Rep. Jay Hoffman

Filed: 3/19/2019

 

 


 

 


 
10100HB0469ham001LRB101 03394 RAB 57360 a

1
AMENDMENT TO HOUSE BILL 469

2    AMENDMENT NO. ______. Amend House Bill 469 by replacing
3everything after the enacting clause with the following:
 
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

 

 

10100HB0469ham001- 2 -LRB101 03394 RAB 57360 a

1be provided or delivered.
2    "Licensee" means a seller of a pre-need contract who has
3been licensed by the Comptroller under this Act.
4    "Outer burial container" means any container made of
5concrete, steel, wood, fiberglass or similar material, used
6solely at the interment site, and designed and used exclusively
7to surround or enclose a separate casket and to support the
8earth above such casket, commonly known as a burial vault,
9grave box or grave liner, but not including a lawn crypt as
10defined in the Illinois Pre-need Cemetery Sales Act.
11    "Parent company" means a corporation owning more than 12
12cemeteries or funeral homes in more than one state.
13    "Person" means any person, partnership, association,
14corporation, or other entity.
15    "Pre-need contract" means any agreement or contract, or any
16series or combination of agreements or contracts, whether
17funded by trust deposits or life insurance policies or
18annuities, which has for a purpose the furnishing or
19performance of funeral services or the furnishing or delivery
20of any personal property, merchandise, or services of any
21nature in connection with the final disposition of a dead human
22body. Nothing in this Act is intended to regulate the content
23of a life insurance policy or a tax-deferred annuity.
24    "Provider" means a person who is obligated for furnishing
25or performing funeral services or the furnishing or delivery of
26any personal property, merchandise, or services of any nature

 

 

10100HB0469ham001- 3 -LRB101 03394 RAB 57360 a

1in connection with the final disposition of a dead human body.
2    "Purchaser" means the person who originally paid the money
3under or in connection with a pre-need contract.
4    "Sales proceeds" means the entire amount paid to a seller,
5exclusive of sales taxes paid by the seller, finance charges
6paid by the purchaser, and credit life, accident or disability
7insurance premiums, upon any agreement or contract, or series
8or combination of agreements or contracts, for the purpose of
9performing funeral services or furnishing personal property,
10merchandise, or services of any nature in connection with the
11final disposition of a dead human body, including, but not
12limited to, the retail price paid for such services and
13personal property and merchandise.
14    "Purchase price" means sales proceeds less finance charges
15on retail installment contracts.
16    "Seller" means the person who sells or offers to sell the
17pre-need contract to a purchaser, whether funded by a trust
18agreement, life insurance policy, or tax-deferred annuity.
19    "Trustee" means a person authorized to hold funds under
20this Act.
21(Source: P.A. 92-419, eff. 1-1-02.)
 
22    (225 ILCS 45/1a-1)
23    Sec. 1a-1. Pre-need contracts.
24    (a) It shall be unlawful for any seller doing business
25within this State to accept sales proceeds from a purchaser,

 

 

10100HB0469ham001- 4 -LRB101 03394 RAB 57360 a

1either directly or indirectly by any means, unless the seller
2or seller's agent enters into a pre-need contract with the
3purchaser which meets the following requirements:
4        (1) It states the name, and address, and telephone
5    number of the principal office of the seller and the parent
6    company of the seller, if any.
7        (1.3) The contract is ratified within 10 business days
8    by a licensed funeral director who is employed, at the time
9    the contract is drafted, by the licensed funeral home firm
10    responsible for providing the funeral goods and services.
11        (1.5) If funded by a trust, it clearly identifies the
12    trustee's name and address and the primary state or federal
13    regulator of the trustee as a corporate fiduciary and the
14    seller or seller's agent deposits the funds into the trust
15    or trusts within 10 business days after execution of the
16    contract.
17        (1.7) If funded by life insurance, it clearly
18    identifies the life insurance provider and the primary
19    regulator of the life insurance provider.
20        (2) It clearly identifies the provider's name and
21    address, the purchaser, and the beneficiary, if other than
22    the purchaser.
23        (2.5) If the provider has branch locations, the
24    contract gives the purchaser the opportunity to identify
25    the branch at which the funeral will be provided.
26        (3) It contains a complete description of the funeral

 

 

10100HB0469ham001- 5 -LRB101 03394 RAB 57360 a

1    merchandise and services to be provided and the price of
2    the merchandise and services, and it clearly discloses
3    whether the price of the merchandise and services is
4    guaranteed or not guaranteed as to price.
5            (A) Each guaranteed price contract shall contain
6        the following statement in 12 point bold type:
7            THIS CONTRACT GUARANTEES THE BENEFICIARY THE
8        SPECIFIC GOODS AND SERVICES CONTRACTED FOR. NO
9        ADDITIONAL CHARGES MAY BE REQUIRED. FOR DESIGNATED
10        GOODS AND SERVICES, ADDITIONAL CHARGES MAY BE INCURRED
11        FOR UNEXPECTED EXPENSES INCLUDING, BUT NOT LIMITED TO,
12        CASH ADVANCES, SHIPPING OF REMAINS FROM A DISTANT
13        PLACE, OR DESIGNATED HONORARIA ORDERED OR DIRECTED BY
14        SURVIVORS.
15            (B) Except as provided in subparagraph (C) of this
16        paragraph (3), each non-guaranteed price contract
17        shall contain the following statement in 12 point bold
18        type:
19            THIS CONTRACT DOES NOT GUARANTEE THE PRICE THE
20        BENEFICIARY WILL PAY FOR ANY SPECIFIC GOODS OR
21        SERVICES. ANY FUNDS PAID UNDER THIS CONTRACT ARE ONLY A
22        DEPOSIT TO BE APPLIED TOWARD THE FINAL PRICE OF THE
23        GOODS OR SERVICES CONTRACTED FOR. ADDITIONAL CHARGES
24        MAY BE REQUIRED.
25            (C) If a non-guaranteed price contract may
26        subsequently become guaranteed, the contract shall

 

 

10100HB0469ham001- 6 -LRB101 03394 RAB 57360 a

1        clearly disclose the nature of the guarantee and the
2        time, occurrence, or event upon which the contract
3        shall become a guaranteed price contract.
4        (4) It provides that if the particular supplies and
5    services specified in the pre-need contract are
6    unavailable at the time of delivery, the provider shall be
7    required to furnish supplies and services similar in style
8    and at least equal in quality of material and workmanship.
9        (5) It discloses any penalties or restrictions,
10    including but not limited to geographic restrictions or the
11    inability of the provider to perform, on the delivery of
12    merchandise, services, or pre-need contract guarantees.
13        (6) Regardless of the method of funding the pre-need
14    contract, the following must be disclosed:
15            (A) Whether the pre-need contract is to be funded
16        by a trust, life insurance, or an annuity;
17            (B) The nature of the relationship among the person
18        funding the pre-need contract, the provider, and the
19        seller; and
20            (C) The impact on the pre-need contract of (i) any
21        changes in the funding arrangement including but not
22        limited to changes in the assignment, beneficiary
23        designation, or use of the funds; (ii) any specific
24        penalties to be incurred by the contract purchaser as a
25        result of failure to make payments; (iii) penalties to
26        be incurred or moneys or refunds to be received as a

 

 

10100HB0469ham001- 7 -LRB101 03394 RAB 57360 a

1        result of cancellations; and (iv) all relevant
2        information concerning what occurs and whether any
3        entitlements or obligations arise if there is a
4        difference between the proceeds of the particular
5        funding arrangement and the amount actually needed to
6        pay for the funeral at-need.
7            (D) The method of changing the provider.
8        (7) The contract states that the seller is responsible
9    and liable for the veracity and competency of the agent.
10    An agent acting on behalf of a seller must be properly
11authorized to act as an agent for the seller as required under
12this Act.
13    An agent must provide to the purchaser a written statement
14containing:
15        (A) The capacity of the agent to act and whether the
16    agent is acting for the seller as an agent; and
17        (B) notice that the seller is the only person or entity
18    authorized to provide the services or merchandise called
19    for by the contract.
20    (b) All pre-need contracts are subject to the Federal Trade
21Commission Rule concerning the Cooling-Off Period for
22Door-to-Door Sales (16 CFR Part 429).
23    (c) No pre-need contract shall be sold in this State unless
24there is a provider for the services and personal property
25being sold. If the seller is not a provider, then the seller
26must have a binding agreement with a provider, and the identity

 

 

10100HB0469ham001- 8 -LRB101 03394 RAB 57360 a

1of the provider and the nature of the agreement between the
2seller and the provider shall be disclosed in the pre-need
3contract at the time of the sale and before the receipt of any
4sales proceeds. The failure to disclose the identity of the
5provider, the nature of the agreement between the seller and
6the provider, or any changes thereto to the purchaser and
7beneficiary, or the failure to make the disclosures required in
8subdivision (a)(1), constitutes an intentional violation of
9this Act.
10    (d) All pre-need contracts must be in writing in at least
1111 point type, numbered, and executed in duplicate. A signed
12copy of the pre-need contract must be provided to the purchaser
13at the time of entry into the pre-need contract. The
14Comptroller may by rule develop a model pre-need contract form
15that meets the requirements of this Act.
16    (e) The State Comptroller shall by rule develop a booklet
17for consumers in plain English describing the scope,
18application, and consumer protections of this Act. After the
19adoption of these rules, no pre-need contract shall be sold in
20this State unless (i) the seller distributes to the purchaser
21prior to the sale a booklet promulgated or approved for use by
22the State Comptroller; (ii) the seller explains to the
23purchaser the terms of the pre-need contract prior to the
24purchaser signing; and (iii) the purchaser initials a statement
25in the contract confirming that the seller has explained the
26terms of the contract prior to the purchaser signing.

 

 

10100HB0469ham001- 9 -LRB101 03394 RAB 57360 a

1    (f) All sales proceeds received in connection with a
2pre-need contract shall be deposited into a trust account as
3provided in Section 1b and Section 2 of this Act, or shall be
4used to purchase a life insurance policy or tax-deferred
5annuity as provided in Section 2a of this Act.
6    (g) No pre-need contract shall be sold in this State unless
7it is accompanied by a funding mechanism permitted under this
8Act, and unless the seller is licensed by the Comptroller as
9provided in Section 3 of this Act. Nothing in this Act is
10intended to relieve sellers of pre-need contracts from being
11licensed under any other Act required for their profession or
12business, and being subject to the rules promulgated to
13regulate their profession or business, including rules on
14solicitation and advertisement.
15(Source: P.A. 96-879, eff. 2-2-10.)
 
16    (225 ILCS 45/1c new)
17    Sec. 1c. Prohibited relationships between sellers and
18trustees. A seller may not be an affiliate, a parent company,
19or a subsidiary organization of the trustee acting as a
20fiduciary of a trust to hold consideration paid for services or
21merchandise subject to a contract entered into under this Act
22by the seller or seller's agent and a purchaser.
 
23    Section 99. Effective date. This Act takes effect upon
24becoming law.".