Current through Register Vol. 48, No. 12, March 22, 2024
a) The following information shall be given
in writing to the applicant at the time an application is made, prior to
accepting the applicant's initial premium or deposit for a preneed funeral
contract or prearrangement as defined in Section
930.50(j)
which is funded or to be funded by a life insurance policy:
1) the fact that a life insurance policy is
involved or being used to fund a prearrangement,
2) the nature of the relationship among the
soliciting agent or agents, the provider of the funeral or cemetery merchandise
or services, and any other person,
3) the relationship of the life insurance
policy to the funding of the prearrangement and the nature and existence of any
guarantees relating to the prearrangement,
4) the impact on the prearrangement:
A) of any changes in the life insurance
policy including but not limited to, changes in the assignment, beneficiary
designation or use of the proceeds,
B) of any penalties to be incurred by the
policyholder as a result of failure to make premium payments,
C) of any penalties to be incurred or monies
to be received as a result of cancellation or surrender of the life insurance
policy,
5) the fact that
the family or representative of the deceased has the right to change the choice
of the provider of the funeral/cemetery merchandise and services upon the
demise of the insured,
6) an
itemized list of the merchandise and services which are applied or contracted
for in the prearrangement and all information concerning the price of the
funeral service, including an indication that the purchase price is either
guaranteed at the time of purchase or to be determined at the time of
need,
7) all information
concerning:
A) the disposition of any
proceeds from the policy in excess of the amount needed to fund the
prearrangement; and
B) any
remaining or outstanding obligations of the estate for payment of any
difference between the amount actually needed to fund the prearrangement and
the life insurance policy proceeds; and
C) payment of proceeds to a secondary
beneficiary in the event the policy proceeds exceed the prearranged costs of
the funeral/cemetery merchandise and services,
8) 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 the prearrangement
guarantee.
b) No person
shall be designated the owner of a life insurance policy used to fund a
prearrangement if the person's only insurable interest in the insured is the
receipt of the proceeds from the policy or in naming who shall receive the
proceeds. Such persons would include the funeral home providing the services
and the insurance producer who sold the policy.