State of Illinois
90th General Assembly
Legislation

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[ Introduced ][ Engrossed ][ House Amendment 001 ]

90_HB0277enr

      225 ILCS 45/1a-1
      760 ILCS 100/1            from Ch. 21, par. 64.1
      815 ILCS 390/3            from Ch. 21, par. 203
          Amends  the  Illinois  Funeral  or  Burial   Funds   Act.
      Provides that the booklet that the Comptroller is required to
      develop  under  the Act shall be written in plain English and
      shall describe all disclosures required under that  Act  (now
      the  booklet  shall  describe the statutory requirements, the
      different funding mechanisms, and  all  disclosures  required
      under  the  Act).   Amends  the  Cemetery  Care  Act  and the
      Illinois Pre-Need Cemetery Sales Act.   Adds  a  caption  and
      makes technical changes to the short title Section of each of
      those Acts.
                                                    LRB9000620LDdvA
HB0277 Enrolled                               LRB9000620LDdvA
 1        AN  ACT  in  relation to burial practices, amending named
 2    Acts.
 3        Be it enacted by the People of  the  State  of  Illinois,
 4    represented in the General Assembly:
 5        Section  5.   The Illinois Funeral or Burial Funds Act is
 6    amended by changing Section 1a-1 as follows:
 7        (225 ILCS 45/1a-1)
 8        Sec. 1a-1.  Pre-need contracts.
 9        (a)  It shall be unlawful for any seller  doing  business
10    within  this State to accept sales proceeds from a purchaser,
11    either directly or indirectly by any means, unless the seller
12    enters into a pre-need  contract  with  the  purchaser  which
13    meets the following requirements:
14             (1)  It states the name and address of the principal
15        office  of  the  provider,  or clearly discloses that the
16        provider  will  be  selected  by  the  purchaser  or  the
17        purchaser's survivor or legal representative at  a  later
18        date, except that no contract shall contain any provision
19        restricting  the  right  of the contract purchaser during
20        his or her lifetime in making his or her own selection of
21        a provider.
22             (2)  It clearly identifies  the  seller's  name  and
23        address, the purchaser and the beneficiary, if other than
24        the  purchaser,  and  the provider, if different than the
25        seller or discloses that the provider will be selected at
26        a later date.
27             (3)  It  contains  a  complete  description  of  the
28        funeral merchandise and services to be provided  and  the
29        price  of  the  merchandise  and services, and it clearly
30        discloses  whether  the  price  of  the  merchandise  and
31        services is guaranteed or not guaranteed as to price.
HB0277 Enrolled             -2-               LRB9000620LDdvA
 1                  (A)  Each  guaranteed  price   contract   shall
 2             contain  the  following  statement  in 12 point bold
 3             type:
 4                  THIS CONTRACT GUARANTEES  THE  BENEFICIARY  THE
 5             SPECIFIC  GOODS  AND  SERVICES  CONTRACTED  FOR.  NO
 6             ADDITIONAL CHARGES MAY BE REQUIRED.  FOR  DESIGNATED
 7             GOODS   AND  SERVICES,  ADDITIONAL  CHARGES  MAY  BE
 8             INCURRED FOR UNEXPECTED EXPENSES INCLUDING, BUT  NOT
 9             LIMITED  TO, CASH ADVANCES, SHIPPING OF REMAINS FROM
10             A DISTANT PLACE, OR DESIGNATED HONORARIA ORDERED  OR
11             DIRECTED BY SURVIVORS.
12                  (B)  Each  non-guaranteed  price contract shall
13             contain the following statement  in  12  point  bold
14             type:
15                  THIS  CONTRACT DOES NOT GUARANTEE THE PRICE THE
16             BENEFICIARY WILL  PAY  FOR  ANY  SPECIFIC  GOODS  OR
17             SERVICES.   ANY  FUNDS  PAID UNDER THIS CONTRACT ARE
18             ONLY A DEPOSIT TO BE APPLIED TOWARD THE FINAL  PRICE
19             OF THE GOODS OR SERVICES CONTRACTED FOR.  ADDITIONAL
20             CHARGES MAY BE REQUIRED.
21             (4)  It provides that if the particular supplies and
22        services   specified   in   the   pre-need  contract  are
23        unavailable at the time of delivery, the  provider  shall
24        be  required  to furnish supplies and services similar in
25        style and at least  equal  in  quality  of  material  and
26        workmanship.
27             (5)  It  discloses  any  penalties  or restrictions,
28        including but not limited to geographic  restrictions  or
29        the  inability  of the provider, if selected, to perform,
30        on the delivery of  merchandise,  services,  or  pre-need
31        contract guarantees.
32             (6)  Regardless   of   the  method  of  funding  the
33        pre-need contract, the following must be disclosed:
34                  (A)  Whether the pre-need  contract  is  to  be
HB0277 Enrolled             -3-               LRB9000620LDdvA
 1             funded by a trust, life insurance, or an annuity;
 2                  (B)  The  nature  of the relationship among the
 3             entity funding the pre-need contract, the  provider,
 4             if selected, and the seller;
 5                  (C)  The impact on the pre-need contract of (i)
 6             any changes in the funding arrangement including but
 7             not   limited   to   changes   in   the  assignment,
 8             beneficiary designation, or use of the  funds;  (ii)
 9             any   penalties  to  be  incurred  by  the  contract
10             purchaser as a result of failure to  make  payments;
11             (iii)  penalties to be incurred or moneys or refunds
12             to be received as a  result  of  cancellations;  and
13             (iv) all relevant information concerning what occurs
14             and whether any entitlements or obligations arise if
15             there  is  a  difference between the proceeds of the
16             particular  funding  arrangement  and   the   amount
17             actually needed to pay for the funeral at-need; and
18                  (D)  The  method  of  changing or selecting the
19             designation of the provider.
20        (b)  All pre-need contracts are subject  to  the  Federal
21    Trade  Commission  Rule concerning the Cooling-Off Period for
22    Door-to-Door Sales (16 CFR Part 429).
23        (c)  No pre-need contract shall be  sold  in  this  State
24    unless  there  is  a  provider  for the services and personal
25    property being sold, or unless disclosure has  been  made  by
26    the  seller as provided in subdivision (a)(1).  If the seller
27    is not a provider and a provider has been selected, then  the
28    seller must have a binding agreement with a provider, and the
29    identity  of  the  provider  and  the nature of the agreement
30    between the seller and the provider shall be disclosed in the
31    pre-need contract at the time of  the  sale  and  before  the
32    receipt of any sales proceeds.  Any subsequent change made in
33    the  identity of the provider shall be approved in writing by
34    the purchaser and beneficiary within 30 days after it occurs.
HB0277 Enrolled             -4-               LRB9000620LDdvA
 1    The failure to disclose the identity  of  the  provider,  the
 2    nature  of the agreement between the seller and the provider,
 3    or any changes thereto to the purchaser and  beneficiary,  or
 4    the  failure  to make the disclosures required in subdivision
 5    (a)(1), constitutes an intentional violation of this Act.
 6        (d)  All pre-need contracts must be  in  writing  and  no
 7    pre-need  contract  form  shall  be used without prior filing
 8    with the  Comptroller.   The  Comptroller  shall  review  all
 9    pre-need  contract  forms  and  shall  prohibit  the  use  of
10    contract forms which do not meet the requirements of this Act
11    upon   written  notification  to  the  seller.   Any  use  or
12    attempted use of any oral pre-need contract  or  any  written
13    pre-need contract in a form not filed with the Comptroller or
14    in  a  form  which does not meet the requirements of this Act
15    shall be deemed a violation  of  this  Act.   Life  insurance
16    policies,  tax-deferred  annuities,  endorsements, riders, or
17    applications for life insurance or tax-deferred annuities are
18    not subject to filing with the Comptroller.  The  Comptroller
19    may  by  rule  develop  a  model pre-need contract form which
20    meets the requirements of this Act.
21        (e)  The  State  Comptroller  shall  by  rule  develop  a
22    booklet for  consumers  in  plain  English  describing  which
23    describes  the  statutory requirements, the different funding
24    mechanisms,  and  the  scope,   application,   and   consumer
25    protections  of  all  disclosures  required  under  this Act.
26    After the adoption of these rules, no pre-need contract shall
27    be sold in this State unless the seller  distributes  to  the
28    purchaser prior to the sale a booklet promulgated or approved
29    for use by the State Comptroller.
30        (f)  All  sales  proceeds  received  in connection with a
31    pre-need contract shall be deposited into a trust account  as
32    provided in Section 1b and Section 2 of this Act, or shall be
33    used  to  purchase  a  life  insurance policy or tax-deferred
34    annuity as provided in Section 2a of this Act.
HB0277 Enrolled             -5-               LRB9000620LDdvA
 1        (g)  No pre-need contract shall be  sold  in  this  State
 2    unless  it  is  accompanied  by a funding mechanism permitted
 3    under this Act, and unless the  seller  is  licensed  by  the
 4    Comptroller as provided in Section 3 of this Act.  Nothing in
 5    this Act is intended to relieve sellers of pre-need contracts
 6    from  being  licensed  under any other Act required for their
 7    profession or  business,  and  being  subject  to  the  rules
 8    promulgated   to   regulate  their  profession  or  business,
 9    including rules on solicitation and advertisement.
10    (Source: P.A. 88-477.)
11        Section 10.  The Cemetery Care Act is amended by changing
12    Section 1 as follows:
13        (760 ILCS 100/1) (from Ch. 21, par. 64.1)
14        Sec. 1. Short title.  This Act  may  be  cited  shall  be
15    known as the "Cemetery Care Act."
16    (Source: Laws 1947, p. 338.)
17        Section  15.  The Illinois Pre-Need Cemetery Sales Act is
18    amended by changing Section 3 as follows:
19        (815 ILCS 390/3) (from Ch. 21, par. 203)
20        Sec. 3.  Short title.  This Act shall be known and may be
21    cited as the "Illinois Pre-Need Cemetery Sales Act".
22    (Source: P.A. 84-239.)

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