Bill Text: MS HB677 | 2015 | Regular Session | Introduced
Bill Title: Cemeteries and preneed contracts; require those covered or funded by a trust to have surety bond to protect owners or insureds.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Failed) 2015-02-03 - Died In Committee [HB677 Detail]
Download: Mississippi-2015-HB677-Introduced.html
MISSISSIPPI LEGISLATURE
2015 Regular Session
To: Public Health and Human Services; Judiciary A
By: Representative Bain
House Bill 677
AN ACT TO AMEND SECTION 41-43-37, MISSISSIPPI CODE OF 1972, TO REQUIRE THE OWNER OF EVERY PERPETUAL CARE CEMETERY SUBJECT TO THE CEMETERY LAW TO FILE WITH THE SECRETARY OF STATE A SURETY BOND IN THE SUM OF FIVE HUNDRED THOUSAND DOLLARS FOR THE BENEFIT OF ANY OWNER OR PURCHASER, OR THE FAMILY, LEGAL REPRESENTATIVE OR NEXT OF KIN OF ANY SUCH OWNER OR PURCHASER, OF ANY LOT, PLOT, GRAVE, CRYPT, NICHE OR BURIAL SPACE WITHIN THE CEMETERY, WHEN THE CEMETERY IS INSOLVENT OR ABOUT TO BECOME INSOLVENT, OR NO PERPETUAL CARE TRUST FUND HAS BEEN ESTABLISHED FOR THE CEMETERY OR, IF ESTABLISHED, THE TRUST FUND DOES NOT CONTAIN THE FUNDS AS ARE REQUIRED TO BE CONTAINED IN THE TRUST FUND; TO AMEND SECTION 41-43-38, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT ANY SUCH PERSON MAY CLAIM AGAINST THE BOND FOR ANY LOSSES OR DAMAGES SUSTAINED BY THE PERSON; TO AMEND SECTION 73-63-59, MISSISSIPPI CODE OF 1972, TO REQUIRE SELLERS OF PRENEED CONTRACTS THAT ARE FUNDED BY TRUST TO FILE WITH THE SECRETARY OF STATE A SURETY BOND IN THE SUM OF FIVE HUNDRED THOUSAND DOLLARS, OR SUCH LOWER AMOUNT AS PRESCRIBED BY THE SECRETARY OF STATE, FOR THE BENEFIT OF THE CONTRACT INSURED OR THE BENEFICIARIES OR ESTATE OF THE CONTRACT INSURED FOR FINANCIAL LOSS OR OTHER DAMAGES SUFFERED AS A RESULT OF IMPROPER ACTIONS OF A CONTRACT PROVIDER OR IMPROPER USE OF TRUST FUNDS OR THE INSOLVENCY OF THE TRUST; TO BRING FORWARD SECTION 75-63-81, MISSISSIPPI CODE OF 1972, FOR THE PURPOSES OF POSSIBLE AMENDMENT; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 41-43-37, Mississippi Code of 1972, is amended as follows:
41-43-37. (1) The owner of every cemetery, subject to the provisions of Section 41-43-31 et seq., that is organized, begins or continues to do business in the State of Mississippi after July 1, 2009, shall provide for the creation and establishment of an irrevocable perpetual care trust fund, the principal of which shall permanently remain intact except as hereinafter provided and only the income thereof shall be devoted to the perpetual care of the cemetery. The perpetual care trust fund shall not be subject to the claims of the cemetery's creditors and shall not be used as collateral, pledged, encumbered or placed at risk. This fund shall be created and established as follows:
(a) In respect to a cemetery for earth burials, by the application and payment thereto of an amount equivalent to fifteen percent (15%) of the sale price, or Forty Cents (40¢) per square foot of ground interment rights sold, whichever is greater;
(b) In respect to an above-ground community or public mausoleum, by the application and payment thereto of an amount equivalent to five percent (5%) of the sale price, or Fifty Dollars ($50.00) per crypt sold, whichever is greater;
(c) In respect to the placement of an above-ground, free-standing or private mausoleum, by the application and payment thereof of an amount equivalent to fifteen percent (15%) of the sale price for the ground interment right upon which the private mausoleum is installed and five percent (5%) of the sales price as determined by the customer's invoice for the purchase price of the private mausoleum; and
(d) In respect to a community columbarium, by the application and payment thereto of an amount equivalent to five percent (5%) of the sale price, or Ten Dollars ($10.00) per niche sold, whichever is greater.
For any sale of a lot for an earth burial, mausoleum crypt or columbarium niche in which payment is made by the purchaser on an installment basis over time, the percentage required to be trusted shall be paid into the perpetual care trust fund calculated on each payment.
(2) From the sale price the owner shall pay to the perpetual care fund an amount in proportion to the requirements in subsection (1) of this section, which payment shall be in cash, check, money order or electronic transfer and shall be deposited with the custodian or trustee of the fund not later than the fifth day of the following month from when funds are received.
(3) If the perpetual care trust fund principal is Fifty Thousand Dollars ($50,000.00) or less, a perpetual care cemetery may maintain certificates of deposit that mature every thirty (30) days issued by an institution whose deposits are insured by the Federal Deposit Insurance Corporation. Certificates of deposits held by a cemetery for perpetual care under this subsection shall renew automatically with all earned interest added to principal for each successive renewal. Collections owed to trust from sales under subsection (1) of this section shall be added upon the next maturity date of the certificate rather than the fifth day of the following month as required by subsection (2) of this section. Certificates of deposit meeting the requirements of this subsection shall contain the words, "For Perpetual Care," in the caption of the certificate. Each perpetual care cemetery electing to maintain certificates of deposit under this subsection shall file documentation from the issuer with the Office of the Secretary of State with the submission of the annual report. Once the perpetual care principal from the cemetery's operations exceeds Fifty Thousand Dollars ($50,000.00), such funds shall be held in an irrevocable trust managed by a trustee and governed by a trust instrument.
(4) In addition to the provisions of subsections (1) and (2) of this section, any cemetery organized after July 1, 2009, or any mausoleum or columbarium that is built at any location other than upon property owned by an existing cemetery after that date, whether it is by incorporation, association, individually or by any other means, or having its first burial after that date, shall, before disposing of any burial lot or right or making any sale thereof and/or making its first burial, cause to be deposited the sum of Twenty-five Thousand Dollars ($25,000.00) in cash into an irrevocable perpetual care trust fund as provided in subsection (1) of this section for the maintenance of the cemetery.
(5) Whenever the cemetery has deposited in the perpetual care fund, as required by this section, a sum amounting to Fifty Thousand Dollars ($50,000.00), it shall submit proof of that fact to its trustee, and it shall be the duty of the trustee to thereupon pay over to the cemetery the amount of Twenty-five Thousand Dollars ($25,000.00) so originally deposited by it in the perpetual care fund.
(6) The perpetual care fund shall be permanently set aside in trust to be administered under the jurisdiction of the Secretary of State. The Secretary of State shall have full jurisdiction over the reports and accounting of trustees and the amount of a surety bond required, if any. The trust officer or trustee responsible for the investment of funds shall be affiliated with an established bank, trust company, other financial institution or financial services company. Only the income from the fund shall be used for the care and maintenance of the cemetery for which it was established.
(7) The owner of every cemetery subject to the provisions of Section 41-43-31 et seq. shall file with the Secretary of State a surety bond in which the owner is the principal obligor, in the sum of Five Hundred Thousand Dollars ($500,000.00), or such lower amount as prescribed by the Secretary of State, with one or more surety companies licensed to do business in this state whose liability in the aggregate will be equal to that sum. The bond shall be in favor of the State of Mississippi for the benefit of any owner or purchaser, or the family, legal representative or next of kin of any such owner or purchaser, of any lot, plot, grave, crypt, niche or burial space within the cemetery, when (a) the cemetery is insolvent or about to become insolvent, or (b) no perpetual care trust fund has been established for the cemetery or, if established, the trust fund does not contain the funds as are required to be contained in the trust fund. Any person claiming against the bond may maintain an action against the cemetery and the surety.
( * * *8) Each geographic location of a
cemetery shall constitute a separate and distinct cemetery for the purpose of
interpretation and application of this section.
( * * *9) The Secretary of State shall
develop and implement a registration system for perpetual care cemeteries
subject to this chapter. The Secretary of State is authorized to promulgate
rules and regulations for the development and implementation of a statewide
registry and to collect a registration fee not to exceed Twenty-five Dollars
($25.00) per year to be paid at the same time as the reports and accountings
required by Section 41-43-38 are due.
( * * *10) To assist with the development of
a statewide registry of perpetual care cemeteries, the county boards of
supervisors in conjunction with the chancery clerks shall provide the Secretary
of State with a list of all perpetual care cemeteries and other pertinent
information regarding perpetual care cemeteries situated in their respective
counties no later than October 31, 2009.
SECTION 2. Section 41-43-38, Mississippi Code of 1972, is amended as follows:
41-43-38. (1) The provisions of this section shall apply to every cemetery that is required to establish and maintain a perpetual care trust fund as provided in Section 41-43-37.
(2) By March 31 of each year, each perpetual care cemetery not exempt by Section 41-43-33 shall file with the Secretary of State the following information:
(a) The name of the cemetery, the date of incorporation, if incorporated, and the location of the cemetery or cemeteries owned;
(b) The amounts of sales of cemetery lots, grave spaces, mausoleum crypts or columbarium niches for which payment has been made in full or deeds of conveyance or perpetual easements issued thereon during the preceding calendar year;
(c) The amounts paid into the perpetual care fund, and the income earned therefrom during the preceding calendar year;
(d) The number of acres embraced within each cemetery and held by the cemetery for cemetery purposes; and
(e) The names and addresses of the owners of the cemetery or the officers and directors of the corporation and any change of control that occurred during the preceding calendar year.
(3) The custodian or trustee of the perpetual care fund of each cemetery shall annually prepare and file with the Secretary of State a detailed accounting and report of the fund on or before March 31 of each year for the preceding calendar year. The accounting and report shall contain a properly itemized description of the securities in which the monies of the perpetual care fund are invested, the fund value, and any changes in the investment portfolio from the prior year's report. The accounting and report shall be at all times available to inspection and copy by any owner of a burial right in the cemetery, or the family, legal representative or next of kin of the owner, at the usual place for transacting the regular business of the cemetery.
For each day that the report and accounting required by subsections (2) and (3) of this section are late, the Secretary of State is authorized to charge a late fee of Ten Dollars ($10.00) per day.
(4) As a condition to the transfer of any perpetual care trust fund monies from one (1) trustee or trust institution to another, the cemetery for which the fund is maintained shall, not less than thirty (30) days before the time when the transfer is to occur, file with the Secretary of State a written notice of intent to transfer accompanied with a letter of intent to receive the trust fund monies from the trustee or trust institution to which the trust fund monies are to be transferred. The fund monies shall be transferred directly from the existing custodian or trustee to the receiving custodian or trustee only after approval has been issued in writing by the Secretary of State or his representative.
(5) Before any sale or transfer of a perpetual care cemetery or a controlling interest therein, an independent audit of the perpetual care trust fund shall be performed at the expense of the seller and/or buyer or transferor and transferee and filed with the Secretary of State. The audit shall be current within thirty (30) days of the proposed sale or transfer. No sale or transfer of any perpetual care cemetery shall occur until approved in writing by the Secretary of State or his representative.
(6) The Secretary of State shall, upon the failure to timely receive any of the records, reports or notices provided for in this section, immediately give notice by certified letter or hand delivery to the last known cemetery owner or owners, or, if incorporated, its officers and directors, at its or their last known address, that those records, reports or notices have not been received. Failure of those persons to file the records, reports or notices within fifteen (15) days after receipt of the certified letter or hand delivery shall, in the absence of clear justification or excuse, constitute a misdemeanor and each owner of the cemetery and, if incorporated, its officers and directors, shall be subject to the penalties provided for in Section 41-43-53.
(7) Whenever it reasonably appears to the Secretary of State, any owner or purchaser, or the family, legal representative or next of kin of any such owner or purchaser, of any lot, plot, grave, crypt, niche or burial space within a perpetual care cemetery, that (a) the cemetery is insolvent or about to become insolvent; or (b) no perpetual care trust fund has been established for the cemetery or, if established, the trust fund does not contain the funds as are required to be contained therein, that party may bring an action in the chancery court in the county in which the cemetery is located. Upon a proper showing, the court shall order a private audit and examination of any perpetual care trust fund of the cemetery and of all the books, records and papers employed in the transaction of the cemetery business.
If the audit and examination show that the cemetery is insolvent or is about to become insolvent, or that a sufficient trust fund is not established or being maintained for the cemetery, the court shall exercise any jurisdiction and make and issue any orders and decrees as may be necessary to correct and enforce compliance with the provisions of Section 41-43-31 et seq. and all such other orders and decrees as shall be just, equitable and in the public interest, including the appointment of receivers to continue or terminate the operation of the business.
In that same action, the person bringing the action may claim against the bond that the cemetery is required to file with the Secretary of State under Section 41-43-37(7) for any losses or damages sustained by the person.
(8) All the necessary expenses of any examination or audit performed or court proceedings conducted under the provisions of subsection (7) of this section shall be paid by the cemetery owner or owners or, if incorporated, its officers and directors, and if a sale of any cemetery is ordered by the court, the proceeds of the sale shall first be applied to the costs expended under the provisions of subsection (7) of this section.
(9) Whenever a cemetery subject to the provisions of Section 41-43-31 et seq. becomes the subject of a court order of receivership, the receiver shall determine as soon as practical if the income of the receivership estate is sufficient for the operation of the cemetery including the upkeep and maintenance of cemetery grounds. If the receiver determines that insufficient cash flow or income exists to provide maintenance and upkeep, the receiver shall notify the mayor of the municipality in which the cemetery is located or the president of the board of supervisors for cemeteries located outside of a municipality, by certified mail return receipt requested, that insufficient income exists for the receivership estate. Upon receipt of that notice, the municipality or county shall appoint a cemetery maintenance committee of no more than seven (7) persons who have an interest in the cemetery through ownership of interment or entombment rights, genealogical or historical reasons. The committee may solicit donations and raise funds by any lawful means from private citizens and private sources. The committee may establish a trust fund to supply continuing needs over a long period of time. However, the receiver shall have the authority to determine the maintenance and upkeep to be performed, the frequency of upkeep and the selection of workers or contractors to accomplish maintenance and upkeep. If, at the conclusion of the receivership estate, excess funds are on deposit with the maintenance committee, the receiver is authorized to apply excess funds to any short-term or long-term capital improvement by which the cemetery would benefit.
SECTION 3. 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) (a) In no event may trust funds be loaned, directly or indirectly, to any of the following persons: the preneed provider; any entity in which the preneed provider has any financial interest; any employee, director, member, stockholder, partner, full or partial owner, or principal of the preneed provider; or any person related by blood or marriage to any of those persons.
(b) In no event may trust funds, directly or indirectly, be invested in or with any business or business venture in which any of the following persons have an interest: the preneed provider; any entity in which the preneed provider has any financial interest; any employee, director, member, stockholder, partner, full or partial owner, or principal of the preneed provider; or any person related by blood or marriage to any of those persons.
(4) 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. The contract shall disclose to the purchaser in boldface 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.
(5) 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.
(6) 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.
(7) If a substitute provider was named by the contract beneficiary, during his life, or by one with the legal authority to act on his behalf at any time, the substitute provider shall provide the trustee with a death certificate or published obituary along with an invoice verifying that the substitute provider serviced the final needs of the beneficiary. Within ten (10) days of receipt of the documentation of death and invoice from the substitute provider, the trustee shall pay the substitute provider or the estate of the contract beneficiary not less than the amount deposited in trust on behalf of the serviced beneficiary. For all trust-funded preneed contracts sold on or after July 1, 2012, the trustee shall pay the substitute provider not less than the amount deposited into trust on behalf of the serviced beneficiary in addition to all earnings, interest and income on the beneficiary's principal.
(8) 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.
(9) Each seller of preneed contracts that are funded by trust shall file with the Secretary of State a surety bond in which the seller is the principal obligor, in the sum of Five Hundred Thousand Dollars ($500,000.00), or such lower amount as prescribed by the Secretary of State, with one or more surety companies licensed to do business in this state whose liability in the aggregate will be equal to that sum. The bond shall be in favor of the State of Mississippi for the benefit of the contract insured or the beneficiaries or estate of the contract insured for financial loss or other damages suffered as a result of the misfeasance, fraud, default, failure or insolvency of a contract provider, or the fraud, deceit, misrepresentation or misappropriation of trust funds or the insolvency of the trust. Any person claiming against the bond may maintain an action against the contract seller and the surety.
SECTION 4. Section 75-63-81, Mississippi Code of 1972, is brought forward as follows:
75-63-81. (1) There is established a Preneed Contracts Loss Recovery Fund, hereinafter referred to as the "fund," to be administered by directors of the Preneed Contracts Loss Recovery Association, hereinafter referred to as the "association." Directors are to be appointed by the Secretary of State. The purpose of the fund is to reimburse the estates, or in the absence of an estate filing, the purchaser or applicant with payment jointly to the funeral home providing services or merchandise or both, of beneficiaries of preneed funeral contracts who have suffered financial loss as a result of the misfeasance, fraud, default, failure or insolvency of a registered Mississippi preneed provider.
(2) The fund shall be funded from a charge not to exceed Ten Dollars ($10.00) to be added to the cost of every preneed contract sold from and after July 1, 2009; however, if the preneed contract is funded solely with insurance that is protected by the Mississippi Life and Health Insurance Guaranty Association, then that fee shall not be charged. The association may reduce, suspend or resume collection of the fee at any time and for any period to ensure that a sufficient amount is available to meet anticipated disbursements and to maintain an adequate reserve consistent with actuarial guidance.
The per-contract fees shall be remitted quarterly to the association for each quarter of the calendar year with a quarterly fee form as prescribed by the Secretary of State. The per-contract fee is not subject to the trusting requirements of Section 75-63-59. The fees shall be remitted to the association no later than fifteen (15) days after each quarter. Absent the Secretary of State's approval of an extension for good cause shown, preneed providers failing to timely report and remit the per-contract fee to the association may be subject to a penalty of One Hundred Dollars ($100.00) per day for each day of delinquency, payable to the fund.
(3) All sums received by the association shall be held in a separate account maintained by the State Treasurer to be used solely as provided in this article. Warrants to the fund may only be issued by the Department of Finance and Administration upon request by a majority vote of the directors of the Preneed Contracts Loss Recovery Association. All interest or other income earned on the fund shall be retained by the fund.
(4) Reimbursements from the fund must not exceed the total payment made for preneed funeral services or merchandise, cemetery services or merchandise, or both. No current insurance benefits or future graduated insurance benefits may be reimbursed, including any current or future graduated insurance benefits in any insurance company insolvency guaranty fund association. Upon the death of the beneficiary and the applicant's compliance with all applicable rules of the association, reimbursement from the fund may be made to the estate of the beneficiary, the purchaser or applicant with payment jointly to the funeral home or cemetery providing services or merchandise or both, only to the extent to which losses are not bonded or otherwise covered. If the association makes payments from the fund under this section, the association is subrogated in the reimbursed amount and may bring an action against any person or entity, including a preneed provider. The association may enforce claims it may have for restitution or otherwise and may employ and compensate from the fund consultants, legal counsel, accountants and other persons it considers appropriate to assure compliance with this section.
(5) The association shall investigate all applications made and may reject or allow claims in whole or in part. Payment may be made only to the extent that monies are available in the fund, and payments may be prorated among claimants. Reimbursements for completed claims must be processed subject to availability of monies in the fund. The association has complete discretion to determine the order and manner of payment of approved applications. The association may approve one (1) application, in whole or in part, that includes more than one (1) reparation claim for the benefit of purchasers of prepaid contracts of an insolvent registrant as part of a plan to arrange for another registrant to assume the obligations of the licensee being liquidated if the association finds that the plan is reasonable and is in the best interests of the contract beneficiaries. All payments are a matter of privilege and not a right, and no person has a right in the fund as a third-party beneficiary or otherwise.
(6) The association shall develop a form of application for reimbursement.
(7) This fund and all interest earned may be used only as prescribed in this section and may not be used for any other purposes to the extent losses are not bonded, insured, or otherwise covered, protected or reimbursed. Further, all monies deposited into the fund shall not be subject to any deduction, tax, judgment lien, levy, or any other type of assessment except as may be provided in this article. The association may expend monies from the fund to:
(a) Make reimbursements on approved applications;
(b) Purchase insurance to cover losses and association liability as considered appropriate by the directors and not inconsistent with the purpose of the fund;
(c) Invest portions of the fund as are not currently needed to reimburse losses and maintain adequate reserves, as are permitted to be made by fiduciaries under state law;
(d) Pay the expenses of the association for administering the fund, including employment of legal counsel, accountants, consultants and other persons the board considers necessary to assure compliance with this section.
(8) No person may make, publish, disseminate, circulate or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter, poster or over any radio station or television station, or in any other way, any advertisement, announcement, or statement that uses the existence of the fund for the purpose of sales, solicitation or inducement to purchase any form of preneed contract covered under this article.
(9) The Secretary of State may establish rules and regulations necessary to implement the purposes of the section including, but not limited to, rules governing the association's operations, claim procedures, determination of solvency or insolvency of a preneed provider, claimant eligibility and determination of appropriate loss payee.
(10) No purchaser or representative of a purchaser is provided in this section with any administrative right or legal or equitable right to any funds collected for this association to satisfy any judgment or economic loss of the purchaser from a prepaid funeral or cemetery organization except for the purposes of this section. This fund is established for the discretionary relief of purchasers and their representatives of prepaid funeral or cemetery contracts from insolvent prepaid funeral or cemetery organizations or prepaid funeral businesses with severe trust fund account shortages as determined by the directors. Coverage is limited to the claimant's actual contract payments made. There shall be no fund coverage for additional economic damages, attorney's fees, recovery costs, interest, other equitable relief or noneconomic damages.
Further, no claimant shall be eligible for compensation from the fund unless the contract purchaser for whom a claim is asserted paid to the preneed provider the loss recovery fee required by subsection (2) of this section. The fund shall have no liability for preneed contracts sold or claims that occurred or accrued before July 1, 2009.
(11) There shall be no liability on the part of and no cause of action of any nature shall arise against any director of the association, the Secretary of State, his representatives, agents or employees for any act or omission by them in the performance of their powers and duties under this article, or in its administration, dispensation, handling or collection of funds for the program.
(12) Directors of the association shall be appointed by the Secretary of State and shall consist of no fewer than five (5), one (1) from each of the Mississippi Supreme Court Districts and two (2) from the state at large. In making director appointments the Secretary of State shall consider, among other things, whether all association members are fairly represented. At least three (3) of the directors must possess five (5) years or more experience in the preneed funeral service and merchandise business as an owner or manager. All directors shall be appointed for staggered six-year terms, with the exception of the initial terms of service for the original five (5) directors. The Secretary of State may appoint any director to a successive six-year term. The initial term of service for all directors shall begin on October 1, 2009, with the initial term of two (2) directors to be determined by the Secretary of State at appointment expiring on September 30, 2011, and two (2) directors to be determined by the Secretary of State at appointment expiring on September 30, 2013. The initial term for the remaining director to be determined by the Secretary of State at appointment shall expire on September 30, 2015.
(13) Compensation for a director may be paid from the fund, and compensation is limited to Fifty Dollars ($50.00) per day only for each travel day and meeting day designated by the Secretary of State in addition to a per diem amount designed to compensate directors for reasonable meal allowances, travel and lodging expenses, if needed, to attend meetings of the association directors.
(14) The association and its directors shall assist the Secretary of State and be subject to the applicable provisions of the laws of this state. The association shall be subject to examination and regulation by the Secretary of State. The association by its directors shall prepare and submit to the Secretary of State each year, not later than March 1 of each year, a financial report in a form approved by the Secretary of State and a report of activities during the preceding calendar year.
(15) Appeal rights for claim decisions issued by the association directors exist in the chancery court in this state in which an estate has been open for probate by the representative of the claimant; the chancery court in the county in which the preneed contract was purchased; or the chancery court in this state of the claimant's or decedent's home county. A notice of appeal must be filed within thirty (30) days of the association's written order denying the claim in whole or in part, and appeal to chancery court is limited to a review of the record made before the association's directors on a substantial evidence evidentiary standard.
SECTION 5. This act shall take effect and be in force from and after July 1, 2015.
