Current through Reg. 50, No. 187; September 24, 2024
(1) For the purposes of this section, "Total
preneed contracts" is defined as the total retail value of all outstanding
preneed contracts.
(2) A Preneed
Licensee or applicant must meet and maintain the following requirements on an
annual basis, demonstrating its ability to discharge its liabilities as they
become due in the normal course of business and must have sufficient funds
available to perform its obligation under its existing preneed contracts.
(a) A Preneed Licensee or applicant must
submit its most recent year-end financial statements (including a balance sheet
and income statement) with the Preneed License application and annually
thereafter as provided in section
497.453(1),
F.S. The financial statements must be prepared in accordance with generally
accepted accounting principles (GAAP) as those principles have been defined by
the Florida Board of Accountancy in chapter 61H1-20, F.A.C. If the applicant
does not have the minimum net worth as set forth in paragraph (2)(b) or lacks
sufficient liquid assets to satisfy current liabilities or does not appear to
have any substantial long-term assets, the Department shall request additional
financial information concerning financial statements and the statement of cash
flows.
(b) The Preneed Licensee's
financial statements must demonstrate the following levels of net worth:
1. Preneed Licensee that has total preneed
contracts $100,000 or less-$10,000 net worth;
2. Preneed Licensee that has total preneed
contracts of $100,001 to $200,000-$20,000 net worth;
3. Preneed Licensee that has total preneed
contracts of $200,001 to $400,000-$40,000 net worth;
4. Preneed Licensee that has total preneed
contracts of $400,001 to 600,000-$60,000 net worth;
5. Preneed Licensee that has total preneed
contracts of $600,001 to $800,000-$80,000 net worth;
6. Preneed Licensee that has total preneed
contracts in excess of $800,000-$100,000 net worth.
(c) In the case of a Preneed Licensee or
applicant offering preneed sales through a subsidiary agent, as provided in
rule 69K-5.0015, F.A.C., the Preneed
Licensee or applicant shall execute a guarantee agreement with respect to any
contract obligations resulting from preneed sales of such a selling
agent.
(3) If the Preneed
Licensee or applicant does not meet the financial requirements in paragraph
(2)(b), above, the entity may voluntarily submit to the Board additional
evidence or agree to additional oversight as to its meeting the requirements of
subsection (2), above, and as a condition of receiving and retaining a Preneed
License.
Such additional evidence or oversight agreement shall include
as appropriate:
(a) Agreement to
submit monthly financial statements of the entity;
(b) Agreement to submit quarterly financial
statements of the entity;
(c)
Appraisal of the entity's property or broker's opinion of value of entity's
assets;
(d) Credit report of the
entity or its principal owners;
(e)
Subordination of debt agreement from the entity's principal owners;
(f) Indemnification/subrogation agreement
binding the entity and principal owners;
(g) Guarantee agreement for the entity from
its principal owners;
(h) Written
explanation of past financial activity;
(i) Submission of a twelve month projected
business plan which shall include:
1.
Statement of cash flows;
2.
Proforma income statement with sources of revenue identified; and,
3. Marketing initiatives;
(j) Submission of previous Department
examination reports;
(k) 100%
voluntary trusting agreement by the entity;
Upon the Board's review of such additional information or
agreements, submitted as stated above, the Board shall issue a Preneed License
if such information or agreement results in the Board determining that the
applicant or preneed license meets the requirements of sections
497.452 and
497.453,
F.S.
Rulemaking Authority
497.103 FS. Law Implemented
497.452,
497.453
FS.
New 5-21-95, Amended 12-7-98, 10-18-99, 12-12-00, 6-26-02,
Formerly 3F-5.0016, Amended 9-5-18.
