Full Text of HB3227 97th General Assembly
HB3227 97TH GENERAL ASSEMBLY |
| | 97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012 HB3227 Introduced 2/24/2011, by Rep. Dan Brady SYNOPSIS AS INTRODUCED: |
| 225 ILCS 45/1a-1 | | 225 ILCS 45/1a-5 new | | 225 ILCS 45/3 | from Ch. 111 1/2, par. 73.103 | 815 ILCS 390/13.5 new | | 815 ILCS 390/14 | from Ch. 21, par. 214 |
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Amends the Illinois Funeral or Burial Funds Act. Sets forth (i) additional disclosures and requirements for pre-need contracts, (ii) certain specified requirements for the solicitation of pre-need funeral consumers under the Act, and (iii) additional requirements concerning recordkeeping by the licensee. Makes other changes. Amends the Illinois Pre-Need Cemetery Sales Act. Sets forth (i) certain specified requirements for the solicitation of pre-need consumers under the Act and (ii) additional disclosures and requirements for pre-need contracts.
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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 Sections 1a-1 and 3 and by adding Section | 6 | | 1a-5 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 meets | 13 | | the following requirements:
| 14 | | (1) It states the name and address of the principal | 15 | | office of the
seller and the parent company of the
seller, | 16 | | if
any.
| 17 | | (1.5) If funded by a trust, it clearly identifies the | 18 | | trustee's name and address and the primary state or federal | 19 | | regulator of the trustee as a corporate fiduciary. | 20 | | (1.7) If funded by life insurance, it clearly | 21 | | identifies the life insurance provider and the primary | 22 | | regulator of the life insurance provider.
| 23 | | (2) It clearly identifies the provider's name and
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| 1 | | address,
the purchaser, and
the beneficiary, if other than | 2 | | the purchaser.
| 3 | | (2.5) If the provider has branch locations, the | 4 | | contract
gives the purchaser the opportunity to identify | 5 | | the branch
at which the funeral will be provided.
| 6 | | (3) In an attached Statement of Funeral Goods and | 7 | | Services Selected, it It contains a complete description of | 8 | | the funeral merchandise and
services to be provided and the | 9 | | price of the merchandise and services, and it
clearly | 10 | | discloses whether the price of the merchandise and services | 11 | | is
guaranteed or not guaranteed as to price.
| 12 | | (A) Each guaranteed price contract shall contain | 13 | | the following
statement in 12 point bold type:
| 14 | | THIS CONTRACT GUARANTEES THE BENEFICIARY THE | 15 | | SPECIFIC GOODS AND
SERVICES CONTRACTED FOR. NO | 16 | | ADDITIONAL CHARGES MAY BE REQUIRED.
FOR DESIGNATED | 17 | | GOODS AND SERVICES, ADDITIONAL CHARGES MAY BE INCURRED | 18 | | FOR
UNEXPECTED EXPENSES INCLUDING, BUT NOT LIMITED TO, | 19 | | CASH ADVANCES, SHIPPING OF
REMAINS FROM A DISTANT | 20 | | PLACE, OR DESIGNATED HONORARIA ORDERED OR DIRECTED BY
| 21 | | SURVIVORS.
| 22 | | (B) Except as provided in subparagraph (C) of this | 23 | | paragraph (3),
each non-guaranteed price contract | 24 | | shall contain the following
statement in 12 point bold | 25 | | type:
| 26 | | THIS CONTRACT DOES NOT GUARANTEE THE PRICE THE |
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| 1 | | BENEFICIARY WILL PAY FOR
ANY SPECIFIC GOODS OR | 2 | | SERVICES. ANY FUNDS PAID UNDER THIS CONTRACT ARE ONLY A
| 3 | | DEPOSIT TO BE APPLIED TOWARD THE FINAL PRICE OF THE | 4 | | GOODS OR SERVICES
CONTRACTED FOR. ADDITIONAL CHARGES | 5 | | MAY BE REQUIRED. THE FINAL PRICE SHALL BE DETERMINED AT | 6 | | THE TIME OF DEATH.
| 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 | | (3.5) Each non-guaranteed price contract that is | 13 | | funded by a trust must disclose that (i) the estate of the | 14 | | decedent or responsible party will be legally obligated to | 15 | | pay any shortfall in the trust account and (ii) that the | 16 | | estate would be entitled to receive any excess funds in the | 17 | | trust account after payment of the at-need prices.
| 18 | | (4) It provides that if the particular supplies and | 19 | | services specified
in the pre-need contract are | 20 | | unavailable at the time of delivery, the provider
shall be | 21 | | required to furnish supplies and services similar in style | 22 | | and at
least equal in quality of material and workmanship.
| 23 | | (5) It discloses any penalties or restrictions, | 24 | | including
but not limited
to geographic restrictions or the | 25 | | inability of the provider
to
perform, on the delivery of | 26 | | merchandise, services, or pre-need contract
guarantees.
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| 1 | | (6) Regardless of the method of funding the pre-need | 2 | | contract, the
following must be disclosed:
| 3 | | (A) Whether the pre-need contract is to be funded | 4 | | by a trust, life
insurance, or an annuity;
| 5 | | (B) The nature of the relationship among the person
| 6 | | funding the
pre-need contract, the provider, and the
| 7 | | seller , including any commission or other remuneration | 8 | | paid to the seller or seller's agent ; and
| 9 | | (C) The impact on the pre-need contract of (i) any | 10 | | changes in the
funding arrangement including but not | 11 | | limited to changes in the assignment,
beneficiary | 12 | | designation, or use of the funds; (ii) any specific | 13 | | penalties
to be incurred
by the contract purchaser as a | 14 | | result of failure to make payments; (iii)
penalties to | 15 | | be incurred or moneys or refunds to be received as a | 16 | | result of
cancellations; and (iv) all relevant | 17 | | information concerning what occurs and
whether any | 18 | | entitlements or obligations arise if there is a | 19 | | difference between
the proceeds of the particular | 20 | | funding arrangement and the amount actually
needed to | 21 | | pay for the funeral at-need.
| 22 | | (D) The method of changing the
provider.
| 23 | | (b) All pre-need contracts are subject to the Federal Trade | 24 | | Commission Rule
concerning the Cooling-Off Period for | 25 | | Door-to-Door Sales (16 CFR Part 429).
| 26 | | (c) No pre-need contract shall be sold in this State unless
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| 1 | | there is a provider for the services and personal property | 2 | | being
sold. If the seller is not a provider, then the seller | 3 | | must have a binding agreement with a provider, and
the identity | 4 | | of the provider and the nature of the agreement between the | 5 | | seller
and the provider shall be disclosed in the pre-need | 6 | | contract at the time of the
sale and before the receipt of any | 7 | | sales proceeds. If the pre-need contract requires the | 8 | | performance of funeral services and the seller is not the | 9 | | provider of the funeral services, then the pre-need contract | 10 | | must also be signed by the provider of the funeral services in | 11 | | order to be valid. The failure to disclose the
identity of the | 12 | | provider, the nature of the agreement between the seller and
| 13 | | the provider, or any changes thereto to the purchaser and | 14 | | beneficiary, or the
failure to make the disclosures required in | 15 | | subdivision (a)(1), constitutes an
intentional violation of | 16 | | this Act.
| 17 | | (d) All pre-need contracts must be in writing in at least | 18 | | 11 point type,
numbered, and executed in duplicate. All | 19 | | pre-need contracts must specify the date and location of | 20 | | execution of the contract. A signed
copy of the pre-need | 21 | | contract must be provided to the purchaser at the time of
entry | 22 | | into the pre-need contract. The Comptroller may by rule develop
| 23 | | a model pre-need contract form that meets the requirements of | 24 | | this Act.
| 25 | | (e) The State Comptroller shall by rule develop a booklet | 26 | | for
consumers in plain English describing
the scope, |
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| 1 | | application, and consumer protections of this Act. After the
| 2 | | adoption of these rules, no pre-need contract shall be sold in | 3 | | this State
unless (i) the seller distributes to the purchaser | 4 | | prior to the sale a
booklet promulgated or approved for use by | 5 | | the State Comptroller; (ii) the
seller explains to the | 6 | | purchaser the terms of the pre-need contract prior to
the | 7 | | purchaser signing; and (iii) the purchaser initials a statement | 8 | | in the
contract confirming that the seller has explained the | 9 | | terms of the contract
prior to the purchaser signing.
| 10 | | (f) All sales proceeds received in connection with a | 11 | | pre-need
contract shall be deposited into a trust account as | 12 | | provided in
Section 1b and Section 2 of this Act, or shall be | 13 | | used to purchase a life
insurance policy or tax-deferred | 14 | | annuity as provided in Section 2a
of this Act.
| 15 | | (g) No pre-need contract shall be sold in this State unless | 16 | | it is
accompanied by a funding mechanism permitted under this | 17 | | Act, and unless the
seller is licensed by the Comptroller as | 18 | | provided in Section 3
of this Act.
Nothing in this Act is | 19 | | intended to relieve sellers of pre-need
contracts from
being | 20 | | licensed under any other Act required for their profession or | 21 | | business,
and being subject to the rules promulgated to | 22 | | regulate their profession or
business, including rules on | 23 | | solicitation and advertisement.
| 24 | | (Source: P.A. 96-879, eff. 2-2-10.)
| 25 | | (225 ILCS 45/1a-5 new) |
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| 1 | | Sec. 1a-5. Requirements for pre-need solicitation. | 2 | | (a) All sellers of pre-need funeral goods and services, | 3 | | their employees, agents, and anyone soliciting on their behalf, | 4 | | shall comply with the following requirements when engaged in | 5 | | the solicitation of pre-need funeral consumers: | 6 | | (1) Upon initiating a solicitation by telephone, or | 7 | | upon entering the residence of a solicitation prospect, the | 8 | | solicitor must identify himself or herself, the pre-need | 9 | | seller on whose behalf the solicitation is being made, and | 10 | | a general description of the pre-need goods and services to | 11 | | be offered for sale. | 12 | | (2) When making a pre-need sale solicitation, the | 13 | | solicitor must present to the consumer a copy of the | 14 | | General Price List of the pre-need seller and any other | 15 | | pre-need consumer disclosure information required by law. | 16 | | (3) Pre-need sellers who solicit consumers by | 17 | | telephone are required to
maintain a "do-not-call" list and | 18 | | to place on the list the household
telephone number of any | 19 | | consumer who requests to be put on the list. | 20 | | (b) All sellers of pre-need funeral goods and services, | 21 | | their employees, agents, and anyone soliciting on their behalf, | 22 | | are prohibited from undertaking any of the following practices | 23 | | when engaging in the solicitation of pre-need funeral | 24 | | consumers: | 25 | | (1) The making of any untrue statement of material fact | 26 | | or omission of any
material fact when engaged in pre-need |
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| 1 | | solicitation. | 2 | | (2) The use of any advertisement or offer of pre-need | 3 | | funeral goods or services that is false, misleading, | 4 | | deceptive, unfair, coercive, or intimidating. | 5 | | (3) The solicitation of potential pre-need consumers | 6 | | by telephone any time between the hours of 9:00 p.m. and | 7 | | 8:00 a.m. | 8 | | (4) The use of the term "trust" or "trust-funded" in | 9 | | any pre-need advertisement or solicitation in any | 10 | | misleading way. | 11 | | (5) The direct or indirect solicitation of persons in | 12 | | hospitals, rest homes, nursing homes, or similar health | 13 | | care facilities by telephone or in person without having | 14 | | been expressly requested to do so by that person or the | 15 | | person's representative.
| 16 | | (225 ILCS 45/3) (from Ch. 111 1/2, par. 73.103)
| 17 | | Sec. 3. Licensing.
| 18 | | (a) No person, firm, partnership, association or | 19 | | corporation may act as
seller without first securing from the | 20 | | State Comptroller a
license to
so act. Application for such | 21 | | license shall be in writing, signed by the
applicant and duly | 22 | | verified on forms furnished by the Comptroller. Each
| 23 | | application shall contain at least the following:
| 24 | | (1) The full name and
address (both residence and place | 25 | | of business) of the applicant, and
every member, officer |
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| 1 | | and director thereof if the applicant is a firm,
| 2 | | partnership, association, or corporation, and of every | 3 | | shareholder
holding
more than 10% of the corporate stock if | 4 | | the applicant is a corporation;
| 5 | | (2) A statement of the applicant's
assets and | 6 | | liabilities;
| 7 | | (3) The name and address of the applicant's principal
| 8 | | place of business at which the books, accounts, and
records | 9 | | shall be available for examination by the
Comptroller as | 10 | | required by this Act;
| 11 | | (4) The names and addresses of the applicant's branch
| 12 | | locations at which pre-need sales shall be conducted and
| 13 | | which shall operate under the same license number as the
| 14 | | applicant's principal place of business;
| 15 | | (5) For each individual listed under item (1) above, a
| 16 | | detailed statement of the individual's business
experience | 17 | | for the 10 years immediately preceding the
application; any | 18 | | present or prior connection between the
individual and any | 19 | | other person engaged in pre-need
sales; any felony or | 20 | | misdemeanor convictions for which
fraud was an essential | 21 | | element; any charges or
complaints lodged against the | 22 | | individual for which fraud
was an essential element and | 23 | | which resulted in civil or
criminal litigation; any failure | 24 | | of the individual to
satisfy an enforceable judgment | 25 | | entered against him
based upon fraud; and any other | 26 | | information requested by
the Comptroller relating to past |
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| 1 | | business practices of
the individual. Since the | 2 | | information required by this
item (5) may be confidential | 3 | | or contain proprietary
information, this information shall | 4 | | not be available to
other licensees or the general public | 5 | | and shall be used
only for the lawful purposes of the | 6 | | Comptroller in
enforcing this Act;
| 7 | | (6) The name of the trustee and, if applicable, the
| 8 | | names of the advisors to the trustee, including a copy
of | 9 | | the proposed trust agreement under which the trust
funds | 10 | | are to be held as required by this Act; and
| 11 | | (7) Such other information as the Comptroller may
| 12 | | reasonably require in order to determine the
qualification | 13 | | of the applicant to be licensed under this
Act.
| 14 | | (b) Applications for
license shall be accompanied
by a | 15 | | fidelity bond executed by the applicant and a surety company
| 16 | | authorized to do business in this State or an irrevocable, | 17 | | unconditional
letter of credit issued by a bank, credit union, | 18 | | or trust company authorized to
do business in the State of | 19 | | Illinois, as approved by the State Comptroller, in
such amount | 20 | | not exceeding $10,000 as the Comptroller may require. If, after
| 21 | | notice and an opportunity to be heard, it
has been determined | 22 | | that a licensee has violated this Act within the past 5
| 23 | | calendar years, the Comptroller may require an additional bond | 24 | | or letter of credit
from the licensee from time to time in | 25 | | amounts equal to one-tenth of such trust
funds, which bond or | 26 | | letter of credit shall run to the Comptroller for the use
and |
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| 1 | | benefit of the beneficiaries of such trust funds.
| 2 | | The licensee shall keep accurate accounts, books and | 3 | | records in this State,
at the principal place of business | 4 | | identified in the
licensee's license application or as | 5 | | otherwise approved by
the Comptroller in writing,
of
all | 6 | | transactions, copies of all pre-need contracts, trust | 7 | | agreements, and other
agreements, dates and amounts of payments | 8 | | made and accepted thereon, the names
and addresses of the | 9 | | contracting parties, the persons for whose benefit such
funds | 10 | | are accepted, and the names of the depositaries of such funds. | 11 | | The licensee shall also keep a record of the value and balance | 12 | | of each pre-need funeral trust fund and the value of each | 13 | | insurance policy, as of the most recent transaction, including | 14 | | all annual reports received from trustees and insurance | 15 | | companies.
Each licensee shall maintain the documentation for a | 16 | | period
of 3 years after the licensee has fulfilled his | 17 | | obligations
under the pre-need contract. Additionally, for a | 18 | | period
not to exceed 6 months after the performance of all | 19 | | terms
in a pre-need sales contract, the licensee shall maintain
| 20 | | copies of the contract at the licensee branch location
where | 21 | | the contract was entered or at some other location agreed to by | 22 | | the
Comptroller in writing.
If an
insurance policy or | 23 | | tax-deferred annuity is used to fund the pre-need contract,
the | 24 | | licensee under this Act shall keep and maintain accurate | 25 | | accounts, books,
and records in this State, at the principal | 26 | | place of business identified in
the
licensee's application or |
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| 1 | | as otherwise approved by the
Comptroller in writing,
of all | 2 | | insurance policies and tax-deferred annuities
used to fund the | 3 | | pre-need contract, the name and address of insured, annuitant,
| 4 | | and initial beneficiary, and the name and address of the | 5 | | insurance company
issuing the policy or annuity. If a life | 6 | | insurance policy or tax-deferred
annuity is used to fund a | 7 | | pre-need contract, the licensee shall notify the
insurance | 8 | | company of the name of each pre-need contract purchaser and the
| 9 | | amount of each payment when the pre-need contract, insurance | 10 | | policy or annuity
is purchased.
| 11 | | The licensee shall make reports to the Comptroller annually | 12 | | or at such other
time as the Comptroller may require, on forms | 13 | | furnished by the Comptroller. The
licensee shall file the | 14 | | annual report with the Comptroller within 75 days after
the end | 15 | | of the licensee's fiscal year. The Comptroller shall for good | 16 | | cause
shown grant an extension for the filing of the annual | 17 | | report upon the written
request of the licensee. Such extension | 18 | | shall not exceed 60 days. If a
licensee fails to submit an | 19 | | annual report to the Comptroller within the time
specified in | 20 | | this Section, the Comptroller shall impose upon the licensee a
| 21 | | penalty of $5 for each and every day the licensee remains | 22 | | delinquent in
submitting the annual report. The Comptroller may | 23 | | abate all or part of the
$5 daily penalty for good cause shown. | 24 | | Every application shall be
accompanied by a check
or money | 25 | | order in the amount of $25 and every report shall be | 26 | | accompanied by a
check or money order in the amount of $10 |
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| 1 | | payable to: Comptroller, State of
Illinois.
| 2 | | The licensee shall make all required books and records | 3 | | pertaining to trust
funds, insurance policies, or tax-deferred | 4 | | annuities available to the
Comptroller for examination. The | 5 | | Comptroller, or a person designated by the
Comptroller who is | 6 | | trained to perform such examinations, may at any time
| 7 | | investigate the books, records and accounts of the licensee | 8 | | with respect to
trust funds, insurance policies, or | 9 | | tax-deferred annuities and for that purpose
may require the | 10 | | attendance of and examine under oath all persons whose
| 11 | | testimony he may require. The licensee shall pay a fee for such | 12 | | examination in
accordance with a schedule established by the | 13 | | Comptroller. The fee shall not
exceed the cost of such | 14 | | examination. For pre-need contracts funded by trust
| 15 | | arrangements, the cost of an initial examination shall be borne | 16 | | by the
licensee if it
has $10,000 or more in trust funds, | 17 | | otherwise, by the Comptroller. The charge
made by the | 18 | | Comptroller for an examination shall be based upon the total | 19 | | amount
of trust funds held by the licensee at the end of the | 20 | | calendar or fiscal year
for which the report is required by | 21 | | this Act and shall be in accordance with
the following | 22 | | schedule:
| 23 | | Less than $10,000 .................................no charge;
| 24 | | $10,000 or more but less than $50,000 ...................$10;
| 25 | | $50,000 or more but less than $100,000 ..................$40;
| 26 | | $100,000 or more but less than $250,000 .................$80;
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| 1 | | $250,000 or more ........................................$100.
| 2 | | The Comptroller may order additional audits or | 3 | | examinations as he or she
may deem necessary or advisable to | 4 | | ensure the safety and stability of the trust
funds and to | 5 | | ensure compliance with this Act. These additional audits or
| 6 | | examinations shall only be made after good cause is established | 7 | | by the
Comptroller in the written order. The grounds for | 8 | | ordering these additional
audits or examinations may include, | 9 | | but shall not be limited to:
| 10 | | (1) material and unverified changes or fluctuations in | 11 | | trust balances or
insurance or annuity policy amounts;
| 12 | | (2) the licensee changing trustees more than twice in | 13 | | any 12-month
period;
| 14 | | (3) any withdrawals or attempted withdrawals from the | 15 | | trusts, insurance
policies, or annuity contracts in | 16 | | violation of this Act; or
| 17 | | (4) failure to maintain or produce documentation | 18 | | required by this Act for
deposits into trust accounts, | 19 | | trust investment activities, or life insurance or
annuity | 20 | | policies.
| 21 | | The
licensee shall bear the full cost of that examination | 22 | | or audit, up to a maximum
of $20,000. The
Comptroller may elect | 23 | | to pay for the examination or audit and receive
reimbursement | 24 | | from the licensee. Payment of the costs of the examination or
| 25 | | audit by a licensee shall be a condition of receiving, | 26 | | maintaining, or renewing
a license
under this Act. All moneys |
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| 1 | | received by the Comptroller for examination or
audit fees shall | 2 | | be maintained in a separate account to be known as the
| 3 | | Comptroller's Administrative
Fund. This
Fund, subject to | 4 | | appropriation by the General Assembly, may
be utilized by the | 5 | | Comptroller for
enforcing this Act and other purposes that may | 6 | | be authorized by law.
| 7 | | For pre-need contracts funded by life insurance or a | 8 | | tax-deferred annuity,
the cost of an examination shall be borne | 9 | | by the licensee. The fee
schedule for such examination shall be | 10 | | established in rules promulgated by the
Comptroller. In the | 11 | | event such investigation or other information received by
the | 12 | | Comptroller discloses a substantial violation of the | 13 | | requirements of this
Act, the Comptroller shall revoke the | 14 | | license of such person upon a hearing as
provided in this Act. | 15 | | Such licensee may terminate all further responsibility
for | 16 | | compliance with the requirements of this Act by voluntarily | 17 | | surrendering
the license to the Comptroller, or in the event of | 18 | | its loss, furnishing the
Comptroller with a sworn statement to | 19 | | that effect, which states the licensee's
intention to | 20 | | discontinue acceptance of funds received under pre-need | 21 | | contracts.
Such license or statement must be accompanied by an | 22 | | affidavit that said
licensee has lawfully expended or refunded | 23 | | all funds received under pre-need
contracts, and that the | 24 | | licensee will accept no additional sales proceeds. The
| 25 | | Comptroller shall immediately cancel or revoke said license.
| 26 | | (Source: P.A. 96-879, eff. 2-2-10.)
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| 1 | | Section 10. The Illinois Pre-Need Cemetery Sales Act is | 2 | | amended by changing Section 14 and by adding Section 13.5 as | 3 | | follows: | 4 | | (815 ILCS 390/13.5 new) | 5 | | Sec. 13.5. Requirements for pre-need solicitation. | 6 | | (a) All sellers of pre-need goods and services, their | 7 | | employees, agents, and anyone soliciting on their behalf, shall | 8 | | comply with the following requirements when engaged in the | 9 | | solicitation of pre-need consumers: | 10 | | (1) Upon initiating a solicitation by telephone, or | 11 | | upon entering the residence of a solicitation prospect, the | 12 | | solicitor must identify himself or herself, the pre-need | 13 | | seller on whose behalf the solicitation is being made, and | 14 | | a general description of the pre-need goods and services to | 15 | | be offered for sale. | 16 | | (2) When making a pre-need sale solicitation, the | 17 | | solicitor must present to the consumer a copy of the | 18 | | General Price List of the pre-need seller and any other | 19 | | pre-need consumer disclosure information required by law. | 20 | | (3) Pre-need sellers who solicit consumers by | 21 | | telephone are required to
maintain a "do-not-call" list and | 22 | | to place on the list the household
telephone number of any | 23 | | consumer who requests to be put on the list. | 24 | | (b) All sellers of pre-need goods and services, their |
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| 1 | | employees, agents, and anyone soliciting on their behalf, are | 2 | | prohibited from undertaking any of the following practices when | 3 | | engaging in the solicitation of pre-need consumers: | 4 | | (1) The making of any untrue statement of material fact | 5 | | or omission of any
material fact when engaged in pre-need | 6 | | solicitation. | 7 | | (2) The use of any advertisement or offer of pre-need | 8 | | goods or services that is false, misleading, deceptive, | 9 | | unfair, coercive, or intimidating. | 10 | | (3) The solicitation of potential pre-need consumers | 11 | | by telephone any time between the hours of 9:00 p.m. and | 12 | | 8:00 a.m. | 13 | | (4) The use of the term "trust" or "trust-funded" in | 14 | | any pre-need advertisement or solicitation in any | 15 | | misleading way. | 16 | | (5) The direct or indirect solicitation of persons in | 17 | | hospitals, rest homes, nursing homes, or similar health | 18 | | care facilities by telephone or in-person without having | 19 | | been expressly requested to do so by that person or the | 20 | | person's representative.
| 21 | | (815 ILCS 390/14) (from Ch. 21, par. 214)
| 22 | | Sec. 14. Contract required.
| 23 | | (a) It is unlawful for any person doing business within | 24 | | this
State to accept sales proceeds, either directly or | 25 | | indirectly, by any
means unless the seller enters into a |
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| 1 | | pre-need sales
contract
with the
purchaser which meets the | 2 | | following requirements:
| 3 | | (1) A written sales contract shall be executed in at | 4 | | least 11 point
type in duplicate for
each pre-need sale | 5 | | made by a licensee, and a signed copy given to the
| 6 | | purchaser. Each completed contract shall be numbered and | 7 | | shall contain: (i)
the
name and address of the purchaser, | 8 | | the principal office
of the licensee, and the parent | 9 | | company of the licensee; (ii) the name
of the person,
if | 10 | | known, who
is to receive the cemetery merchandise, cemetery | 11 | | services or the
completed interment, entombment or | 12 | | inurnment spaces under the contract; and
(iii) in an | 13 | | attached Statement of Funeral Goods and Services Selected, | 14 | | specific identification of such
merchandise, services or | 15 | | spaces to be provided, if a specific space or spaces
are | 16 | | contracted for, and
the price of the merchandise, services, | 17 | | or space or spaces.
| 18 | | (2) In addition,
such contracts must contain a | 19 | | provision in distinguishing typeface as follows:
| 20 | | "Notwithstanding anything in this contract to the | 21 | | contrary, you are
afforded certain specific rights of | 22 | | cancellation and refund under the Illinois Pre-Need | 23 | | Cemetery Sales Act, enacted by the 84th
General Assembly of | 24 | | the State of Illinois".
| 25 | | (3) All pre-need sales contracts shall be sold on a | 26 | | guaranteed price
basis.
At the time of performance of the |
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| 1 | | service or delivery of the merchandise,
the seller shall be | 2 | | prohibited from assessing the purchaser or
his heirs or
| 3 | | assigns or duly authorized representative any additional | 4 | | charges for the
specific merchandise and services listed on | 5 | | the pre-need sales contract.
| 6 | | (4) Each contract shall clearly disclose that the price | 7 | | of the
merchandise or services is guaranteed and shall | 8 | | contain the following
statement in 12 point bold type:
| 9 | | "THIS CONTRACT GUARANTEES THE BENEFICIARY THE SPECIFIC | 10 | | GOODS,
SERVICES, INTERMENT SPACES, ENTOMBMENT SPACES, AND | 11 | | INURNMENT SPACES
CONTRACTED FOR. NO ADDITIONAL CHARGES MAY | 12 | | BE REQUIRED FOR
DESIGNATED GOODS, SERVICES, AND SPACES. | 13 | | ADDITIONAL CHARGES MAY
BE INCURRED FOR
UNEXPECTED | 14 | | EXPENSES."
| 15 | | (5) The pre-need sales contract shall provide that
if | 16 | | the particular cemetery services, cemetery
merchandise, or | 17 | | spaces specified in the pre-need
contract are unavailable | 18 | | at the time of delivery, the
seller shall be required to | 19 | | furnish services,
merchandise, and spaces similar in style | 20 | | and at least
equal in quality of material and workmanship.
| 21 | | (6) The pre-need contract shall also disclose any
| 22 | | specific penalties to be incurred by the purchaser as a
| 23 | | result of failure to make payments; and penalties to be
| 24 | | incurred or moneys or refunds to be received as a result
of | 25 | | cancellation of the contract.
| 26 | | (7) The pre-need contract shall disclose the nature
of |
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| 1 | | the relationship between the provider and the seller.
| 2 | | (8) Each pre-need contract that authorizes the | 3 | | delivery
of cemetery merchandise to a licensed and bonded | 4 | | warehouse
shall provide that prior to or upon delivery of | 5 | | the
merchandise to the warehouse
the title to the | 6 | | merchandise and a warehouse receipt shall
be delivered to | 7 | | the purchaser or beneficiary. The pre-need
contract shall | 8 | | contain the following statement in 12 point
bold type:
| 9 | | "THIS CONTRACT AUTHORIZES THE DELIVERY OF MERCHANDISE TO
A | 10 | | LICENSED AND BONDED WAREHOUSE FOR STORAGE OF THE
| 11 | | MERCHANDISE UNTIL THE MERCHANDISE IS NEEDED BY THE
| 12 | | BENEFICIARY. DELIVERY OF THE MERCHANDISE IN THIS MANNER MAY
| 13 | | PRECLUDE REFUND OF SALE PROCEEDS THAT ARE ATTRIBUTABLE TO
| 14 | | THE DELIVERED MERCHANDISE."
| 15 | | The purchaser shall initial the statement at the time | 16 | | of
entry into the pre-need contract.
| 17 | | (9) Each pre-need contract that authorizes the | 18 | | placement
of cemetery merchandise at the site of its
| 19 | | ultimate use prior to the time that the merchandise is | 20 | | needed
by the beneficiary shall contain the following | 21 | | statement in
12 point bold type:
| 22 | | "THIS CONTRACT AUTHORIZES THE PLACEMENT OF MERCHANDISE
AT | 23 | | THE SITE OF ITS ULTIMATE USE PRIOR TO THE TIME THAT THE
| 24 | | MERCHANDISE IS NEEDED BY THE BENEFICIARY. DELIVERY OF THE
| 25 | | MERCHANDISE IN THIS MANNER MAY PRECLUDE REFUND OF SALE
| 26 | | PROCEEDS THAT ARE ATTRIBUTABLE TO THE DELIVERED
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| 1 | | MERCHANDISE."
| 2 | | The purchaser shall initial the statement at the time | 3 | | of
entry into the pre-need contract.
| 4 | | (10) Each pre-need contract that is funded by a trust | 5 | | shall clearly identify the trustee's name and address and | 6 | | the primary state or federal regulator of the trustee as a | 7 | | corporate fiduciary. | 8 | | (b) Every pre-need sales contract must be in writing and | 9 | | must specify the date and location of execution of the | 10 | | contract .
A copy of the signed pre-need contract must be | 11 | | provided to the purchaser at the time of entry into the | 12 | | pre-need contract. The Comptroller may by rule
develop a model | 13 | | pre-need sales contract form that meets the requirements
of | 14 | | this Act.
| 15 | | (c) To the extent the Rule is applicable, every pre-need | 16 | | sales
contract is subject to the Federal Trade Commission Rule | 17 | | concerning the
Cooling-Off Period for Door-to-Door Sales (16 | 18 | | CFR Part 429).
| 19 | | (d) No pre-need sales contract may be entered into in
this | 20 | | State unless there is a provider for the cemetery
merchandise, | 21 | | cemetery services, and undeveloped interment,
inurnment, and | 22 | | entombment spaces being sold. If the seller
is not the | 23 | | provider, then the seller must have a binding
agreement with a | 24 | | provider, and the identity of the provider
and the nature of | 25 | | the agreement between the seller and the
provider must be | 26 | | disclosed in the pre-need sales contract
at the time of sale |
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| 1 | | and before the receipt of any sale
proceeds. If the pre-need | 2 | | contract requires the performance of funeral services and the | 3 | | seller is not the provider of the funeral services, then the | 4 | | pre-need contract must also be signed by the provider of the | 5 | | funeral services in order to be valid. The failure to disclose | 6 | | the identity of the
provider, the nature of the agreement | 7 | | between the seller
and the provider, or any changes thereto to | 8 | | the purchaser
and beneficiary, or the failure to make the | 9 | | disclosures
required by this Section constitutes an | 10 | | intentional
violation of this Act.
| 11 | | (e) No pre-need contract may be entered into in this
State | 12 | | unless it is accompanied by a funding mechanism
permitted under | 13 | | this Act and unless the seller is
licensed by the Comptroller | 14 | | as provided in this Act.
Nothing in this Act is intended to | 15 | | relieve providers or
sellers of pre-need contracts from being | 16 | | licensed under any
other Act required for their profession or | 17 | | business or from
being subject to the rules promulgated to | 18 | | regulate their
profession or business, including rules on | 19 | | solicitation and
advertisement.
| 20 | | (f) No pre-need contract may be entered into in this
State | 21 | | unless the seller explains to the
purchaser the terms of the | 22 | | pre-need contract prior to the
purchaser signing and the | 23 | | purchaser initials a statement in the contract
confirming that | 24 | | the seller has explained the terms of the contract prior to the
| 25 | | purchaser signing.
| 26 | | (g) The State Comptroller shall develop a booklet for
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| 1 | | consumers in plain English describing the scope,
application, | 2 | | and consumer protections of this Act. After
the booklet is | 3 | | developed, no pre-need contract may be
sold in this State | 4 | | unless the seller
distributes to the purchaser prior to the | 5 | | sale a booklet
developed or approved for use by the State | 6 | | Comptroller.
| 7 | | (Source: P.A. 96-879, eff. 2-2-10.)
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