Current through Register 1531, September 27, 2024
(1)
Parties to Pre-need Funeral
Contracts. All Pre-need Funeral Contracts shall be between a Buyer
and a Licensed Funeral Establishment. The Licensed Funeral Establishment may
not accept cash or checks made payable to the Licensed Funeral Establishment or
individual registrants for purposes of funding the Pre-need Funeral Contract
unless said checks are endorsed and sent to the banking institution or
insurance company within one business day. Such funds must be made payable
directly to the banking institution or insurance company.
(2)
Who May Prepare Pre-need
Funeral Contracts. No person shall prepare, negotiate or execute a
Pre-need Funeral Contract with a Buyer or potential Buyer; or receive, or
manage any funds made payable to a banking institution or insurance company as
payment for the Funeral Goods and/or Services identified in such a Pre-need
Funeral Contract; unless:
(a) he or she is a
Type 3; or
(b) he or she is a Type
6 and meets the conditions outlined in
239
CMR 3.04(5):
Pre-need Funeral Arrangements.
(3)
Location of Offices in Which
Pre-need Funeral Contracts May Be Prepared. All Pre-need centers
or offices which engage in the preparation, negotiation or execution of
Pre-need Funeral Contracts or arrangements shall be located within a duly
Licensed Funeral Establishment.
(4)
Provision of Buyer's Guide Required. A copy of a
Buyer's Guide to Pre-need Funeral Contracts, approved by the Board, shall be
furnished to every person or identifiable group of persons who enter into
negotiations or discussions with a Type 3 or Type 6 regarding a Pre-need
Funeral Contract prior to the signing of any such contract by the parties. A
Buyer's Guide to Pre-need Funeral Contracts shall, at a minimum, inform the
consumer that:
(a) A consumer can pre-plan his
or her funeral arrangements without paying for such arrangements in
advance;
(b) The cost of the
funeral goods and services purchased through a Pre-need Funeral Contract may be
higher or lower at the time of the Beneficiary's death than the amounts set
forth in the contract, and the Beneficiary's rights and obligations with
respect to such changes in price are determined by the contract;
(c) There are various methods of financing
Pre-need Funeral Contracts, including but not limited to trusts, Pre-need
insurance policies, funeral insurance, traditional life insurance policies,
annuities, and separately-created Medicaid-compliant burial accounts;
(d) Each such financing method has certain
briefly-described tax, Medicare and Medicaid eligibility, and cancellation
consequences;
(e) The consumer has
a legal right to cancel such a Pre-need Funeral Contract within ten days of its
execution without penalty;
(f)
Cancellation or revocation of a Pre-need Funeral Contract after the expiration
of the ten-day "cooling-off" period may have adverse consequences in terms of
eligibility for Medicaid or other government benefits programs;
(g) A Licensed Funeral Establishment may not
impose any surcharge, fee, or other penalty upon any person who seeks to
exercise his or her rights to cancel or transfer a Pre-need Funeral
Contract.
(h) The funeral
establishment will report any changes in the Pre-need Funeral Contract, or
withdrawals of funds which were originally received in connection with that
contract, to the applicable governmental authority responsible for the
administration of Medicaid or other governmental benefits programs to the
extent that such reporting is required by law.
(i) The Licensed Funeral Establishment must:
1. deposit any Pre-need funds received from
the consumer into a Funeral Trust Account not later than five business days
after the ten-day "cooling-off" period; or
2. pay any Pre-need funds received from the
consumer to an insurance company not later than five business days after the
ten-day "cooling-off period".
(j) The Licensed Funeral Establishment must
send the consumer and the Beneficiary (if different) written confirmation that
the Pre-need funds have been deposited in a Funeral Trust Account or used to
purchase a Pre-need Insurance Policy or Annuity not later than ten days after
the funds are deposited or paid. Such written confirmation must bear the
signature of a duly-authorized representative of the insurance company which
issued the Pre-need Insurance Policy or Annuity, whichever applies.
(k) The consumer may transfer his or her
Pre-need Funeral Contract to another Licensed Funeral Establishment at any
time.
(l) The Licensed Funeral
Establishment may not accept cash or check made payable to the Licensed Funeral
Establishment for purposes of funding the Pre-need Funeral Contract unless said
checks are endorsed and sent to the banking institution or insurance company
within one business day. Such funds must be made payable directly to the
banking institution or insurance company.
(5)
Required Form and Contents of
Pre-need Funeral Contracts.
(a)
All Pre-need Funeral Contracts shall be in writing and shall be prepared and
executed on one of the Pre-need Funeral Contract forms prescribed by the
Board.
(b) Each Pre-need Funeral
Contract shall be complete and shall contain all information specified on the
form used, including but not limited to:
1.
The signature of the Buyer; and
2.
The signature of the Type 3 or Type 6 who is acting as the authorized
representative of the contracting funeral establishment.
(c) Each Pre-need Funeral Contract shall:
1. State conspicuously on the first page of
the contract, in a manner reasonably calculated to attract the attention of a
reasonable person, whether or not the Buyer has selected specific Funeral Goods
and/or Services;
2. Be accompanied
by an Itemized Statement of Funeral Goods and Services which meets the
requirements of the Federal Trade Commission Funeral Rule (16 CFR Part 453),
M.G.L. c. 112, § 84B and
239 CMR
3.14: Price Disclosure to
Consumer, which shall be attached to that Pre-need Funeral Contract
and incorporated by reference into that contract;
3. If the Buyer has selected specific Funeral
Goods and/or Services, the Itemized Statement of Funeral Goods and Services
shall specify the prices for each identified funeral good or service selected
by the Buyer to the extent known at the time the Pre-need Funeral Contract is
prepared;
4. If the Buyer has not
selected any specific Funeral Goods and/or Services, the Itemized Statement of
Funeral Goods and Services shall have the words "No Goods or Services Selected"
clearly and conspicuously marked thereon; and
5. Permit the buyer to specify if the
selected Funeral Goods and/or Services may be deemed Revocable or Irrevocable,
subject to any attachments by Medicaid or other government benefit programs.
With regards to specific goods and services, the Pre-need Funeral Contract may
specify the selections become irrevocable upon death of the Beneficiary. If the
Pre-need Funeral Contract itself is irrevocable, the substitution or removal of
specific goods and services may not be utilized to provide a refund for any
monies paid for the Pre-need Funeral Contract back to the Beneficiary's
estate.
(d) Each
Pre-need Funeral Contract shall indicate, in the spaces designated for such
information on the Board-prescribed Pre-need Funeral Contract form:
1. The percentage of the total cost of the
funeral which is attributable to the goods and services which are being
provided directly by the Licensed Funeral Establishment itself, which shall be
calculated by dividing the total cost of the goods and services being provided
by the funeral establishment itself, as set forth in the Itemized Statement of
Funeral Goods and Services required by 239 CMR 4.02(5)(c), by the total cost of
the funeral as set forth in that Itemized Statement of Funeral Goods and
Services; and
2. The percentage of
the total cost of the funeral which is attributable to goods and services
provided by suppliers or vendors other than the Licensed Funeral Establishment
(the Non-funeral Establishment Charges or "Cash Advance Item" Charges), which
shall be calculated by dividing the total cost of the goods and services being
provided by suppliers or vendors other than the Licensed Funeral Establishment
(the Non-funeral Establishment Charges or "Cash Advance Item" Charges), as set
forth in the "cash advance items" section of the Itemized Statement of Funeral
Goods and Services required by 239 CMR 4.02(5)(c), by the total cost of the
funeral as set forth in that itemized statement.
The percentages so calculated for preneed arrangements shall be
rounded off to the nearest whole number (e.g., 75.28% = 75%,
75.67%= 76%) and the sum of such percentages shall in all cases equal
100%.
(e) Each
Pre-need Funeral Contract shall contain the initials or signature of the Buyer
acknowledging receipt of the Board-approved Buyer's Guide to Pre-need Funeral
Contracts required under 239 CMR 4.02(4).
(f) Each Pre-need Funeral Contract shall
recite:
1. The amount of money which the Buyer
has tendered and made payable to a banking institution or insurance company in
connection with that contract at the time the contract was made;
2. The amount(s) of any future payment(s)
which are to be made by the Buyer in order to fully fund that contract and the
date(s) on which such payments are due;
3. Whether the money tendered and made
payable to a banking institution or insurance company in connection with that
contract was placed in a Funeral Trust Account or used to pay for a Pre-need
Insurance Policy or Annuity; and
5.
The identity of the banking institution which serves as Trustee of the Funeral
Trust Account established pursuant to
239 CMR
4.09, or the insurance company which issued
the Pre-need Insurance Policy or Annuity pursuant to
239 CMR
4.10, whichever applies.
(g) Each Pre-need Funeral Contract shall
recite conspicuously on its face whether it is Revocable or Irrevocable, and
that an attempt to revoke or cancel an Irrevocable Pre-need Funeral Contract
after the expiration of the ten-day "cooling-off" period described in
239 CMR
4.07(1) may have adverse
consequences in terms of eligibility for Medicaid or other government benefit
programs.
(h) If the Buyer has not
tendered funds made payable to a banking institution or insurance company to
the funeral establishment in connection with a proposed Pre-need Funeral
Contract, any document which sets forth the terms and provisions of a proposed
Pre-need Funeral Contract shall be treated as a non-binding Pre-need Funeral
Contract estimate pursuant to 239 CMR 4.02(6).
(i) A proposed or attempted Pre-need Funeral
Contract shall be deemed null and void and unenforceable by either party if:
1. The parties fail to prepare and execute
the Pre-need Funeral Contract on one of the Pre-need Funeral Contract forms
prescribed by the Board;
2. The
parties fail to fully and properly complete any portion of the prescribed
Pre-need Funeral Contract Form used; or
3. The parties fail to comply with any other
applicable provision of 239 CMR 4.02(5) with respect to the preparation or
execution of the proposed or attempted Pre-need Funeral Contract.
(j) In the event a proposed or
attempted Pre-need Funeral Contract is to be deemed null and void and
unenforceable, any and all monies tendered and made payable to a banking
institution or insurance company to the funeral establishment by the Buyer in
connection with the proposed Pre-need Funeral Contract shall be returned to the
Buyer immediately, without penalty or deduction of any kind.
(k) Notwithstanding the provisions of 239 CMR
4.02(5)(h), a proposed or attempted Pre-need Funeral Contract which has not
been signed by one or both parties shall be treated as a non-binding Pre-need
funeral estimate pursuant to 239 CMR 4.02(6).
(l) The Licensed Funeral Establishment shall
furnish a complete, fully-executed copy of the Pre-need Funeral Contract to the
Buyer at the time the Pre-need Funeral Contract is made. In the event that the
Beneficiary of the Pre-need Funeral Contract is someone other than the Buyer,
the funeral establishment shall furnish an additional fully-executed copy of
the Pre-need Funeral Contract to the Beneficiary not later than five business
days after the Pre-need Funeral Contract is made.
(6)
Non-binding Pre-need Funeral
Estimates. A Licensed Funeral Establishment may issue a
non-binding estimate or proposal for a Pre-need Funeral Contract to a Buyer or
potential Buyer, as long as:
(a) The estimate
or proposal is prepared and issued on the Pre-need Funeral Contract Form
prescribed by the Board;
(b) The
estimate or proposal specifies the funeral goods or services which the issuing
funeral establishment proposes to provide; and
(c) The estimate or proposal contains, or is
accompanied by, an Itemized Statement of Funeral Goods and Services which meets
the requirements of 239 CMR 4.02(5) and which specifies the prices for each
identified funeral good or service which the funeral establishment proposes to
provide to the extent known at the time the estimate is prepared.
(d) Any such estimate or proposal expires and
becomes null and void after a specified period of time, not to exceed 30 days
from the date of its issuance, unless the Buyer or potential Buyer, prior to
that expiration date, enters into a Pre-need Funeral Contract which meets the
requirements of 239 CMR 4.02(5) and tenders full or partial payment made
payable to a banking institution or insurance company of the specified price
for the identified funeral goods and services to the funeral establishment
which issued the estimate.
(7)
Sale of Monuments or
Interment Space Prohibited. Type 3s and Type 6s who prepare,
negotiate and/or execute Pre-need Funeral Contracts shall arrange only for
Funeral Goods and/or Services, and shall not sell interment space or monuments
in such contracts. Nothing in 239 CMR 4.02(7) shall be construed to prohibit a
Licensed Funeral Establishment from contracting with a vendor or supplier which
is not a Licensed Funeral Establishment for the purchase of a monument or
interment space on behalf of the Beneficiary pursuant to the terms of a
Pre-need Funeral Contract which specifically identifies that monument or
interment space as one of the cash-advance items selected by the
Buyer.
