owner's death certificate or proof of death, and a letter of performance indicating that the contracted merchandise and services were provided by the contract provider to the contract insured. Upon receipt of the letter of performance and death certificate, or proof of death, the trustee shall pay to the contract provider all funds, which shall not be less than the amount deposited in trust. In the limited instance only when a preneed provider furnishes a personalized, engraved marker, headstone or monument before death, the trustee may disburse to the preneed provider compensation for the engraved marker, headstone or monument as well as any associated engraving, setting or delivery fees. In those instances, no disbursement from the trust shall be made until the trustee receives from the preneed provider a delivery ticket or invoice, documentation for the engraving of identifying information regarding the purchaser, and a letter of performance indicating that the engraved marker, headstone or monument has been provided.
Any trust officer or trust institution that releases trust funds for funeral services or merchandise in a manner contrary with the provisions of this article shall be liable for the same. Furthermore, any trustee or trust institution that engages in fraud, deceit, misrepresentation, or misappropriation of trust funds to the detriment of a contract provider or a contract insured shall be liable for the same.
(6) Except as otherwise provided in subsection (8) of this section, if the contract provider does not furnish merchandise and services as provided in the preneed contract, the trustee shall pay to the estate of the contract insured or the substitute provider not less than the amount deposited in trust, within ten (10) days from notification of the death of the contract insured.
(7) Preneed trust funds are exempt from all claims of creditors of the preneed provider, except as to the claims of the contract purchaser or his representatives, and cannot be used as collateral, pledged or in any way encumbered or placed at risk.
(8) (a) As an alternative to placing the funds in a trust account as required under subsection (3) of this section, with the prior approval of the Secretary of State the contract seller may deposit the same percentage of the funds required to be placed in a trust account in a certificate of deposit in a financial institution that is insured by the Federal Deposit Insurance Corporation. The contract seller shall have the certificate of deposit payable jointly to the contract seller and the Secretary of State.
(b) At the time of death, if the contract provider provides the merchandise and services indicated in the contract, the contract provider shall provide to the Secretary of State the contract owner's death certificate or proof of death, and a letter of performance indicating that the contracted merchandise and services were provided by the contract provider to the contract insured. Upon receipt of the letter of performance and death certificate, or proof of death, the Secretary of State shall authorize the payment of all of the funds from the certificate of deposit to the contract provider.
(c) If the contract provider does not furnish merchandise and services as provided in the preneed contract, the Secretary of State shall provide for the payment of all of the funds in the certificate of deposit to the estate of the contract insured or the substitute provider, within ten (10) days from notification of the death of the contract insured.
(d) The other provisions of this chapter that are applicable to funds in trust shall also apply to funds deposited in a certificate of deposit as authorized in this subsection, to the extent as determined by the Secretary of State.
SECTION 2. This act shall take effect and be in force from and after July 1, 2012.
