Full Text of HB0469 101st General Assembly
HB0469ham001 101ST GENERAL ASSEMBLY | Rep. Jay Hoffman Filed: 3/19/2019
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| 1 | | AMENDMENT TO HOUSE BILL 469
| 2 | | AMENDMENT NO. ______. Amend House Bill 469 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The Illinois Funeral or Burial Funds Act is | 5 | | amended by changing Sections 1a and 1a-1 and by adding Section | 6 | | 1c 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 | 9 | | shall have
the meanings specified, unless the context clearly | 10 | | requires another meaning:
| 11 | | "Agent" means a person authorized by a seller to offer, | 12 | | sell, or solicit the sale of a pre-need sales contract on | 13 | | behalf of the seller and includes an employee or independent | 14 | | contractor of the seller. | 15 | | "Beneficiary" means the person specified in the pre-need | 16 | | contract upon
whose death funeral services or merchandise shall |
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| 1 | | be provided or delivered.
| 2 | | "Licensee" means a seller of a pre-need contract who has
| 3 | | been licensed by
the Comptroller under this Act.
| 4 | | "Outer burial container" means any container made of | 5 | | concrete,
steel, wood, fiberglass or similar material, used | 6 | | solely at the interment
site, and designed and used exclusively | 7 | | to surround or enclose a separate
casket and to support the | 8 | | earth above such casket, commonly known as a
burial vault, | 9 | | grave box or grave liner, but not including a lawn
crypt as | 10 | | defined in the Illinois Pre-need Cemetery Sales Act.
| 11 | | "Parent company" means a corporation owning more than 12 | 12 | | cemeteries or
funeral homes in more than one state.
| 13 | | "Person" means any person, partnership, association, | 14 | | corporation, or
other entity.
| 15 | | "Pre-need contract" means any agreement or contract, or any | 16 | | series or
combination of agreements or contracts, whether | 17 | | funded by trust deposits or
life insurance policies or | 18 | | annuities, which has for a purpose the furnishing
or | 19 | | performance of funeral services or the furnishing or delivery | 20 | | of any
personal property, merchandise, or services of any | 21 | | nature in connection with
the final disposition of a dead human | 22 | | body. Nothing in this Act is intended to
regulate the content | 23 | | of a life insurance policy or a tax-deferred annuity.
| 24 | | "Provider" means a person who is obligated for furnishing | 25 | | or performing
funeral services or the furnishing or delivery of | 26 | | any personal property,
merchandise, or services of any nature |
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| 1 | | in connection with the final disposition
of a dead human body.
| 2 | | "Purchaser" means the person who originally paid the money | 3 | | under or in
connection with a pre-need contract.
| 4 | | "Sales proceeds" means the entire amount paid to a seller, | 5 | | exclusive
of sales taxes paid by the seller, finance charges | 6 | | paid by the purchaser, and
credit life, accident or disability | 7 | | insurance premiums, upon any agreement or
contract, or series | 8 | | or combination of agreements or contracts, for the purpose
of | 9 | | performing funeral services or furnishing personal property, | 10 | | merchandise, or
services of any nature in connection with the | 11 | | final disposition of a dead human
body, including, but not | 12 | | limited to, the retail price paid for such services
and | 13 | | personal property and merchandise.
| 14 | | "Purchase price" means sales proceeds less finance charges | 15 | | on
retail
installment contracts.
| 16 | | "Seller" means the person who sells or
offers to sell the | 17 | | pre-need contract
to a purchaser, whether funded by a trust | 18 | | agreement, life insurance policy,
or tax-deferred annuity.
| 19 | | "Trustee" means a person authorized to hold funds under | 20 | | this 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
| 25 | | within
this State to accept sales proceeds from a purchaser, |
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| 1 | | either directly or
indirectly by any means, unless the seller | 2 | | or seller's agent enters into a
pre-need contract
with the | 3 | | purchaser 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 |
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| 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 |
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| 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 |
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| 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 | 11 | | authorized to act as an agent for the seller as required under | 12 | | this Act. | 13 | | An agent must provide to the purchaser a written statement | 14 | | containing: | 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 | 21 | | 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 unless
| 24 | | there is a provider for the services and personal property | 25 | | being
sold. If the seller is not a provider, then the seller | 26 | | must have a binding agreement with a provider, and
the identity |
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| 1 | | of the provider and the nature of the agreement between the | 2 | | seller
and the provider shall be disclosed in the pre-need | 3 | | contract at the time of the
sale and before the receipt of any | 4 | | sales proceeds. The failure to disclose the
identity of the | 5 | | provider, the nature of the agreement between the seller and
| 6 | | the provider, or any changes thereto to the purchaser and | 7 | | beneficiary, or the
failure to make the disclosures required in | 8 | | subdivision (a)(1), constitutes an
intentional violation of | 9 | | this Act.
| 10 | | (d) All pre-need contracts must be in writing in at least | 11 | | 11 point type,
numbered, and executed in duplicate. A signed
| 12 | | copy of the pre-need contract must be provided to the purchaser | 13 | | at the time of
entry into the pre-need contract. The | 14 | | Comptroller may by rule develop
a model pre-need contract form | 15 | | that meets the requirements of this Act.
| 16 | | (e) The State Comptroller shall by rule develop a booklet | 17 | | for
consumers in plain English describing
the scope, | 18 | | application, and consumer protections of this Act. After the
| 19 | | adoption of these rules, no pre-need contract shall be sold in | 20 | | this State
unless (i) the seller distributes to the purchaser | 21 | | prior to the sale a
booklet promulgated or approved for use by | 22 | | the State Comptroller; (ii) the
seller explains to the | 23 | | purchaser the terms of the pre-need contract prior to
the | 24 | | purchaser signing; and (iii) the purchaser initials a statement | 25 | | in the
contract confirming that the seller has explained the | 26 | | terms of the contract
prior to the purchaser signing.
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| 1 | | (f) All sales proceeds received in connection with a | 2 | | pre-need
contract shall be deposited into a trust account as | 3 | | provided in
Section 1b and Section 2 of this Act, or shall be | 4 | | used to purchase a life
insurance policy or tax-deferred | 5 | | annuity as provided in Section 2a
of this Act.
| 6 | | (g) No pre-need contract shall be sold in this State unless | 7 | | it is
accompanied by a funding mechanism permitted under this | 8 | | Act, and unless the
seller is licensed by the Comptroller as | 9 | | provided in Section 3
of this Act.
Nothing in this Act is | 10 | | intended to relieve sellers of pre-need
contracts from
being | 11 | | licensed under any other Act required for their profession or | 12 | | business,
and being subject to the rules promulgated to | 13 | | regulate their profession or
business, including rules on | 14 | | solicitation 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 | 18 | | trustees. A seller may not be an affiliate, a parent company, | 19 | | or a subsidiary organization of the trustee acting as a | 20 | | fiduciary of a trust to hold consideration paid for services or | 21 | | merchandise subject to a contract entered into under this Act | 22 | | by the seller or seller's agent and a purchaser.
| 23 | | Section 99. Effective date. This Act takes effect upon | 24 | | becoming law.".
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