Current through Register 1531, September 27, 2024
(1)
Prohibition Against Personal or Business Uses. No
Licensed Funeral Establishment, nor any agent or employee thereof, shall
receive funds in connection with any Pre-need Funeral Contract for any personal
use, payment of the operating expenses of any funeral establishment, issuance
of a loan to any person, as collateral for any loan, or for any
purpose.
(2)
Funeral
Trust Account or Pre-need Insurance Policy or Annuity Required.
All funds made payable to a banking institution or insurance company received
from a Buyer by a Licensed Funeral Establishment, or by any employee or agent
thereof, in connection with any Pre-need Funeral Contract shall be:
(a) Deposited in a Funeral Trust Account
which meets the requirements of
239 CMR
4.09 not later than five business days after
the expiration of the "cooling-off" period described in
239 CMR
4.07(1); or
(b) Paid to an insurance company for the
purchase of a Pre-need Insurance Policy or Annuity pursuant to
239 CMR
4.10 not later than five business days after
the expiration of the "cooling-off" period described in
239 CMR
4.07(1).
(c) Each time a Licensed Funeral
Establishment receives any funds made payable to a banking institution or
insurance company in connection with any Pre-need Funeral Contract to which it
is a party, that funeral establishment shall furnish the Buyer, and the
Beneficiary (if different), with written confirmation that such funds have been
deposited in a Funeral Trust Account or used to purchase a Pre-need Insurance
Policy or Annuity, as required by this section, not later than 14 days after
such funds are deposited or paid. Such written confirmation shall bear the
signature of a duly-authorized representative of the banking institution in
which the Funeral Trust Account has been established, or a duly-authorized
representative of the insurance company which issued the Pre-need Insurance
Policy or Annuity, whichever applies.
(3)
Reimbursement for Newly
Imposed Taxes or Governmental Fees Permitted. Notwithstanding the
provisions of 239 CMR 4.08(1), a Licensed Funeral Establishment may require a
customer to reimburse said funeral establishment for any local, state or
federal taxes or fees imposed after the execution of the Pre-need Funeral
Contract, including but not limited to any value-added or sales taxes, for
which the funeral establishment is held responsible by the taxing authority or
governmental entity. In cases where the Pre-need Funeral Contract is funded in
full or in part, said reimbursement shall be considered an additional sum to be
paid by the customer, and the funeral establishment shall not be required to
deduct it from any income which accrues on the amount initially placed with the
funeral establishment for investment in a Pre-need Funeral Trust Account or
Pre-need Insurance Policy or Annuity.
(4)
Access to Pre-need Funeral
Contract Funds. Neither a Licensed Funeral Establishment, nor any
agent or employee thereof, shall have access to any of the funds made payable
to a banking institution or insurance company which are received by that
funeral establishment in connection with any Pre-need Funeral Contract for any
purpose other than:
(a) Obtaining payment for
the actual costs of Funeral Goods and/or Services provided to the Beneficiary,
or for Non-funeral Establishment Charges or "Cash Advance Item" Charges
connected with the funeral of that Beneficiary, upon presentation of the
documentation required by 239 CMR 4.08(5);
(b) Transferring those funds to another
Funeral Trust Account, or to a Pre-need Insurance Policy or Annuity, upon
written authorization to do so from the Buyer, the Beneficiary of the Pre-need
Funeral Contract (if different from the Buyer), or the duly authorized legal
representative of the Buyer or Beneficiary;
(c) Transferring those funds to another
Licensed Funeral Establishment in connection with a transfer of the underlying
Pre-need Funeral Contract, pursuant to and in accordance with the requirements
of
239 CMR
4.06; or
(d) Refunding those funds to the Buyer or the
Beneficiary upon receipt of a written notice of cancellation of the Pre-need
Funeral Contract from the Buyer, the Beneficiary of the Pre-need Funeral
Contract (if different from the Buyer) or the duly authorized legal
representative of the Buyer or Beneficiary, to the extent permitted by
239 CMR
4.07.
(5)
Documentation Required for
Payment for Services Rendered. Before obtaining or receiving
payment for Funeral Goods and/or Services rendered to the Beneficiary of any
Pre-need Funeral Contract pursuant to 239 CMR 4.08(4)(a), the Licensed Funeral
Establishment shall present both of the following to the named Trustee of the
Funeral Trust Account, or the duly authorized representative of the insurer
which issued the Pre-need Insurance Policy or Annuity, which was used to fund
that Pre-need Funeral Contract:
(a) a
certified copy of the death certificate for the Beneficiary; and
(b) a written statement, signed by a Type 3,
certifying that the Pre-need Funeral Contract has been performed in
full.
(6)
Allocation and Disposition of Pre-need Funeral Contract
Funds. At the time of the contract Beneficiary's death, the funds
available in any Funeral Trust Account established in connection with that
Pre-need Funeral Contract pursuant to
239 CMR
4.09, and/or in any Pre-need insurance
policies purchased in connection with that Pre-need Funeral Contract pursuant
to
239 CMR
4.10, shall be apportioned between the cost
of the goods and services provided directly by the Licensed Funeral
Establishment and the cost of the goods and services provided by vendors other
than the Licensed Funeral Establishment (the Non-Funeral Establishment Charges
or "Cash Advance Item" Charges) in accordance with the percentages calculated
pursuant to
239 CMR
4.02(5)(d).
(a) If the Pre-need Funeral Contract
contained cost-protection provisions pertaining to the costs of the goods and
services provided directly by the Licensed Funeral Establishment, and the
amount of funds to be applied to the costs of those goods and services pursuant
to this section exceeds the actual cost of those goods and services at the time
of the contract Beneficiary's death, the Licensed Funeral Establishment may
retain the resulting surplus funds.
(b) If the Pre-need Funeral Contract
contained cost-protection provisions pertaining to the costs of the goods and
services provided directly by the Licensed Funeral Establishment, and the
amount of funds to be applied to the costs of those goods and services pursuant
to 239 CMR 4.08(6) is not sufficient to cover the actual cost of those goods
and services at the time of the contract Beneficiary's death, the Licensed
Funeral Establishment shall bear the resulting loss and shall not bill the
estate of the contract Beneficiary, or any other person, for the
deficiency.
(c) If the Pre-need
Funeral Contract contained cost-protection provisions pertaining to the costs
of the goods and services provided by vendors other than the Licensed Funeral
Establishment, and the amount of funds to be applied to the costs of those
goods and services pursuant to 239 CMR 4.08(6) exceeds the actual cost of those
goods and services at the time of the contract Beneficiary's death, the
Licensed Funeral Establishment may retain the resulting surplus
funds.
(d) If the Pre-need Funeral
Contract contained cost-protection provisions pertaining to the costs of the
goods and services provided by vendors other than the Licensed Funeral
Establishment, and the amount of funds to be applied to the costs of those
goods and services pursuant to 239 CMR 4.08(6) is not sufficient to cover the
actual cost of those goods and services at the time of the contract
Beneficiary's death, the Licensed Funeral Establishment shall bear the
resulting loss and shall not bill the estate of the contract Beneficiary, or
any other person, for the deficiency.
(e) If the Pre-need Funeral Contract did not
contain cost-protection provisions pertaining to the costs of the goods and
services provided directly by the Licensed Funeral Establishment, and the
amount of funds to be applied to the costs of those goods and services pursuant
to 239 CMR 4.08(6) exceeds the actual cost of those goods and services at the
time of the contract Beneficiary's death, the Licensed Funeral Establishment
shall refund the resulting surplus to the estate of the contract Beneficiary.
In such event, the amount refunded may be subject to claims of the Commonwealth
or the United States.
(f) If the
Pre-need Funeral Contract did not contain cost-protection provisions pertaining
to the costs of the goods and services provided directly by the Licensed
Funeral Establishment, and the amount of funds to be applied to the costs of
those goods and services pursuant to 239 CMR 4.08(6) is not sufficient to cover
the actual cost of those goods and services at the time of the contract
Beneficiary's death, the Licensed Funeral Establishment may bill the estate of
the contract Beneficiary for the deficiency.
(g) If the Pre-need Funeral Contract did not
contain cost-protection provisions pertaining to the costs of the goods and
services provided by vendors other than the Licensed Funeral Establishment, and
the amount of funds to be applied to the costs of those goods and services
pursuant to 239 CMR 4.08(6) exceeds the actual cost of those goods and services
at the time of the contract Beneficiary's death, the Licensed Funeral
Establishment shall refund the resulting surplus to the estate of the contract
Beneficiary. In such event, the amount refunded may be subject to claims of the
Commonwealth or the United States.
(h) If the Pre-need Funeral Contract did not
contain cost-protection provisions pertaining to the costs of the goods and
services provided by vendors other than the Licensed Funeral Establishment, and
the amount of funds to be applied to the costs of those goods and services
pursuant to 239 CMR 4.08(6) is not sufficient to cover the actual cost of those
goods and services at the time of the contract Beneficiary's death, the
Licensed Funeral Establishment may bill the estate of the contract Beneficiary
for the deficiency.
(7)
Final Statement of Allocation of Funds to Be Furnished to
Beneficiary's Estate in Certain Cases. If a Pre-need Funeral
Contract is not a Cost-protected Pre-need Funeral Contract with respect to all
of the funeral goods and services identified in that contract, the Licensed
Funeral Establishment shall prepare, and furnish to the estate of the contract
Beneficiary at the time of the contract Beneficiary's death, an addendum to the
written Itemized Statement of Funeral Goods and Services required by 16 CFR
Part 453 and M.G.L. c. 112, § 84B which shows:
(a) The total amount of funds in the Pre-need
Funeral Trust Account(s) and/or Pre-need insurance policies for that
Beneficiary which were available at the time of the contract Beneficiary's
death;
(b) The amount of funds
available in the Pre-need Funeral Trust Account(s) and/or Pre-need insurance
policies which was applied to the costs of the goods and services which were
provided directly by the Licensed Funeral Establishment itself; and
(c) The amount of funds available in the
Pre-need Funeral Trust Account(s) and/or Pre-need insurance policies which was
applied to the costs of the goods and services provided by vendors other than
the Licensed Funeral Establishment (the Non-funeral Establishment Charges or
"Cash Advance Item" Charges).
(d)
Failure to provide such information accurately and completely in writing to the
estate of the contract Beneficiary shall constitute a violation of
239 CMR 4.00.
