SB3171 EngrossedLRB097 18829 CEL 64066 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 1, 1a-1, 1b, 2, and 4a as follows:
 
6    (225 ILCS 45/1)  (from Ch. 111 1/2, par. 73.101)
7    Sec. 1. Payment under pre-need contract. Except as
8otherwise provided in this Section, all sales proceeds paid to
9any person, partnership, association or corporation with
10respect to merchandise or services covered by this Act, upon
11any agreement or contract, or any series or combination of
12agreements or contracts, which has for a purpose the furnishing
13or performance of funeral services, or the furnishing or
14delivery of any personal property, merchandise, or services of
15any nature in connection with the final disposition of a dead
16human body, including, but not limited to, outer burial
17containers, urns, combination casket-vault units, caskets and
18clothing, for future use at a time determinable by the death of
19the person or persons whose body or bodies are to be so
20disposed of, shall be held to be trust funds, and shall be
21placed in trust in accordance with Sections 1b and 2, or shall
22be used to purchase life insurance or annuities in accordance
23with Section 2a. The person, partnership, association or

 

 

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1corporation receiving said payments under a pre-need contract
2is hereby declared to be a trustee thereof until deposits of
3funds are made in accordance with Section 1b or 2a of this Act.
4Persons holding less than $500,000 in trust funds may continue
5to act as the trustee after the funds are deposited in
6accordance with subsection (d) of Section 1b.
7    Nothing in this Act shall be construed to prohibit the
8inclusion of outer burial containers in sales contracts under
9the Illinois Pre-Need Cemetery Sales Act.
10(Source: P.A. 96-879, eff. 2-2-10.)
 
11    (225 ILCS 45/1a-1)
12    Sec. 1a-1. Pre-need contracts.
13    (a) It shall be unlawful for any seller doing business
14within this State to accept sales proceeds from a purchaser,
15either directly or indirectly by any means, unless the seller
16enters into a pre-need contract with the purchaser which meets
17the following requirements:
18        (1) It states the name and address of the principal
19    office of the seller and the parent company of the seller,
20    if any.
21        (1.5) If funded by a trust, it clearly identifies the
22    trustee's name and address and the primary state or federal
23    regulator of the trustee as a corporate fiduciary.
24        (1.7) If funded by life insurance, it clearly
25    identifies the life insurance provider and the primary

 

 

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1    regulator of the life insurance provider.
2        (2) It clearly identifies the provider's name and
3    address, the purchaser, and the beneficiary, if other than
4    the purchaser.
5        (2.5) If the provider has branch locations, the
6    contract gives the purchaser the opportunity to identify
7    the branch at which the funeral will be provided.
8        (3) It contains a complete description of the funeral
9    merchandise and services to be provided and the price of
10    the merchandise and services, and it clearly discloses
11    whether the price of the merchandise and services is
12    guaranteed or not guaranteed as to price.
13            (A) Each guaranteed price contract shall contain
14        the following statement in 12 point bold type:
15            THIS CONTRACT GUARANTEES THE BENEFICIARY THE
16        SPECIFIC GOODS AND SERVICES CONTRACTED FOR. NO
17        ADDITIONAL CHARGES MAY BE REQUIRED. FOR DESIGNATED
18        GOODS AND SERVICES, ADDITIONAL CHARGES MAY BE INCURRED
19        FOR UNEXPECTED EXPENSES INCLUDING, BUT NOT LIMITED TO,
20        CASH ADVANCES, SHIPPING OF REMAINS FROM A DISTANT
21        PLACE, OR DESIGNATED HONORARIA ORDERED OR DIRECTED BY
22        SURVIVORS.
23            (B) Except as provided in subparagraph (C) of this
24        paragraph (3), each non-guaranteed price contract
25        shall contain the following statement in 12 point bold
26        type:

 

 

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1            THIS CONTRACT DOES NOT GUARANTEE THE PRICE THE
2        BENEFICIARY WILL PAY FOR ANY SPECIFIC GOODS OR
3        SERVICES. ANY FUNDS PAID UNDER THIS CONTRACT ARE ONLY A
4        DEPOSIT TO BE APPLIED TOWARD THE FINAL PRICE OF THE
5        GOODS OR SERVICES CONTRACTED FOR. ADDITIONAL CHARGES
6        MAY BE REQUIRED.
7            (C) If a non-guaranteed price contract may
8        subsequently become guaranteed, the contract shall
9        clearly disclose the nature of the guarantee and the
10        time, occurrence, or event upon which the contract
11        shall become a guaranteed price contract.
12        (4) It provides that if the particular supplies and
13    services specified in the pre-need contract are
14    unavailable at the time of delivery, the provider shall be
15    required to furnish supplies and services similar in style
16    and at least equal in quality of material and workmanship.
17        (5) It discloses any penalties or restrictions,
18    including but not limited to geographic restrictions or the
19    inability of the provider to perform, on the delivery of
20    merchandise, services, or pre-need contract guarantees.
21        (6) Regardless of the method of funding the pre-need
22    contract, the following must be disclosed:
23            (A) Whether the pre-need contract is to be funded
24        by a trust, life insurance, or an annuity;
25            (B) The nature of the relationship among the person
26        funding the pre-need contract, the provider, and the

 

 

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1        seller; and
2            (C) The impact on the pre-need contract of (i) any
3        changes in the funding arrangement including but not
4        limited to changes in the assignment, beneficiary
5        designation, or use of the funds; (ii) any specific
6        penalties to be incurred by the contract purchaser as a
7        result of failure to make payments; (iii) penalties to
8        be incurred or moneys or refunds to be received as a
9        result of cancellations; and (iv) all relevant
10        information concerning what occurs and whether any
11        entitlements or obligations arise if there is a
12        difference between the proceeds of the particular
13        funding arrangement and the amount actually needed to
14        pay for the funeral at-need.
15            (D) The method of changing the provider.
16    (b) All pre-need contracts are subject to the Federal Trade
17Commission Rule concerning the Cooling-Off Period for
18Door-to-Door Sales (16 CFR Part 429).
19    (c) No pre-need contract shall be sold in this State unless
20there is a provider for the services and personal property
21being sold. If the seller is not a provider, then the seller
22must have a binding agreement with a provider, and the identity
23of the provider and the nature of the agreement between the
24seller and the provider shall be disclosed in the pre-need
25contract at the time of the sale and before the receipt of any
26sales proceeds. The failure to disclose the identity of the

 

 

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1provider, the nature of the agreement between the seller and
2the provider, or any changes thereto to the purchaser and
3beneficiary, or the failure to make the disclosures required in
4subdivision (a)(1), constitutes an intentional violation of
5this Act.
6    (d) All pre-need contracts must be in writing in at least
711 point type, numbered, and executed in duplicate. A signed
8copy of the pre-need contract must be provided to the purchaser
9at the time of entry into the pre-need contract. The
10Comptroller may by rule develop a model pre-need contract form
11that meets the requirements of this Act.
12    (e) The State Comptroller shall by rule develop a booklet
13for consumers in plain English describing the scope,
14application, and consumer protections of this Act. After the
15adoption of these rules, no pre-need contract shall be sold in
16this State unless (i) the seller distributes to the purchaser
17prior to the sale a booklet promulgated or approved for use by
18the State Comptroller; (ii) the seller explains to the
19purchaser the terms of the pre-need contract prior to the
20purchaser signing; and (iii) the purchaser initials a statement
21in the contract confirming that the seller has explained the
22terms of the contract prior to the purchaser signing.
23    (f) All sales proceeds received in connection with a
24pre-need contract shall be deposited into a trust account as
25provided in Section 1b and Section 2 of this Act, or shall be
26used to purchase a life insurance policy or tax-deferred

 

 

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1annuity as provided in Section 2a of this Act.
2    (g) No pre-need contract shall be sold in this State unless
3it is accompanied by a funding mechanism permitted under this
4Act, and unless the seller is licensed by the Comptroller as
5provided in Section 3 of this Act. Nothing in this Act is
6intended to relieve sellers of pre-need contracts from being
7licensed under any other Act required for their profession or
8business, and being subject to the rules promulgated to
9regulate their profession or business, including rules on
10solicitation and advertisement.
11(Source: P.A. 96-879, eff. 2-2-10.)
 
12    (225 ILCS 45/1b)  (from Ch. 111 1/2, par. 73.101b)
13    Sec. 1b. (a) Whenever a seller receives sales proceeds
14under a pre-need contract that the purchaser elects to fund by
15a trust agreement, the seller may retain an initial amount
16equal to 5% of the purchase price of the services, personal
17property or merchandise, or 15% of the purchase price of outer
18burial containers. Thereafter, a seller shall deposit into
19trust the amounts specified in this Section so that no later
20than upon the final payment on the contract, the trust shall
21equal or exceed 95% of the purchase price of all services,
22personal property, or merchandise, except for outer burial
23containers, and 85% of the purchase price of outer burial
24containers.
25    (b) In the event that sales proceeds to be deposited into a

 

 

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1trust are received pursuant to a cash sale or an installment
2contract, the seller may retain the initial percentage
3authorized by subsection (a) of this Section, and thereafter
4shall deposit into the trust the entire balance of sales
5proceeds received.
6    (c) In the event that the deposits into a trust required by
7this Section do not, after final payment by the consumer,
8result in the trust containing at least 95% of the purchase
9price of all services, personal property or merchandise, except
10for outer burial containers and 85% of the purchase price of
11outer burial containers, the seller shall make an additional
12deposit into the trust in an amount sufficient to meet these
13percentages.
14    (d) The trustee may not be the seller or provider of
15funeral services or merchandise unless the seller holds sales
16of less than $500,000 in trust, and deposits funds for which
17the seller is acting as trustee in (1) withdrawable accounts of
18State chartered or federally chartered savings and loan
19associations insured by the Federal Deposit Insurance
20Corporation; (2) deposits or certificates of deposits in State
21or federal banks insured by the Federal Deposit Insurance
22Corporation; or (3) share accounts or share certificate
23accounts in a State or federal credit union, the accounts of
24which are insured as required by the Illinois Credit Union Act
25or the Federal Credit Union Act, as applicable.
26(Source: P.A. 96-879, eff. 2-2-10.)
 

 

 

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1    (225 ILCS 45/2)  (from Ch. 111 1/2, par. 73.102)
2    Sec. 2. (a) If a purchaser selects a trust arrangement to
3fund the pre-need contract, all trust deposits as determined by
4Section 1b shall be made within 30 days of receipt.
5    (b) A trust established under this Act must be maintained:
6        (1) in a deposit account maintained by the seller as
7    trustee in a State or federal bank, savings and loan
8    association, or savings bank, the accounts of which are
9    insured by an agency of the federal government; or in a
10    share account or share certificate account maintained by
11    the seller as trustee in a State or federal credit union,
12    the accounts of which are insured as required by the
13    Illinois Credit Union Act or the Federal Credit Union Act,
14    as applicable;
15        (2) in a trust company authorized to do business in
16    Illinois; or
17        (3) with a corporate fiduciary as defined in Section
18    1-5.05 of the Corporate Fiduciary Act or with a foreign
19    corporate fiduciary recognized by Article IV of the
20    Corporate Fiduciary Act.
21    (c) Trust agreements and amendments to the trust agreements
22used to fund a pre-need contract shall be filed with the
23Comptroller.
24    (d) (Blank).
25    (e) A seller or provider shall furnish to the trustee and

 

 

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1depositary the name of each payor and the amount of payment on
2each such account for which deposit is being so made. Nothing
3shall prevent the trustee or a seller or provider acting as a
4trustee in accordance with this Act from commingling the
5deposits in any such trust fund for purposes of its management
6and the investment of its funds as provided in the Common Trust
7Fund Act. In addition, multiple trust funds maintained under
8this Act may be commingled or commingled with other funeral or
9burial related trust funds if all record keeping requirements
10imposed by law are met.
11    (f) Trust funds may be maintained in a financial
12institution described in subsection (b) that is located in a
13state adjoining this State where: (1) the financial institution
14is located within 50 miles of the border of this State, (2) its
15accounts are federally insured, and (3) it has registered with
16the Illinois Secretary of State for purposes of service of
17process. (Blank).
18    (g) Upon no less than 30 days prior notice to the
19Comptroller, the seller may change the trustee of the fund.
20Failure to provide the Comptroller with timely prior notice is
21an intentional violation of this Act.
22    (h) A trustee shall at least annually furnish to each
23purchaser a statement (1) containing the account value of the
24trust as of the date of the statement : (1) the receipts,
25disbursements, and inventory of the trust, including an
26explanation of any fees or expenses charged by the trustee

 

 

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1under Section 5 of this Act or otherwise, (2) an explanation of
2the purchaser's right to a refund, if any, under this Act, and
3(2) (3) identifying the primary regulator of the trust as a
4corporate fiduciary under state or federal law.
5(Source: P.A. 96-879, eff. 2-2-10; 97-593, eff. 8-26-11.)
 
6    (225 ILCS 45/4a)
7    Sec. 4a. Investment of funds.
8    (a) A trustee has a duty to invest and manage the trust
9and, with respect to the investment of trust funds, shall
10exercise the judgment and care under the circumstances then
11prevailing that persons of prudence, discretion, and
12intelligence exercise in the management of their own affairs,
13not in regard to speculation, but in regard to the permanent
14disposition of their funds, considering the probable income as
15well as the probable safety of their capital. If the amount of
16the funds to be entrusted exceeds $1,000,000, then the trustee
17has the duty to manage and invest the assets pursuant to the
18Prudent Investor Rule under the Trusts and Trustees Act.
19    (b) The trust shall be a single-purpose trust fund. In the
20event of the seller's bankruptcy, insolvency or assignment for
21the benefit of creditors, or an adverse judgment, the trust
22funds shall not be available to any creditor as assets of the
23seller or to pay any expenses of any bankruptcy or similar
24proceeding, but shall be distributed to the purchasers or
25managed for their benefit by the trustee holding the funds.

 

 

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1Except in an action by the Comptroller to revoke a license
2issued pursuant to this Act and for creation of a receivership
3as provided in this Act, the trust shall not be subject to
4judgment, execution, garnishment, attachment, or other seizure
5by process in bankruptcy or otherwise, nor to sale, pledge,
6mortgage, or other alienation, and shall not be assignable
7except as approved by the Comptroller. The changes made by
8Public Act 91-7 are intended to clarify existing law regarding
9the inability of licensees to pledge the trust.
10    (c) Because it is not known at the time of deposit or at
11the time that income is earned on the trust account to whom the
12principal and the accumulated earnings will be distributed for
13the purpose of determining the Illinois income tax due on these
14trust funds, the principal and any accrued earnings or losses
15related to each individual account shall be held in suspense
16until the final determination is made as to whom the account
17shall be paid. The beneficiary's estate shall not be
18responsible for any funeral and burial purchases listed in a
19pre-need contract if the pre-need contract is entered into on a
20guaranteed price basis.
21    If a pre-need contract is not a guaranteed price contract,
22then to the extent the proceeds of a non-guaranteed price
23pre-need contract cover the funeral and burial expenses for the
24beneficiary, no claim may be made against the estate of the
25beneficiary. A claim may be made against the beneficiary's
26estate if the charges for the funeral services and merchandise

 

 

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1at the time of use exceed the amount of the amount in trust
2plus the percentage of the sale proceeds initially retained by
3the seller or the face value of the life insurance policy or
4tax-deferred annuity.
5(Source: P.A. 96-879, eff. 2-2-10.)
 
6    Section 10. The Illinois Pre-Need Cemetery Sales Act is
7amended by changing Sections 14 and 15 as follows:
 
8    (815 ILCS 390/14)  (from Ch. 21, par. 214)
9    Sec. 14. Contract required.
10    (a) It is unlawful for any person doing business within
11this State to accept sales proceeds, either directly or
12indirectly, by any means unless the seller enters into a
13pre-need sales contract with the purchaser which meets the
14following requirements:
15        (1) A written sales contract shall be executed in at
16    least 11 point type in duplicate for each pre-need sale
17    made by a licensee, and a signed copy given to the
18    purchaser. Each completed contract shall be numbered and
19    shall contain: (i) the name and address of the purchaser,
20    the principal office of the licensee, and the parent
21    company of the licensee; (ii) the name of the person, if
22    known, who is to receive the cemetery merchandise, cemetery
23    services or the completed interment, entombment or
24    inurnment spaces under the contract; and (iii) specific

 

 

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1    identification of such merchandise, services or spaces to
2    be provided, if a specific space or spaces are contracted
3    for, and the price of the merchandise, services, or space
4    or spaces.
5        (2) In addition, such contracts must contain a
6    provision in distinguishing typeface as follows:
7        "Notwithstanding anything in this contract to the
8    contrary, you are afforded certain specific rights of
9    cancellation and refund under the Illinois Pre-Need
10    Cemetery Sales Act, enacted by the 84th General Assembly of
11    the State of Illinois".
12        (3) All pre-need sales contracts shall be sold on a
13    guaranteed price basis. At the time of performance of the
14    service or delivery of the merchandise, the seller shall be
15    prohibited from assessing the purchaser or his heirs or
16    assigns or duly authorized representative any additional
17    charges for the specific merchandise and services listed on
18    the pre-need sales contract.
19        (4) Each contract shall clearly disclose that the price
20    of the merchandise or services is guaranteed and shall
21    contain the following statement in 12 point bold type:
22        "THIS CONTRACT GUARANTEES THE BENEFICIARY THE SPECIFIC
23    GOODS, SERVICES, INTERMENT SPACES, ENTOMBMENT SPACES, AND
24    INURNMENT SPACES CONTRACTED FOR. NO ADDITIONAL CHARGES MAY
25    BE REQUIRED FOR DESIGNATED GOODS, SERVICES, AND SPACES.
26    ADDITIONAL CHARGES MAY BE INCURRED FOR UNEXPECTED

 

 

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1    EXPENSES."
2        (5) The pre-need sales contract shall provide that if
3    the particular cemetery services, cemetery merchandise, or
4    spaces specified in the pre-need contract are unavailable
5    at the time of delivery, the seller shall be required to
6    furnish services, merchandise, and spaces similar in style
7    and at least equal in quality of material and workmanship.
8        (6) The pre-need contract shall also disclose any
9    specific penalties to be incurred by the purchaser as a
10    result of failure to make payments; and penalties to be
11    incurred or moneys or refunds to be received as a result of
12    cancellation of the contract.
13        (7) The pre-need contract shall disclose the nature of
14    the relationship between the provider and the seller.
15        (8) Each pre-need contract that authorizes the
16    delivery of cemetery merchandise to a licensed and bonded
17    warehouse shall provide that prior to or upon delivery of
18    the merchandise to the warehouse the title to the
19    merchandise and a warehouse receipt shall be delivered to
20    the purchaser or beneficiary. The pre-need contract shall
21    contain the following statement in 12 point bold type:
22    "THIS CONTRACT AUTHORIZES THE DELIVERY OF MERCHANDISE TO A
23    LICENSED AND BONDED WAREHOUSE FOR STORAGE OF THE
24    MERCHANDISE UNTIL THE MERCHANDISE IS NEEDED BY THE
25    BENEFICIARY. DELIVERY OF THE MERCHANDISE IN THIS MANNER MAY
26    PRECLUDE REFUND OF SALE PROCEEDS THAT ARE ATTRIBUTABLE TO

 

 

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1    THE DELIVERED MERCHANDISE."
2        The purchaser shall initial the statement at the time
3    of entry into the pre-need contract.
4        (9) Each pre-need contract that authorizes the
5    placement of cemetery merchandise at the site of its
6    ultimate use prior to the time that the merchandise is
7    needed by the beneficiary shall contain the following
8    statement in 12 point bold type:
9    "THIS CONTRACT AUTHORIZES THE PLACEMENT OF MERCHANDISE AT
10    THE SITE OF ITS ULTIMATE USE PRIOR TO THE TIME THAT THE
11    MERCHANDISE IS NEEDED BY THE BENEFICIARY. DELIVERY OF THE
12    MERCHANDISE IN THIS MANNER MAY PRECLUDE REFUND OF SALE
13    PROCEEDS THAT ARE ATTRIBUTABLE TO THE DELIVERED
14    MERCHANDISE."
15        The purchaser shall initial the statement at the time
16    of entry into the pre-need contract.
17        (10) Each pre-need contract that is funded by a trust
18    shall clearly identify the trustee's name and address and
19    the primary state or federal regulator of the trustee as a
20    corporate fiduciary.
21    (b) Every pre-need sales contract must be in writing. The
22Comptroller may by rule develop a model pre-need sales contract
23form that meets the requirements of this Act.
24    (c) To the extent the Rule is applicable, every pre-need
25sales contract is subject to the Federal Trade Commission Rule
26concerning the Cooling-Off Period for Door-to-Door Sales (16

 

 

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1CFR Part 429).
2    (d) No pre-need sales contract may be entered into in this
3State unless there is a provider for the cemetery merchandise,
4cemetery services, and undeveloped interment, inurnment, and
5entombment spaces being sold. If the seller is not the
6provider, then the seller must have a binding agreement with a
7provider, and the identity of the provider and the nature of
8the agreement between the seller and the provider must be
9disclosed in the pre-need sales contract at the time of sale
10and before the receipt of any sale proceeds. The failure to
11disclose the identity of the provider, the nature of the
12agreement between the seller and the provider, or any changes
13thereto to the purchaser and beneficiary, or the failure to
14make the disclosures required by this Section constitutes an
15intentional violation of this Act.
16    (e) No pre-need contract may be entered into in this State
17unless it is accompanied by a funding mechanism permitted under
18this Act and unless the seller is licensed by the Comptroller
19as provided in this Act. Nothing in this Act is intended to
20relieve providers or sellers of pre-need contracts from being
21licensed under any other Act required for their profession or
22business or from being subject to the rules promulgated to
23regulate their profession or business, including rules on
24solicitation and advertisement.
25    (f) No pre-need contract may be entered into in this State
26unless the seller explains to the purchaser the terms of the

 

 

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1pre-need contract prior to the purchaser signing and the
2purchaser initials a statement in the contract confirming that
3the seller has explained the terms of the contract prior to the
4purchaser signing.
5    (g) The State Comptroller shall develop a booklet for
6consumers in plain English describing the scope, application,
7and consumer protections of this Act. After the booklet is
8developed, no pre-need contract may be sold in this State
9unless the seller distributes to the purchaser prior to the
10sale a booklet developed or approved for use by the State
11Comptroller.
12(Source: P.A. 96-879, eff. 2-2-10.)
 
13    (815 ILCS 390/15)  (from Ch. 21, par. 215)
14    Sec. 15. (a) Whenever a seller receives anything of value
15under a pre-need sales contract, the person receiving such
16value shall deposit 50% of all proceeds received into one or
17more trust funds maintained pursuant to this Section, except
18that, in the case of proceeds received for the purchase of
19outer burial containers, 85% of the proceeds shall be deposited
20into one or more trust funds. Such deposits shall be made until
21the amount deposited in trust equals 50% of the sales price of
22the cemetery merchandise, cemetery services and undeveloped
23spaces included in such contract, except that, in the case of
24deposits for outer burial containers, deposits shall be made
25until the amount deposited in trust equals 85% of the sales

 

 

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1price. In the event an installment contract is factored,
2discounted or sold to a third party, the seller shall deposit
3an amount equal to 50% of the sales price of the installment
4contract, except that, for the portion of the contract
5attributable to the sale of outer burial containers, the seller
6shall deposit an amount equal to 85% of the sales price.
7Proceeds required to be deposited in trust which are
8attributable to cemetery merchandise and cemetery services
9shall be held in a "Cemetery Merchandise Trust Fund". Proceeds
10required to be deposited in trust which are attributable to the
11sale of undeveloped interment, entombment or inurnment spaces
12shall be held in a "Pre-construction Trust Fund". If
13merchandise is delivered for storage in a bonded warehouse, as
14authorized herein, and payment of transportation or other
15charges totaling more than $20 will be required in order to
16secure delivery to the site of ultimate use, upon such delivery
17to the warehouse the seller shall deposit to the trust fund the
18full amount of the actual or estimated transportation charge.
19Transportation charges which have been prepaid by the seller
20shall not be deposited to trust funds maintained pursuant to
21this Section. As used in this Section, "all proceeds" means the
22entire amount paid by a purchaser in connection with a pre-need
23sales contract, including finance charges and Cemetery Care Act
24contributions, but excluding sales taxes and credit life
25insurance premiums.
26    (b) The seller shall act as trustee of all amounts received

 

 

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1for cemetery merchandise, services, or undeveloped spaces
2until those amounts have been deposited into the trust fund.
3All trust deposits required by this Act shall be made within 30
4days following the end of the month of receipt. The seller must
5retain a corporate fiduciary as an independent trustee for any
6amount of trust funds. Upon 30 days' prior written notice from
7the seller to the Comptroller, the seller may change the
8trustee of the trust fund. Failure to provide the Comptroller
9with timely prior notice is an intentional violation of this
10Act.
11    (c) A trust established under this Act must be maintained:
12        (1) in a deposit account maintained by the seller as
13    trustee in a State or federal bank, savings and loan
14    association, or savings bank, the accounts of which are
15    insured by an agency of the federal government; or in a
16    share account or share certificate account maintained by
17    the seller as trustee in a State or federal credit union,
18    the accounts of which are insured as required by the
19    Illinois Credit Union Act or the Federal Credit Union Act,
20    as applicable;
21        (2) in a trust company authorized to do business in
22    Illinois;
23        (3) in an investment company authorized to do business
24    in Illinois insured by the Securities Brokers Insurance
25    Corporation; or
26        (4) with a corporate fiduciary as defined in Section

 

 

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1    1-5.05 of the Corporate Fiduciary Act or with a foreign
2    corporate fiduciary recognized by Article IV of the
3    Corporate Fiduciary Act.
4    (d) Funds deposited in the trust account shall be
5identified in the records of the seller by the name of the
6purchaser. Nothing shall prevent the trustee from commingling
7the deposits in any such trust fund for purposes of the
8management thereof and the investment of funds therein as
9provided in the "Common Trust Fund Act", approved June 24,
101949, as amended. In addition, multiple trust funds maintained
11pursuant to this Act may be commingled or commingled with other
12funeral or burial related trust funds, provided that all record
13keeping requirements imposed by or pursuant to law are met.
14    (e) In lieu of a pre-construction trust fund, a seller of
15undeveloped interment, entombment or inurnment spaces may
16obtain and file with the Comptroller a performance bond in an
17amount at least equal to 50% of the sales price of the
18undeveloped spaces or the estimated cost of completing
19construction, whichever is greater. The bond shall be
20conditioned on the satisfactory construction and completion of
21the undeveloped spaces as required in Section 19 of this Act.
22    Each bond obtained under this Section shall have as surety
23thereon a corporate surety company incorporated under the laws
24of the United States, or a State, the District of Columbia or a
25territory or possession of the United States. Each such
26corporate surety company must be authorized to provide

 

 

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1performance bonds as required by this Section, have paid-up
2capital of at least $250,000 in cash or its equivalent and be
3able to carry out its contracts. Each pre-need seller must
4provide to the Comptroller, for each corporate surety company
5such seller utilizes, a statement of assets and liabilities of
6the corporate surety company sworn to by the president and
7secretary of the corporation by January 1 of each year.
8    The Comptroller shall prohibit pre-need sellers from doing
9new business with a corporate surety company if the company is
10insolvent or is in violation of this Section. In addition the
11Comptroller may direct a pre-need seller to reinstate a
12pre-construction trust fund upon the Comptroller's
13determination that the corporate surety company no longer is
14sufficient security.
15    All performance bonds issued pursuant to this Section must
16be irrevocable during the statutory term for completing
17construction specified in Section 19 of this Act, unless
18terminated sooner by the completion of construction.
19    (f) Whenever any pre-need contract shall be entered into
20and include 1) items of cemetery merchandise and cemetery
21services, and 2) rights to interment, inurnment or entombment
22in completed spaces without allocation of the gross sale price
23among the items sold, the application of payments received
24under the contract shall be allocated, first to the right to
25interment, inurnment or entombment, second to items of cemetery
26merchandise and cemetery services, unless some other

 

 

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1allocation is clearly provided in the contract.
2    (g) Any person engaging in pre-need sales who enters into a
3combination sale which involves the sale of items covered by a
4trust or performance bond requirement and any item not covered
5by any entrustment or bond requirement, shall be prohibited
6from increasing the gross sales price of those items not
7requiring entrustment with the purpose of allocating a lesser
8gross sales price to items which require a trust deposit or a
9performance bond.
10(Source: P.A. 96-879, eff. 2-2-10; 97-593, eff. 8-26-11.)

 

 

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1 INDEX
2 Statutes amended in order of appearance
3    225 ILCS 45/1from Ch. 111 1/2, par. 73.101
4    225 ILCS 45/1a-1
5    225 ILCS 45/1bfrom Ch. 111 1/2, par. 73.101b
6    225 ILCS 45/2from Ch. 111 1/2, par. 73.102
7    225 ILCS 45/4a
8    815 ILCS 390/14from Ch. 21, par. 214
9    815 ILCS 390/15from Ch. 21, par. 215