101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB3353

 

Introduced , by Rep. Linda Chapa LaVia

 

SYNOPSIS AS INTRODUCED:
 
225 ILCS 45/1a  from Ch. 111 1/2, par. 73.101a
225 ILCS 45/1a-1
225 ILCS 45/1c new

    Amends the Illinois Funeral or Burial Funds Act. Defines "agent". Requires that pre-need contracts include the telephone number for the principal office of the seller and the parent company of the seller, if any. Requires that a pre-need contract is ratified within 10 business days by a licensed funeral director who is employed by the licensed funeral home firm responsible for providing the funeral goods and services. If the pre-need contract is funded by a trust, requires the seller or seller's agent to deposit the funds into the trust within 10 business days after execution of the contract. Requires the contract to state that the seller is responsible and liable for the competency and veracity of the agent. Provides that an agent acting on behalf of a seller must be properly authorized to do so. Requires an agent to provide to the purchaser a written statement containing: (i) the capacity of the agent to act and whether the agent is acting for the seller as an agent; and (ii) notice that the seller is the only person or entity authorized to provide the services or merchandise called for by the contract. Provides that a seller may not be an affiliate, a parent company, or subsidiary organization of the trustee acting as a fiduciary of a trust to hold consideration paid for services or merchandise subject to a pre-need contract by the seller or seller's agent and a purchaser. Effective immediately.


LRB101 08226 JRG 53292 b

 

 

A BILL FOR

 

HB3353LRB101 08226 JRG 53292 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Funeral or Burial Funds Act is
5amended by changing Sections 1a and 1a-1 and by adding Section
61c as follows:
 
7    (225 ILCS 45/1a)  (from Ch. 111 1/2, par. 73.101a)
8    Sec. 1a. For the purposes of this Act, the following terms
9shall have the meanings specified, unless the context clearly
10requires another meaning:
11    "Agent" means a person authorized by a seller to offer,
12sell, or solicit the sale of a pre-need sales contract on
13behalf of the seller and includes an employee or independent
14contractor of the seller.
15    "Beneficiary" means the person specified in the pre-need
16contract upon whose death funeral services or merchandise shall
17be provided or delivered.
18    "Licensee" means a seller of a pre-need contract who has
19been licensed by the Comptroller under this Act.
20    "Outer burial container" means any container made of
21concrete, steel, wood, fiberglass or similar material, used
22solely at the interment site, and designed and used exclusively
23to surround or enclose a separate casket and to support the

 

 

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1earth above such casket, commonly known as a burial vault,
2grave box or grave liner, but not including a lawn crypt as
3defined in the Illinois Pre-need Cemetery Sales Act.
4    "Parent company" means a corporation owning more than 12
5cemeteries or funeral homes in more than one state.
6    "Person" means any person, partnership, association,
7corporation, or other entity.
8    "Pre-need contract" means any agreement or contract, or any
9series or combination of agreements or contracts, whether
10funded by trust deposits or life insurance policies or
11annuities, which has for a purpose the furnishing or
12performance of funeral services or the furnishing or delivery
13of any personal property, merchandise, or services of any
14nature in connection with the final disposition of a dead human
15body. Nothing in this Act is intended to regulate the content
16of a life insurance policy or a tax-deferred annuity.
17    "Provider" means a person who is obligated for furnishing
18or performing funeral services or the furnishing or delivery of
19any personal property, merchandise, or services of any nature
20in connection with the final disposition of a dead human body.
21    "Purchaser" means the person who originally paid the money
22under or in connection with a pre-need contract.
23    "Sales proceeds" means the entire amount paid to a seller,
24exclusive of sales taxes paid by the seller, finance charges
25paid by the purchaser, and credit life, accident or disability
26insurance premiums, upon any agreement or contract, or series

 

 

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1or combination of agreements or contracts, for the purpose of
2performing funeral services or furnishing personal property,
3merchandise, or services of any nature in connection with the
4final disposition of a dead human body, including, but not
5limited to, the retail price paid for such services and
6personal property and merchandise.
7    "Purchase price" means sales proceeds less finance charges
8on retail installment contracts.
9    "Seller" means the person who sells or offers to sell the
10pre-need contract to a purchaser, whether funded by a trust
11agreement, life insurance policy, or tax-deferred annuity.
12    "Trustee" means a person authorized to hold funds under
13this Act.
14(Source: P.A. 92-419, eff. 1-1-02.)
 
15    (225 ILCS 45/1a-1)
16    Sec. 1a-1. Pre-need contracts.
17    (a) It shall be unlawful for any seller doing business
18within this State to accept sales proceeds from a purchaser,
19either directly or indirectly by any means, unless the seller
20or seller's agent enters into a pre-need contract with the
21purchaser which meets the following requirements:
22        (1) It states the name, and address, and telephone
23    number of the principal office of the seller and the parent
24    company of the seller, if any.
25        (1.3) The contract is ratified within 10 business days

 

 

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1    by a licensed funeral director who is employed, at the time
2    the contract is drafted, by the licensed funeral home firm
3    responsible for providing the funeral goods and services.
4        (1.5) If funded by a trust, it clearly identifies the
5    trustee's name and address and the primary state or federal
6    regulator of the trustee as a corporate fiduciary and the
7    seller or seller's agent deposits the funds into the trust
8    or trusts within 10 business days after execution of the
9    contract.
10        (1.7) If funded by life insurance, it clearly
11    identifies the life insurance provider and the primary
12    regulator of the life insurance provider.
13        (2) It clearly identifies the provider's name and
14    address, the purchaser, and the beneficiary, if other than
15    the purchaser.
16        (2.5) If the provider has branch locations, the
17    contract gives the purchaser the opportunity to identify
18    the branch at which the funeral will be provided.
19        (3) It contains a complete description of the funeral
20    merchandise and services to be provided and the price of
21    the merchandise and services, and it clearly discloses
22    whether the price of the merchandise and services is
23    guaranteed or not guaranteed as to price.
24            (A) Each guaranteed price contract shall contain
25        the following statement in 12 point bold type:
26            THIS CONTRACT GUARANTEES THE BENEFICIARY THE

 

 

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1        SPECIFIC GOODS AND SERVICES CONTRACTED FOR. NO
2        ADDITIONAL CHARGES MAY BE REQUIRED. FOR DESIGNATED
3        GOODS AND SERVICES, ADDITIONAL CHARGES MAY BE INCURRED
4        FOR UNEXPECTED EXPENSES INCLUDING, BUT NOT LIMITED TO,
5        CASH ADVANCES, SHIPPING OF REMAINS FROM A DISTANT
6        PLACE, OR DESIGNATED HONORARIA ORDERED OR DIRECTED BY
7        SURVIVORS.
8            (B) Except as provided in subparagraph (C) of this
9        paragraph (3), each non-guaranteed price contract
10        shall contain the following statement in 12 point bold
11        type:
12            THIS CONTRACT DOES NOT GUARANTEE THE PRICE THE
13        BENEFICIARY WILL PAY FOR ANY SPECIFIC GOODS OR
14        SERVICES. ANY FUNDS PAID UNDER THIS CONTRACT ARE ONLY A
15        DEPOSIT TO BE APPLIED TOWARD THE FINAL PRICE OF THE
16        GOODS OR SERVICES CONTRACTED FOR. ADDITIONAL CHARGES
17        MAY BE REQUIRED.
18            (C) If a non-guaranteed price contract may
19        subsequently become guaranteed, the contract shall
20        clearly disclose the nature of the guarantee and the
21        time, occurrence, or event upon which the contract
22        shall become a guaranteed price contract.
23        (4) It provides that if the particular supplies and
24    services specified in the pre-need contract are
25    unavailable at the time of delivery, the provider shall be
26    required to furnish supplies and services similar in style

 

 

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1    and at least equal in quality of material and workmanship.
2        (5) It discloses any penalties or restrictions,
3    including but not limited to geographic restrictions or the
4    inability of the provider to perform, on the delivery of
5    merchandise, services, or pre-need contract guarantees.
6        (6) Regardless of the method of funding the pre-need
7    contract, the following must be disclosed:
8            (A) Whether the pre-need contract is to be funded
9        by a trust, life insurance, or an annuity;
10            (B) The nature of the relationship among the person
11        funding the pre-need contract, the provider, and the
12        seller; and
13            (C) The impact on the pre-need contract of (i) any
14        changes in the funding arrangement including but not
15        limited to changes in the assignment, beneficiary
16        designation, or use of the funds; (ii) any specific
17        penalties to be incurred by the contract purchaser as a
18        result of failure to make payments; (iii) penalties to
19        be incurred or moneys or refunds to be received as a
20        result of cancellations; and (iv) all relevant
21        information concerning what occurs and whether any
22        entitlements or obligations arise if there is a
23        difference between the proceeds of the particular
24        funding arrangement and the amount actually needed to
25        pay for the funeral at-need.
26            (D) The method of changing the provider.

 

 

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1        (7) The contract states that the seller is responsible
2    and liable for the veracity and competency of the agent.
3    (8) An agent acting on behalf of a seller must be properly
4authorized to act as an agent for the seller as required under
5this Act.
6    (9) An agent must provide to the purchaser a written
7statement containing:
8        (A) The capacity of the agent to act and whether the
9    agent is acting for the seller as an agent; and
10        (B) notice that the seller is the only person or entity
11    authorized to provide the services or merchandise called
12    for by the contract.
13    (b) All pre-need contracts are subject to the Federal Trade
14Commission Rule concerning the Cooling-Off Period for
15Door-to-Door Sales (16 CFR Part 429).
16    (c) No pre-need contract shall be sold in this State unless
17there is a provider for the services and personal property
18being sold. If the seller is not a provider, then the seller
19must have a binding agreement with a provider, and the identity
20of the provider and the nature of the agreement between the
21seller and the provider shall be disclosed in the pre-need
22contract at the time of the sale and before the receipt of any
23sales proceeds. The failure to disclose the identity of the
24provider, the nature of the agreement between the seller and
25the provider, or any changes thereto to the purchaser and
26beneficiary, or the failure to make the disclosures required in

 

 

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1subdivision (a)(1), constitutes an intentional violation of
2this Act.
3    (d) All pre-need contracts must be in writing in at least
411 point type, numbered, and executed in duplicate. A signed
5copy of the pre-need contract must be provided to the purchaser
6at the time of entry into the pre-need contract. The
7Comptroller may by rule develop a model pre-need contract form
8that meets the requirements of this Act.
9    (e) The State Comptroller shall by rule develop a booklet
10for consumers in plain English describing the scope,
11application, and consumer protections of this Act. After the
12adoption of these rules, no pre-need contract shall be sold in
13this State unless (i) the seller distributes to the purchaser
14prior to the sale a booklet promulgated or approved for use by
15the State Comptroller; (ii) the seller explains to the
16purchaser the terms of the pre-need contract prior to the
17purchaser signing; and (iii) the purchaser initials a statement
18in the contract confirming that the seller has explained the
19terms of the contract prior to the purchaser signing.
20    (f) All sales proceeds received in connection with a
21pre-need contract shall be deposited into a trust account as
22provided in Section 1b and Section 2 of this Act, or shall be
23used to purchase a life insurance policy or tax-deferred
24annuity as provided in Section 2a of this Act.
25    (g) No pre-need contract shall be sold in this State unless
26it is accompanied by a funding mechanism permitted under this

 

 

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1Act, and unless the seller is licensed by the Comptroller as
2provided in Section 3 of this Act. Nothing in this Act is
3intended to relieve sellers of pre-need contracts from being
4licensed under any other Act required for their profession or
5business, and being subject to the rules promulgated to
6regulate their profession or business, including rules on
7solicitation and advertisement.
8(Source: P.A. 96-879, eff. 2-2-10.)
 
9    (225 ILCS 45/1c new)
10    Sec. 1c. Prohibited relationships between sellers and
11trustees. A seller may not be an affiliate, a parent company,
12or a subsidiary organization of the trustee acting as a
13fiduciary of a trust to hold consideration paid for services or
14merchandise subject to a contract entered into under this Act
15by the seller or seller's agent and a purchaser.
 
16    Section 99. Effective date. This Act takes effect upon
17becoming law.