HB338 Alabama 2012 Session

This bill would provide further for the definition of a preneed contract and would clarify that a preneed contract is not an insurance contract

This bill would clarify and require any person selling funeral or cemetery services on a preneed basis to obtain a certificate of authority from the Department of Insurance

This bill would revise the annual application and renewal dates for persons holding preneed certificates of authority and would waive the requirement of filing annual financial statements under certain circumstances and upon written request to the commissioner

This bill would require each certificate holder to file with the commissioner a quarterly report of all preneed contract activity

This bill would clarify the amount of a bond used as an alternative to a trusting requirement and would require an initial bond to be based on the amount of preneed liability expected to be incurred within the next 12 months

This bill would give the commissioner jurisdiction over any person lawfully writing, or suspected of unlawfully writing, preneed contracts and would clarify the penalties for violations

This bill would authorize the commissioner to use funds received from any source for purposes of enforcement

This bill would clarify that funds received for funeral and cemetery merchandise placed in storage prior to death need not be placed in trust

This bill would require certificate holders to satisfy additional requirements and file with the commissioner a quarterly report of all preneed contract trust activity in lieu of filing financial statements with the renewal application

This bill would subject cemetery authorities to the act

This bill would require any person receiving funds from the sale of a preneed contract to contribute to a trust fund, life insurance contract, or annuity contract

This bill would require any payments received on a preneed contract written after April 30, 2002, to be deposited into an approved trust

This bill would require that preneed cemetery merchandise and services funds remain in trust until cancellation or fulfillment and would provide for the refund of monies upon the cancellation of a preneed contract

This bill would prohibit a person serving on a board of trustees from also serving as the trustee of an endowment care fund, with certain specified exceptions, and would require bonds of trustees, with certain specified exceptions

This bill would define net income for purposes of an endowment care fund

This bill would also require a cemetery authority to place funds collected for the construction of a mausoleum, columbarium, or below-ground crypt into a preconstruction trust until such time as construction is complete

Amendment 621 of the Constitution of Alabama of 1901, now appearing as Section 111.05 of the Official Recompilation of the Constitution of Alabama of 1901, as amended, prohibits a general law whose purpose or effect would be to require a new or increased expenditure of local funds from becoming effective with regard to a local governmental entity without enactment by a 2/3 vote unless: it comes within one of a number of specified exceptions; it is approved by the affected entity; or the Legislature appropriates funds, or provides a local source of revenue, to the entity for the purpose

The purpose or effect of this bill would be to require a new or increased expenditure of local funds within the meaning of the amendment. However, the bill does not require approval of a local governmental entity or enactment by a 2/3 vote to become effective because it comes within one of the specified exceptions contained in the amendment

To amend Sections 27-17A-2, 27-17A-3, 27-17A-10, 27-17A-11, 27-17A-12, 27-17A-13, 27-17A-14, 27-17A-16, 27-17A-18, 27-17A-22, 27-17A-23, 27-17A-25, 27-17A-30, 27-17A-31, 27-17A-32, 27-17A-33, 27-17A-34, 27-17A-47, 27-17A-50, and 27-17A-55, Code of Alabama 1975, and to add Sections 27-17A-5 and 27-17A-11.1 to the Code of Alabama 1975; relating to preneed funeral service contracts; to provide further for the definition of a preneed contract and clarify that a preneed contract is not an insurance contract; to clarify and require any person selling funeral or cemetery services on a preneed basis to obtain a certificate of authority from the Department of Insurance; to revise the annual application and renewal dates for preneed certificates of authority; to waive the requirement of filing annual financial statements under certain circumstances upon written request to the commissioner; to require certificate holders to file quarterly reports of preneed contract activity with the commissioner; to clarify the amount of a bond used as an alternative to a trusting requirement; to require an initial bond to be based on the amount of preneed liability expected to be incurred within the next 12 months; to provide that the commissioner has jurisdiction over any person lawfully writing, or suspected of unlawfully writing, preneed contracts; to clarify penalties for violations; to authorize the commissioner to use funds received from any source for purposes of enforcement; to clarify that funds received for funeral and cemetery merchandise placed in storage prior to death need not be placed in trust; to require certificate holders to satisfy additional requirements and file with the commissioner a quarterly report of all preneed contract trust activity in lieu of filing financial statements with the renewal application; to subject cemetery authorities to the act; to require any person receiving funds from the sale of a preneed contract to contribute to a trust fund, life insurance contract, or annuity contract; to require any payments received on a preneed contract written after April 30, 2002, to be deposited into an approved trust; to require that preneed cemetery merchandise and services funds remain in trust until cancellation or fulfillment and to provide for the refund of monies upon the cancellation of a preneed contract; to prohibit a person serving on a board of trustees from also serving as the trustee of an endowment care fund, with certain exceptions; to require bonds of trustees, with certain exceptions; to define net income for purposes of an endowment care fund; to require a cemetery authority to place funds collected for the construction of a mausoleum, columbarium, or below-ground crypt into a preconstruction trust until such time as construction is complete; and in connection therewith; and in connection therewith would have as its purpose or effect the requirement of a new or increased expenditure of local funds within the meaning of Amendment 621 of the Constitution of Alabama of 1901, now appearing as Section 111.05 of the Official Recompilation of the Constitution of Alabama of 1901, as amended.