Full Text of HB5811 98th General Assembly
HB5811 98TH GENERAL ASSEMBLY |
| | 98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014 HB5811 Introduced , by Rep. Dan Brady SYNOPSIS AS INTRODUCED: |
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Amends the Illinois Funeral or Burial Funds Act. Provides that no provider of a pre-need contract shall include in the terms of the contract a date by which the pre-need contract must be claimed by a beneficiary. Further provides that a beneficiary shall be paid the proceeds of a pre-need contract only under circumstances that result in the termination of a contract such as the death of the purchaser or withdrawal by the purchaser or beneficiary.
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| | A BILL FOR |
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| 1 | | AN ACT concerning regulation.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Funeral or Burial Funds Act is | 5 | | amended by changing Section 1a-1 as follows:
| 6 | | (225 ILCS 45/1a-1)
| 7 | | Sec. 1a-1. Pre-need contracts.
| 8 | | (a) It shall be unlawful for any seller doing business
| 9 | | within
this State to accept sales proceeds from a purchaser, | 10 | | either directly or
indirectly by any means, unless the seller | 11 | | enters into a
pre-need contract
with the purchaser which meets | 12 | | the following requirements:
| 13 | | (1) It states the name and address of the principal | 14 | | office of the
seller and the parent company of the
seller, | 15 | | if
any.
| 16 | | (1.5) If funded by a trust, it clearly identifies the | 17 | | trustee's name and address and the primary state or federal | 18 | | regulator of the trustee as a corporate fiduciary. | 19 | | (1.7) If funded by life insurance, it clearly | 20 | | identifies the life insurance provider and the primary | 21 | | regulator of the life insurance provider.
| 22 | | (2) It clearly identifies the provider's name and
| 23 | | address,
the purchaser, and
the beneficiary, if other than |
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| 1 | | the purchaser.
| 2 | | (2.5) If the provider has branch locations, the | 3 | | contract
gives the purchaser the opportunity to identify | 4 | | the branch
at which the funeral will be provided.
| 5 | | (3) It contains a complete description of the funeral | 6 | | merchandise and
services to be provided and the price of | 7 | | the merchandise and services, and it
clearly discloses | 8 | | whether the price of the merchandise and services is
| 9 | | guaranteed or not guaranteed as to price.
| 10 | | (A) Each guaranteed price contract shall contain | 11 | | the following
statement in 12 point bold type:
| 12 | | THIS CONTRACT GUARANTEES THE BENEFICIARY THE | 13 | | SPECIFIC GOODS AND
SERVICES CONTRACTED FOR. NO | 14 | | ADDITIONAL CHARGES MAY BE REQUIRED.
FOR DESIGNATED | 15 | | GOODS AND SERVICES, ADDITIONAL CHARGES MAY BE INCURRED | 16 | | FOR
UNEXPECTED EXPENSES INCLUDING, BUT NOT LIMITED TO, | 17 | | CASH ADVANCES, SHIPPING OF
REMAINS FROM A DISTANT | 18 | | PLACE, OR DESIGNATED HONORARIA ORDERED OR DIRECTED BY
| 19 | | SURVIVORS.
| 20 | | (B) Except as provided in subparagraph (C) of this | 21 | | paragraph (3),
each non-guaranteed price contract | 22 | | shall contain the following
statement in 12 point bold | 23 | | type:
| 24 | | THIS CONTRACT DOES NOT GUARANTEE THE PRICE THE | 25 | | BENEFICIARY WILL PAY FOR
ANY SPECIFIC GOODS OR | 26 | | SERVICES. ANY FUNDS PAID UNDER THIS CONTRACT ARE ONLY A
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| 1 | | DEPOSIT TO BE APPLIED TOWARD THE FINAL PRICE OF THE | 2 | | GOODS OR SERVICES
CONTRACTED FOR. ADDITIONAL CHARGES | 3 | | MAY BE REQUIRED.
| 4 | | (C) If a non-guaranteed price contract may
| 5 | | subsequently become guaranteed, the contract shall | 6 | | clearly
disclose the nature of the guarantee and the | 7 | | time,
occurrence, or event upon which the contract | 8 | | shall become a
guaranteed price contract.
| 9 | | (4) It provides that if the particular supplies and | 10 | | services specified
in the pre-need contract are | 11 | | unavailable at the time of delivery, the provider
shall be | 12 | | required to furnish supplies and services similar in style | 13 | | and at
least equal in quality of material and workmanship.
| 14 | | (5) It discloses any penalties or restrictions, | 15 | | including
but not limited
to geographic restrictions or the | 16 | | inability of the provider
to
perform, on the delivery of | 17 | | merchandise, services, or pre-need contract
guarantees.
| 18 | | (6) Regardless of the method of funding the pre-need | 19 | | contract, the
following must be disclosed:
| 20 | | (A) Whether the pre-need contract is to be funded | 21 | | by a trust, life
insurance, or an annuity;
| 22 | | (B) The nature of the relationship among the person
| 23 | | funding the
pre-need contract, the provider, and the
| 24 | | seller; and
| 25 | | (C) The impact on the pre-need contract of (i) any | 26 | | changes in the
funding arrangement including but not |
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| 1 | | limited to changes in the assignment,
beneficiary | 2 | | designation, or use of the funds; (ii) any specific | 3 | | penalties
to be incurred
by the contract purchaser as a | 4 | | result of failure to make payments; (iii)
penalties to | 5 | | be incurred or moneys or refunds to be received as a | 6 | | result of
cancellations; and (iv) all relevant | 7 | | information concerning what occurs and
whether any | 8 | | entitlements or obligations arise if there is a | 9 | | difference between
the proceeds of the particular | 10 | | funding arrangement and the amount actually
needed to | 11 | | pay for the funeral at-need.
| 12 | | (D) The method of changing the
provider.
| 13 | | (b) All pre-need contracts are subject to the Federal Trade | 14 | | Commission Rule
concerning the Cooling-Off Period for | 15 | | Door-to-Door Sales (16 CFR Part 429).
| 16 | | (c) No pre-need contract shall be sold in this State unless
| 17 | | there is a provider for the services and personal property | 18 | | being
sold. If the seller is not a provider, then the seller | 19 | | must have a binding agreement with a provider, and
the identity | 20 | | of the provider and the nature of the agreement between the | 21 | | seller
and the provider shall be disclosed in the pre-need | 22 | | contract at the time of the
sale and before the receipt of any | 23 | | sales proceeds. The failure to disclose the
identity of the | 24 | | provider, the nature of the agreement between the seller and
| 25 | | the provider, or any changes thereto to the purchaser and | 26 | | beneficiary, or the
failure to make the disclosures required in |
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| 1 | | subdivision (a)(1), constitutes an
intentional violation of | 2 | | this Act.
| 3 | | (d) All pre-need contracts must be in writing in at least | 4 | | 11 point type,
numbered, and executed in duplicate. A signed
| 5 | | copy of the pre-need contract must be provided to the purchaser | 6 | | at the time of
entry into the pre-need contract. The | 7 | | Comptroller may by rule develop
a model pre-need contract form | 8 | | that meets the requirements of this Act.
| 9 | | (e) The State Comptroller shall by rule develop a booklet | 10 | | for
consumers in plain English describing
the scope, | 11 | | application, and consumer protections of this Act. After the
| 12 | | adoption of these rules, no pre-need contract shall be sold in | 13 | | this State
unless (i) the seller distributes to the purchaser | 14 | | prior to the sale a
booklet promulgated or approved for use by | 15 | | the State Comptroller; (ii) the
seller explains to the | 16 | | purchaser the terms of the pre-need contract prior to
the | 17 | | purchaser signing; and (iii) the purchaser initials a statement | 18 | | in the
contract confirming that the seller has explained the | 19 | | terms of the contract
prior to the purchaser signing.
| 20 | | (f) All sales proceeds received in connection with a | 21 | | pre-need
contract shall be deposited into a trust account as | 22 | | provided in
Section 1b and Section 2 of this Act, or shall be | 23 | | used to purchase a life
insurance policy or tax-deferred | 24 | | annuity as provided in Section 2a
of this Act.
| 25 | | (g) No pre-need contract shall be sold in this State unless | 26 | | it is
accompanied by a funding mechanism permitted under this |
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| 1 | | Act, and unless the
seller is licensed by the Comptroller as | 2 | | provided in Section 3
of this Act.
Nothing in this Act is | 3 | | intended to relieve sellers of pre-need
contracts from
being | 4 | | licensed under any other Act required for their profession or | 5 | | business,
and being subject to the rules promulgated to | 6 | | regulate their profession or
business, including rules on | 7 | | solicitation and advertisement.
| 8 | | (h) No provider shall include in the terms of a pre-need | 9 | | contract a date by which the pre-need contract must be claimed | 10 | | by a beneficiary. A beneficiary shall be paid the proceeds of a | 11 | | pre-need contract only under circumstances that result in the | 12 | | termination of a contract, including, but not limited to, the | 13 | | death of the purchaser or withdrawal by the purchaser or | 14 | | beneficiary. | 15 | | (Source: P.A. 96-879, eff. 2-2-10.)
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