Code of Maryland Regulations
Title 31 - MARYLAND INSURANCE ADMINISTRATION
Subtitle 15 - UNFAIR TRADE PRACTICES
Chapter 31.15.03 - Life Insurance Disclosure
Section 31.15.03.06 - Preneed Funeral Contracts or Prearrangements
Universal Citation: MD Code Reg 31.15.03.06
Current through Register Vol. 51, No. 19, September 20, 2024
A. At the time an application is made for a preneed funeral contract or prearrangement that is funded by a life insurance policy, and before accepting the applicant's initial premium or deposit, the carrier shall adequately disclose to the applicant, in -writing, the following information:
(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 insurance producer or insurance producers, the provider of the funeral or cemetery merchandise or services, the administrator, and any other individual;
(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 of the prearrangement on any:
(a) Changes in the life insurance policy, including but not limited to changes in the assignment, beneficiary designation, or use of the proceeds;
(b) Penalties to be incurred by the policyholder as a result of failure to make premium payments; and
(c) Penalties to be incurred by the policyholder or monies to be received as a result of cancellation, or surrender of the life insurance policy;
(5) A list of all merchandise and services which are applied or contracted for in the prearrangement and all relevant information concerning the price of the funeral services, including an indication that the purchase price is either guaranteed at the time of purchase or to be determined at the time of need;
(6) All relevant information concerning what occurs and whether any entitlements or obligations arise if there is a difference between the proceeds of the life insurance policy and the amount actually needed to fund the prearrangement;
(7) Any penalties or restrictions, including but not limited to:
(a) Geographic restrictions; or
(b) The inability of the provider to perform on the delivery of merchandise, services or the prearrangement guarantee; and
(8) If a sales commission or other form of compensation is being paid:
(a) The fact that a sales commission or other form of compensation is being paid; and
(b) The identity of the individuals or entities to whom the sales commission or other form of compensation is paid.
B. The disclosure requirements of this regulation apply to the issuance or delivery of certificates, as well as to the master policy.
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