(225 ILCS 45/1) (from Ch. 111 1/2, par. 73.101)
Sec. 1. Payment under pre-need contract. Except as otherwise provided in
this Section, all sales proceeds
paid to any person, partnership, association
or corporation with respect to merchandise or services covered by this Act,
upon any agreement or contract, or any series or combination
of agreements or contracts, which has for a purpose the furnishing or
performance of funeral services, or the furnishing or delivery of any
personal property, merchandise, or services of any nature in connection
with the final disposition of a dead human body, including, but not
limited to, outer burial containers, urns, combination casket-vault units,
caskets and clothing, for future use at a time determinable by the death of the
person or persons whose body or bodies are to be so disposed of, shall be held
to be trust funds, and shall be placed in trust in accordance with Sections 1b
and 2, or shall be used to purchase life insurance or annuities in accordance
with Section 2a. The person, partnership, association or corporation receiving
said payments under a pre-need contract is hereby declared to be a trustee
thereof until deposits of funds are made in accordance with Section 1b or 2a of
this Act.
Nothing in this Act shall be construed to prohibit the inclusion of outer
burial containers in sales contracts under the Illinois Pre-Need Cemetery Sales
Act.
(Source: P.A. 96-879, eff. 2-2-10.)
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(225 ILCS 45/1a) (from Ch. 111 1/2, par. 73.101a)
Sec. 1a.
For the purposes of this Act, the following terms shall have
the meanings specified, unless the context clearly requires another meaning:
"Beneficiary" means the person specified in the pre-need contract upon
whose death funeral services or merchandise shall be provided or delivered.
"Licensee" means a seller of a pre-need contract who has
been licensed by
the Comptroller under this Act.
"Outer burial container" means any container made of concrete,
steel, wood, fiberglass or similar material, used solely at the interment
site, and designed and used exclusively to surround or enclose a separate
casket and to support the earth above such casket, commonly known as a
burial vault, grave box or grave liner, but not including a lawn
crypt as defined in the Illinois Pre-need Cemetery Sales Act.
"Parent company" means a corporation owning more than 12 cemeteries or
funeral homes in more than one state.
"Person" means any person, partnership, association, corporation, or
other entity.
"Pre-need contract" means any agreement or contract, or any series or
combination of agreements or contracts, whether funded by trust deposits or
life insurance policies or annuities, which has for a purpose the furnishing
or performance of funeral services or the furnishing or delivery of any
personal property, merchandise, or services of any nature in connection with
the final disposition of a dead human body. Nothing in this Act is intended to
regulate the content of a life insurance policy or a tax-deferred annuity.
"Provider" means a person who is obligated for furnishing or performing
funeral services or the furnishing or delivery of any personal property,
merchandise, or services of any nature in connection with the final disposition
of a dead human body.
"Purchaser" means the person who originally paid the money under or in
connection with a pre-need contract.
"Sales proceeds" means the entire amount paid to a seller, exclusive
of sales taxes paid by the seller, finance charges paid by the purchaser, and
credit life, accident or disability insurance premiums, upon any agreement or
contract, or series or combination of agreements or contracts, for the purpose
of performing funeral services or furnishing personal property, merchandise, or
services of any nature in connection with the final disposition of a dead human
body, including, but not limited to, the retail price paid for such services
and personal property and merchandise.
"Purchase price" means sales proceeds less finance charges on
retail
installment contracts.
"Seller" means the person who sells or
offers to sell the pre-need contract
to a purchaser, whether funded by a trust agreement, life insurance policy,
or tax-deferred annuity.
"Trustee" means a person authorized to hold funds under this Act.
(Source: P.A. 92-419, eff. 1-1-02.)
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(225 ILCS 45/1a-1)
Sec. 1a-1. Pre-need contracts.
(a) It shall be unlawful for any seller doing business
within
this State to accept sales proceeds from a purchaser, either directly or
indirectly by any means, unless the seller enters into a
pre-need contract
with the purchaser which meets the following requirements:
(1) It states the name and address of the principal | ||
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(1.5) If funded by a trust, it clearly identifies the | ||
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(1.7) If funded by life insurance, it clearly | ||
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(2) It clearly identifies the provider's name and | ||
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(2.5) If the provider has branch locations, the | ||
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(3) It contains a complete description of the funeral | ||
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(A) Each guaranteed price contract shall contain | ||
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THIS CONTRACT GUARANTEES THE BENEFICIARY THE | ||
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(B) Except as provided in subparagraph (C) of | ||
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THIS CONTRACT DOES NOT GUARANTEE THE PRICE THE | ||
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(C) If a non-guaranteed price contract may | ||
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(4) It provides that if the particular supplies and | ||
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(5) It discloses any penalties or restrictions, | ||
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(6) Regardless of the method of funding the pre-need | ||
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(A) Whether the pre-need contract is to be funded | ||
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(B) The nature of the relationship among the | ||
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(C) The impact on the pre-need contract of (i) | ||
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(D) The method of changing the
provider.
(b) All pre-need contracts are subject to the Federal Trade Commission Rule
concerning the Cooling-Off Period for Door-to-Door Sales (16 CFR Part 429).
(c) No pre-need contract shall be sold in this State unless
there is a provider for the services and personal property being
sold. If the seller is not a provider, then the seller must have a binding agreement with a provider, and
the identity of the provider and the nature of the agreement between the seller
and the provider shall be disclosed in the pre-need contract at the time of the
sale and before the receipt of any sales proceeds. The failure to disclose the
identity of the provider, the nature of the agreement between the seller and
the provider, or any changes thereto to the purchaser and beneficiary, or the
failure to make the disclosures required in subdivision (a)(1), constitutes an
intentional violation of this Act.
(d) All pre-need contracts must be in writing in at least 11 point type,
numbered, and executed in duplicate. A signed
copy of the pre-need contract must be provided to the purchaser at the time of
entry into the pre-need contract. The Comptroller may by rule develop
a model pre-need contract form that meets the requirements of this Act.
(e) The State Comptroller shall by rule develop a booklet for
consumers in plain English describing
the scope, application, and consumer protections of this Act. After the
adoption of these rules, no pre-need contract shall be sold in this State
unless (i) the seller distributes to the purchaser prior to the sale a
booklet promulgated or approved for use by the State Comptroller; (ii) the
seller explains to the purchaser the terms of the pre-need contract prior to
the purchaser signing; and (iii) the purchaser initials a statement in the
contract confirming that the seller has explained the terms of the contract
prior to the purchaser signing.
(f) All sales proceeds received in connection with a pre-need
contract shall be deposited into a trust account as provided in
Section 1b and Section 2 of this Act, or shall be used to purchase a life
insurance policy or tax-deferred annuity as provided in Section 2a
of this Act.
(g) No pre-need contract shall be sold in this State unless it is
accompanied by a funding mechanism permitted under this Act, and unless the
seller is licensed by the Comptroller as provided in Section 3
of this Act.
Nothing in this Act is intended to relieve sellers of pre-need
contracts from
being licensed under any other Act required for their profession or business,
and being subject to the rules promulgated to regulate their profession or
business, including rules on solicitation and advertisement.
(Source: P.A. 96-879, eff. 2-2-10.)
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(225 ILCS 45/1a-2) Sec. 1a-2. Pre-Need Funeral Consumer Protection Fund. (a) Each licensee shall pay a fee of $5 out of the funds received for each pre-need contract sold and shall forward this sum to the Comptroller semi-annually within 30 days of the end of June and December. Fees collected under this Section shall be deposited into the Pre-need Funeral Consumer Protection Fund, which is hereby created as a special fund in the State treasury. Moneys in the Fund may be expended for the purposes specified in subsection (b) and to purchase insurance to cover losses guaranteed by the Fund. (b) In the event that the purchaser is unable to receive the benefits of his or her pre-need contract or to receive the funds due by reason of cancellation of the contract, the purchaser may apply to the Comptroller on a form prescribed by the Comptroller for restitution from the Pre-need Funeral Consumer Protection Fund. Upon a finding by the Comptroller that the benefits or return of payment is not available to the purchaser, the Comptroller may cause restitution to be paid to the purchaser from the Pre-need Funeral Consumer Protection Fund. (c) In all such cases where a purchaser is paid restitution from the Fund, the Comptroller shall be subrogated to that purchaser's claims against the licensee for all amounts paid from the Fund. If the licensee's liability for default is subsequently proven, any award made by a court of law shall be made payable to the Pre-need Funeral Consumer Protection Fund up to the amount paid to the purchaser from the Fund and the Comptroller shall request that the Attorney General engage in all reasonable post-judgment collection steps to collect such claims from the judgment debtor and reimburse the Fund. (d) The Fund shall not be applied toward any restitution for losses in any lawsuit initiated by the Attorney General or Comptroller or with respect to any claim made on a pre-need contract that occurred prior to the effective date of this amendatory Act of the 96th General Assembly. (e) Notwithstanding any other provision of this Section, the payment of restitution from the Fund shall be a matter of grace and not of right and no purchaser shall have any vested right in the Fund as a beneficiary or otherwise. (f) The Fund may not be allocated for any purpose other than that specified in this Act.
(Source: P.A. 96-879, eff. 2-2-10.) |
(225 ILCS 45/1b) (from Ch. 111 1/2, par. 73.101b)
Sec. 1b.
(a) Whenever a seller receives sales proceeds under a pre-need
contract that the purchaser elects to fund by a trust agreement, the seller may
retain an initial amount equal to 5% of the purchase price of the services,
personal property or merchandise, or 15% of the purchase price of outer burial
containers. Thereafter, a seller shall deposit into trust the amounts specified
in this Section so that no later than upon the final payment on the contract,
the trust shall equal or exceed 95% of the purchase price of all services,
personal property, or merchandise, except for outer burial containers, and 85%
of the purchase price of outer burial containers.
(b) In the event that sales proceeds to be deposited into a trust are
received pursuant to a cash sale or an installment contract, the seller
may retain the initial percentage authorized by subsection (a) of this Section, and thereafter shall deposit into
the trust the entire balance of sales proceeds received.
(c) In the event that the deposits into a trust required by this Section do
not, after final payment by the consumer, result in the trust containing at
least 95% of the purchase price of all services, personal property or merchandise,
except for outer burial containers and 85% of the purchase price of outer
burial containers, the seller shall make an additional deposit into the trust
in an amount sufficient to meet these percentages.
(d) The trustee may not be the seller or provider of funeral services or
merchandise.
(Source: P.A. 96-879, eff. 2-2-10.)
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(225 ILCS 45/2) (from Ch. 111 1/2, par. 73.102)
Sec. 2.
(a) If a purchaser selects a trust arrangement to fund the
pre-need contract, all trust deposits as determined by Section 1b shall be made
within 30 days of receipt.
(b) A trust established under this Act must be maintained with a corporate fiduciary as defined in Section 1-5.05 of the Corporate Fiduciary Act or with a foreign corporate fiduciary recognized by Article IV of the Corporate Fiduciary Act.
(c) Trust agreements and amendments to the trust agreements used to
fund a pre-need contract shall be filed with the Comptroller.
(d) (Blank).
(e) A seller or provider shall furnish to the trustee and depositary the
name of each payor and the amount of payment on each such account for which
deposit is being so made. Nothing shall prevent the trustee from commingling the
deposits in any such trust fund for purposes of its management and the
investment of its funds as provided in the Common Trust Fund Act. In addition,
multiple trust funds maintained under this Act may be commingled or commingled
with other funeral or burial related trust funds if all record keeping
requirements imposed by law are met.
(f) (Blank).
(g) Upon no less than 30 days prior notice to the Comptroller, the seller may change
the trustee of
the fund. Failure to provide the Comptroller with timely prior notice is an intentional violation of this Act. (h) A trustee shall at least annually furnish to each purchaser a statement containing: (1) the receipts, disbursements, and inventory of the trust, including an explanation of any fees or expenses charged by the trustee under Section 5 of this Act or otherwise, (2) an explanation of the purchaser's right to a refund, if any, under this Act, and (3) identifying the primary regulator of the trust as a corporate fiduciary under state or federal law.
(i) If a trustee has reason to believe that the contact information for a purchaser is no longer valid, then the trustee shall promptly notify the seller. If a trustee has reason to believe that the purchaser is deceased, then the trustee shall promptly notify the seller. A trustee shall report and remit to the State Treasurer any trust funds, including both the principal and any accrued earnings or losses, less any funds allowed to be retained under subsection (c-5) of Section 4, relating to an individual account that is presumed abandoned under the Revised Uniform Unclaimed Property Act.(Source: P.A. 101-552, eff. 1-1-20.)
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(225 ILCS 45/2a)
Sec. 2a. Purchase of insurance or annuity.
(a) If a purchaser selects the purchase of a life insurance policy or
tax-deferred annuity contract to fund the pre-need contract, the application
and collected premium shall be mailed within 30 days of signing the pre-need
contract.
(b) If life insurance or an annuity is used to fund a
pre-need contract,
the seller or provider shall not be named as the owner or beneficiary of the
policy or annuity. No person whose only insurable interest in the insured is
the receipt of proceeds from the policy or in naming who shall receive the
proceeds nor any trust acting on behalf of such person or seller or provider
shall be named as owner or beneficiary of the policy or annuity.
(c) Nothing shall prohibit the purchaser from irrevocably assigning
ownership of the policy or annuity used to fund a guaranteed price pre-need
contract to a person or trust or from irrevocably assigning the benefits of the policy or annuity to a funeral home for the purpose of obtaining favorable
consideration for Medicaid, Supplemental Security Income, or another public
assistance program, as permitted under federal law. The seller or contract
provider may be named a
nominal owner of the life insurance policy only for such
time as it takes to immediately transfer the policy into a
trust. Except for this purpose, neither the
seller nor the contract provider shall be named the owner
or the beneficiary of the policy or annuity.
(d) If a life insurance policy or annuity contract is used to fund a
pre-need contract, except for guaranteed price contracts permitted in Section
4(a) of this Act, the pre-need contract must be revocable, and any
assignment
provision in the pre-need contract must contain the following disclosure in 12
point bold type:
THIS ASSIGNMENT MAY BE REVOKED BY THE ASSIGNOR OR ASSIGNOR'S SUCCESSOR OR, IF
THE ASSIGNOR IS ALSO THE INSURED AND DECEASED, BY THE REPRESENTATIVE OF THE
INSURED'S ESTATE BEFORE THE RENDERING TO THE CEMETERY SERVICES OR GOODS OR
FUNERAL SERVICES OR GOODS. IF THE ASSIGNMENT IS REVOKED, THE DEATH BENEFIT
UNDER THE LIFE INSURANCE POLICY OR ANNUITY CONTRACT SHALL BE PAID IN ACCORDANCE
WITH THE BENEFICIARY DESIGNATION UNDER THE INSURANCE POLICY OR ANNUITY
CONTRACT.
(e) Sales proceeds shall not be used to purchase life insurance policies
or tax-deferred annuities unless the company issuing the life insurance
policies or tax-deferred annuities is licensed with the Illinois Department of
Insurance, and the insurance producer or annuity seller is licensed to do
business in the State of Illinois.
(Source: P.A. 102-959, eff. 5-27-22.)
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(225 ILCS 45/2b) Sec. 2b. Irrevocable designation of beneficiary of existing life insurance. (a) In accordance with Section 245.3 of the Illinois Insurance Code, an insured or any other person who may be the owner of rights under an existing policy of life insurance may make an irrevocable assignment of all or a part of his or her rights under the policy to a provider in consideration for signing a guaranteed pre-need contract for the purpose of obtaining favorable consideration for Medicaid, Supplemental Security Income, or another public assistance program. The form that shall effectuate the irrevocable assignment and thereby provide for the irrevocable designation of beneficiary of one or more life insurance policies, which shall comply with all applicable federal laws and regulations, shall be prepared by the Department of Healthcare and Family Services under paragraph (4) of subsection (c) of Section 3-1.2 of the Illinois Public Aid Code or such form, approved in advance by the Department of Healthcare and Family Services, that has been prepared by an insurance company licensed to operate in the State of Illinois. The insured or any other person who may be the owner of rights under an existing policy of life insurance shall sign a guaranteed pre-need contract with the provider that describes the cost of the funeral goods and services to be provided upon the person's death, up to $7,248, except that any portion of a contract that clearly represents the purchase of burial space, as that term is defined for purposes of the Supplemental Security Income program, is exempt regardless of value. This amount shall be adjusted annually by the Department of Human Services for any increase in the Consumer Price Index. The guaranteed pre-need contract must provide a complete description and cost of the goods and services and any cash advances. More than one policy may be subject to this Section if the total face value of the policies is necessary to pay the amount described in the guaranteed pre-need contract with the provider. All policies shall be listed on the form. The insured or any other person who may be the owner of rights under an existing policy of life insurance shall be given a copy of the executed form. The licensee shall retain copies for inspection by the Comptroller and shall report annually to the Comptroller the following: the name of the insured, the insurance policy number, the amount of the guaranteed pre-need contract, the current value of the policy or benefits designated, and the name of the insurance company issuing the policy. (b) The insured or any other person who may be the owner of rights under an existing policy of life insurance shall acknowledge that by making this assignment irrevocable, the policy cannot be canceled, although it does not affect the right of the policy owner to cancel the insurance policy within the examination period provided under the policy. (c) No commission may be sought or received in connection with any cash advance allowance included in the guaranteed pre-need contract. (d) For guaranteed pre-need contracts with cash advances, the contract shall include a disclosure, in 12 point bold type and located immediately above such cash advance allowance, that states: "No interment, inurnment, or entombment right has been selected or reserved with this allowance; cash advances are merely an allowance toward the then-current costs for the involved items, to be purchased after death. Burial space allowances may only be excluded from resources under Medicaid if a separate contract is executed for such burial space with a cemetery." (e) Upon the death of the insured, the proceeds of the life insurance policies subject to this Section shall be paid to the provider, who shall apply such proceeds in the following order or priority: (1) first, to the provider in an amount equal to the | ||
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(A) the amount of the guaranteed pre-need | ||
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(B) the actual value of the services, goods, and | ||
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(2) second, to the State of Illinois, up to an amount | ||
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(3) third, payment of proceeds to a secondary | ||
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(f) The provider shall receive and disburse these proceeds notwithstanding any other prohibition in law against serving as a trustee. The provider shall promptly deposit these funds into a non-interest bearing checking or share account that has been established to receive proceeds of this type. These proceeds shall not be commingled with any other account of the provider. The account may contain the funds of more than one client. The provider may disburse these funds to itself for goods and services. The provider shall maintain a ledger indicating the amount of proceeds received and the disbursement of those proceeds. A copy of this ledger shall be provided to the Comptroller and the Department of Healthcare and Family Services, and to the estate or heirs of the insured, as applicable, if requested by them. For the purpose of this Section, the providers who receive and disburse these proceeds from life insurance policies shall be funeral homes. (g) Further assignment. The rights and obligations of the provider subject to the irrevocable designation of beneficiary may be assigned to another provider upon the choice of the insured or the approved representative or the power of attorney for property of the insured, or upon the insolvency or bankruptcy of the provider. The assignee provider shall: (i) be bound to the terms of the irrevocable designation of beneficiary and the associated guaranteed pre-need contract; (ii) notify the insurance company or companies of the assignment; (iii) notify the Department of Healthcare and Family Services of the change in provider; and (iv) retain a copy of the assignment for inspection by the Comptroller.
(Source: P.A. 102-959, eff. 5-27-22.) |
(225 ILCS 45/3) (from Ch. 111 1/2, par. 73.103)
Sec. 3. Licensing.
(a) No person, firm, partnership, association or corporation may act as
seller without first securing from the State Comptroller a
license to
so act. Application for such license shall be in writing, signed by the
applicant and duly verified on forms furnished by the Comptroller. Each
application shall contain at least the following:
(1) The full name and address (both residence and | ||
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(2) A statement of the applicant's assets and | ||
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(3) The name and address of the applicant's principal | ||
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(4) The names and addresses of the applicant's branch | ||
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(5) For each individual listed under item (1) above, | ||
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(6) The name of the trustee and, if applicable, the | ||
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(7) Such other information as the Comptroller may | ||
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(b) Applications for
license shall be accompanied
by a fidelity bond executed by the applicant and a surety company
authorized to do business in this State or an irrevocable, unconditional
letter of credit issued by a bank, credit union, or trust company authorized to
do business in the State of Illinois, as approved by the State Comptroller, in
such amount not exceeding $10,000 as the Comptroller may require. If, after
notice and an opportunity to be heard, it
has been determined that a licensee has violated this Act within the past 5
calendar years, the Comptroller may require an additional bond or letter of credit
from the licensee from time to time in amounts equal to one-tenth of such trust
funds, which bond or letter of credit shall run to the Comptroller for the use
and benefit of the beneficiaries of such trust funds.
The licensee shall keep accurate accounts, books and records in this State,
at the principal place of business identified in the
licensee's license application or as otherwise approved by
the Comptroller in writing,
of
all transactions, copies of all pre-need contracts, trust agreements, and other
agreements, dates and amounts of payments made and accepted thereon, the names
and addresses of the contracting parties, the persons for whose benefit such
funds are accepted, and the names of the depositaries of such funds.
Each licensee shall maintain the documentation for a period
of 3 years after the licensee has fulfilled his obligations
under the pre-need contract. Additionally, for a period
not to exceed 6 months after the performance of all terms
in a pre-need sales contract, the licensee shall maintain
copies of the contract at the licensee branch location
where the contract was entered or at some other location agreed to by the
Comptroller in writing.
If an
insurance policy or tax-deferred annuity is used to fund the pre-need contract,
the licensee under this Act shall keep and maintain accurate accounts, books,
and records in this State, at the principal place of business identified in
the
licensee's application or as otherwise approved by the
Comptroller in writing,
of all insurance policies and tax-deferred annuities
used to fund the pre-need contract, the name and address of insured, annuitant,
and initial beneficiary, and the name and address of the insurance company
issuing the policy or annuity. If a life insurance policy or tax-deferred
annuity is used to fund a pre-need contract, the licensee shall notify the
insurance company of the name of each pre-need contract purchaser and the
amount of each payment when the pre-need contract, insurance policy or annuity
is purchased.
The licensee shall make reports to the Comptroller annually or at such other
time as the Comptroller may require, on forms furnished by the Comptroller. The
licensee shall file the annual report with the Comptroller within 75 days after
the end of the licensee's fiscal year. The Comptroller shall for good cause
shown grant an extension for the filing of the annual report upon the written
request of the licensee. Such extension shall not exceed 60 days. If a
licensee fails to submit an annual report to the Comptroller within the time
specified in this Section, the Comptroller shall impose upon the licensee a
penalty of $5 per day for the first 15 days past due, $10 per day for 16 through 30 days past due, $15 per day for 31 through 45 days past due, and $20 per day for the 46th day and every day thereafter the licensee remains delinquent in
submitting the annual report. The Comptroller may abate all or part of the
daily penalty for good cause shown. Every application shall be
accompanied by a check
or money order in the amount of $25 and every report shall be accompanied by a
check or money order in the amount of $10 payable to: Comptroller, State of
Illinois.
The licensee shall make all required books and records pertaining to trust
funds, insurance policies, or tax-deferred annuities available to the
Comptroller for examination. The Comptroller, or a person designated by the
Comptroller who is trained to perform such examinations, may at any time
investigate the books, records and accounts of the licensee with respect to
trust funds, insurance policies, or tax-deferred annuities and for that purpose
may require the attendance of and examine under oath all persons whose
testimony he may require. The licensee shall pay a fee for such examination in
accordance with a schedule established by the Comptroller. The fee shall not
exceed the cost of such examination. For pre-need contracts funded by trust
arrangements, the cost of an initial examination shall be borne by the
licensee if it
has $10,000 or more in trust funds, otherwise, by the Comptroller. The charge
made by the Comptroller for an examination shall be based upon the total amount
of trust funds held by the licensee at the end of the calendar or fiscal year
for which the report is required by this Act and shall be in accordance with
the following schedule:
Less than $10,000no charge;$10,000 or more but less than $50,000$10;$50,000 or more but less than $100,000$40;$100,000 or more but less than $250,000$80;$250,000 or more$100.
The Comptroller may order additional audits or examinations as he or she
may deem necessary or advisable to ensure the safety and stability of the trust
funds and to ensure compliance with this Act. These additional audits or
examinations shall only be made after good cause is established by the
Comptroller in the written order. The grounds for ordering these additional
audits or examinations may include, but shall not be limited to:
(1) material and unverified changes or fluctuations | ||
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(2) the licensee changing trustees more than twice in | ||
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(3) any withdrawals or attempted withdrawals from the | ||
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(4) failure to maintain or produce documentation | ||
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The
licensee shall bear the full cost of that examination or audit, up to a maximum
of $20,000. The
Comptroller may elect to pay for the examination or audit and receive
reimbursement from the licensee. Payment of the costs of the examination or
audit by a licensee shall be a condition of receiving, maintaining, or renewing
a license
under this Act. All moneys received by the Comptroller for examination or
audit fees shall be maintained in a separate account to be known as the
Comptroller's Administrative
Fund. This
Fund, subject to appropriation by the General Assembly, may
be utilized by the Comptroller for
enforcing this Act and other purposes that may be authorized by law.
For pre-need contracts funded by life insurance or a tax-deferred annuity,
the cost of an examination shall be borne by the licensee. The fee
schedule for such examination shall be established in rules promulgated by the
Comptroller. In the event such investigation or other information received by
the Comptroller discloses a substantial violation of the requirements of this
Act, the Comptroller shall revoke the license of such person upon a hearing as
provided in this Act. Such licensee may terminate all further responsibility
for compliance with the requirements of this Act by voluntarily surrendering
the license to the Comptroller, or in the event of its loss, furnishing the
Comptroller with a sworn statement to that effect, which states the licensee's
intention to discontinue acceptance of funds received under pre-need contracts.
Such license or statement must be accompanied by an affidavit that said
licensee has lawfully expended or refunded all funds received under pre-need
contracts, and that the licensee will accept no additional sales proceeds. The
Comptroller shall immediately cancel or revoke said license.
(Source: P.A. 96-879, eff. 2-2-10; 97-593, eff. 8-26-11.)
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(225 ILCS 45/3a) (from Ch. 111 1/2, par. 73.103a)
Sec. 3a. Denial, suspension, or revocation of license.
(a) The Comptroller may refuse to issue or may suspend
or revoke a license on any of the following grounds:
(1) The applicant or licensee has made any | ||
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(2) The applicant or licensee is insolvent.
(3) The applicant or licensee has been engaged in | ||
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(4) The applicant or licensee has refused to give | ||
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(5) The applicant or licensee has failed to satisfy | ||
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(6) The applicant or licensee has conducted or is | ||
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(7) The trust agreement is not in compliance with | ||
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(8) The fidelity bond is not satisfactory to the | ||
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(9) As to any individual required to be listed in the | ||
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(10) The applicant or licensee, including any member, | ||
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(11) The Comptroller finds any fact or condition | ||
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(12) If an applicant or licensee engages in a | ||
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(b) Before refusal to issue or renew and before suspension or
revocation of a
license, the Comptroller shall hold a hearing to determine whether the
applicant or licensee, hereinafter referred to as the respondent, is entitled
to hold such a license. At least 10 days prior to the date set for such
hearing, the Comptroller shall notify the respondent in writing that on the
date designated a hearing will be held to determine his eligibility for a
license and that he may appear in person or by counsel. Such written
notice may be served on the respondent personally, or by registered or
certified mail sent to the respondent's business address as shown in his
latest notification to the Comptroller. At the hearing, both the
respondent and the complainant shall be accorded ample opportunity to
present in person or by counsel such statements, testimony, evidence and
argument as may be pertinent to the charges or to any defense thereto. The
Comptroller may reasonably continue such hearing from time to time.
The Comptroller may subpoena any person or persons in this State and take
testimony orally, by deposition or by exhibit, in the same manner and with
the same fees and mileage allowances as prescribed in judicial proceedings
in civil cases.
Any authorized agent of the Comptroller may administer oaths to witnesses
at any hearing which the Comptroller is authorized to conduct.
(Source: P.A. 98-613, eff. 12-27-13.)
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(225 ILCS 45/3a-5)
Sec. 3a-5. License requirements.
(a) Every license issued by the Comptroller shall state
the number of the license, the business name and address of
the licensee's principal place of business, each branch
location also operating under the license, and the
licensee's parent company, if any. The license shall be
conspicuously posted in each place of business operating
under the license. The Comptroller may issue such
additional licenses as may be necessary for licensee branch
locations upon compliance with the provisions of this Act
governing an original issuance of a license for each new
license.
(b) Individual salespersons representing a licensee
shall not be required to obtain licenses in their
individual capacities, but must acknowledge, by affidavit,
that they have been provided with a copy of and have read
this Act. The licensee shall retain copies of the affidavits
of its sellers for its records and shall make the affidavits
available to the Comptroller for examination upon request.
(c) The licensee shall be responsible for the activities
of any person representing the licensee in selling or
offering a pre-need contract for sale.
(d) Any person not selling on behalf of a licensee shall
obtain its own license.
(e) No license shall be transferable or assignable
without the express written consent of the Comptroller. A
transfer of more than 50% of the ownership of any business
licensed hereunder shall be deemed to be an attempted
assignment of the license originally issued to the licensee
for which consent of the Comptroller shall be required.
(f) Every license issued hereunder shall be renewed every 5 years for a renewal fee of $100. The renewal fee shall be deposited into the Comptroller's Administrative Fund. The Comptroller, upon the request
of an interested person or on his own motion, may issue new
licenses to a licensee whose license or licenses have been
revoked, if no factor or condition then exists which would
have warranted the Comptroller to originally refuse the
issuance of such license.
(Source: P.A. 97-593, eff. 8-26-11.)
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(225 ILCS 45/3b) (from Ch. 111 1/2, par. 73.103b)
Sec. 3b.
The Comptroller, at his expense, shall provide a certified
shorthand reporter to take down the testimony and preserve a record of all
proceedings at the hearing of any case involving the refusal to issue or
renew a license, the suspension or revocation of a license, the imposition
of a monetary penalty, or the referral of a case for criminal prosecution.
The record of any such proceeding shall consist of the notice of hearing,
complaint, all other documents in the nature of pleadings and written
motions filed in the proceedings, the transcript of testimony and the
report and orders of the Comptroller. Copies of the transcript of such
record may be purchased from the certified shorthand reporter who prepared
the record.
(Source: P.A. 84-839.)
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(225 ILCS 45/3c) (from Ch. 111 1/2, par. 73.103c)
Sec. 3c.
Any circuit court may, upon application of the Comptroller or
of the applicant or licensee against whom proceedings under Section 3a are
pending, enter an order requiring witnesses to attend and testify, and
requiring the production of documents, papers, files, books and records in
connection with any hearing in any proceedings under that Section. Failure
to obey such court order may result in the institution of contempt proceedings.
(Source: P.A. 84-839.)
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(225 ILCS 45/3d) (from Ch. 111 1/2, par. 73.103d)
Sec. 3d.
Any person affected by a final administrative decision of the
Comptroller may have such decision reviewed judicially by the circuit court
of the county where such person resides, or in the case of a corporation,
where the registered office is located. If the plaintiff in the review
proceeding is not a resident of this State, venue shall be in Sangamon
County. The provisions of the Administrative Review Law, as now or
hereafter amended, and any rules adopted thereunder shall govern all
proceedings for the judicial review of final administrative decisions of the
Comptroller. The term "administrative decision" is defined as in the
Administrative Review Law.
The Comptroller is not required to certify the record of the proceeding
unless the plaintiff in the review proceedings has purchased a copy of the
transcript from the certified shorthand reporter who prepared the record.
Exhibits shall be certified without cost.
(Source: P.A. 84-839.)
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(225 ILCS 45/3e) (from Ch. 111 1/2, par. 73.103e)
Sec. 3e.
Upon the revocation of, suspension of, or refusal to renew any
license, the
licensee shall immediately surrender the license or licenses to the
Comptroller. If the licensee fails to do so, the
Comptroller shall have the right to seize the same.
(Source: P.A. 92-419, eff. 1-1-02.)
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(225 ILCS 45/3f)
Sec. 3f.
Revocation of license.
(a) The Comptroller, upon determination that grounds
exist for the revocation or suspension of a license issued
under this Act, may revoke or suspend, if appropriate, the license issued to
a licensee or to a particular branch office location with respect to which
the grounds for revocation or suspension may occur or exist.
(b) Whenever a license is revoked by the
Comptroller, he or she shall apply to the Circuit Court of the county wherein
the licensee is located for a receiver to administer the trust funds of the
licensee or to maintain the life insurance policies and tax-deferred annuities
held by the licensee under a pre-need contract.
(Source: P.A. 92-419, eff. 1-1-02.)
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(225 ILCS 45/4) (from Ch. 111 1/2, par. 73.104)
Sec. 4. Withdrawal of funds; revocability of contract.
(a) Except as otherwise provided in this Act, monies in a trust established under Section 2 shall not be withdrawn until after the death of the beneficiary, unless sooner withdrawn and refunded to the purchaser as provided in this Section. The life insurance
policies or tax-deferred annuities shall not be surrendered until the death of
the beneficiary, unless sooner surrendered and repaid to the owner of the policy
purchased under or in connection with the pre-need contract or to his or her
legal representative. If, however, the agreement or series of agreements
provides for forfeiture and retention of any or all payments as and for
liquidated damages as provided in Section 6, then the trustee may withdraw
the deposits. In addition, nothing in this Section (i) prohibits the
change of depositary by the trustee and the transfer of trust funds
from one depositary to another or (ii) prohibits a contract purchaser who is or
may become eligible for public assistance under any applicable federal or
State law or local ordinance including, but not limited to, eligibility
under 24 C.F.R., Part 913 relating to family insurance under federal
Housing and Urban Development Policy from irrevocably waiving, in writing,
and renouncing the right to cancel a pre-need contract for funeral services
in an amount prescribed by rule of the
Department of Healthcare and Family Services.
No guaranteed price pre-need funeral contract may prohibit a purchaser
from making a contract irrevocable to the extent that federal law or
regulations require that such a contract be irrevocable for purposes of the
purchaser's eligibility for Supplemental Security Income benefits, Medicaid, or
another public assistance program, as permitted under federal law.
(b) If for any reason a seller or provider who has engaged in pre-need
sales has refused, cannot, or does not comply with the terms of the
pre-need contract within a reasonable time after he or she is required to
do so, the purchaser or his or her heirs or assigns or duly authorized
representative shall have the right to a refund of an amount equal
to the sales price paid for undelivered merchandise or
services
plus any amounts held in trust
attributable to the contract, within 30 days of the filing of a
sworn affidavit with the trustee setting forth the existence of the
contract and the fact of breach. A copy of this affidavit shall be
filed with the Comptroller and the seller. In the event a
seller
is prevented from performing by strike, shortage of materials,
civil disorder, natural disaster, or any like occurrence beyond the
control of the seller or provider, the seller or provider's time for
performance shall be extended by the length of the delay. Nothing in this
Section shall relieve the seller or provider from any liability for
non-performance of his or her obligations under the pre-need contract.
(c) After final payment on a pre-need contract, any
purchaser
may, prior to the death of the beneficiary and upon written demand to a seller,
demand that the
pre-need contract with the seller be terminated. The
seller shall, within 30
days, initiate a refund to the purchaser
of the entire amount held in trust attributable to
undelivered merchandise and unperformed services plus any amounts held in trust attributable to the contract
or
the cash surrender value of a life insurance policy
or tax-deferred annuity.
(c-5) If, after the death of the beneficiary, no funeral merchandise or services are provided or if the
funeral
is
conducted by another provider, the seller may keep no more than 10% of the
payments made under the pre-need contract or $300, whichever sum is less. The
remainder of the trust funds or insurance or annuity proceeds shall be
forwarded to the legal heirs of the deceased beneficiary or as determined by probate
action.
(d) The placement and retention of all or a portion of a casket,
combination
casket-vault, urn, or outer burial container comprised of materials which are
designed to withstand prolonged storage in the manner set forth in this
paragraph without adversely affecting the structural integrity or aesthetic
characteristics of such merchandise in a specific burial space in which the
person or persons for whose funeral or burial the merchandise was intended
has a right of interment, or the placement of the merchandise in a specific
mausoleum crypt or lawn crypt in which such person has a right of entombment,
or the placement of the merchandise in a specific niche in which such person
has a right of inurnment, or delivery to such person and retention by such
person until the time of need shall constitute actual delivery to the person
who originally paid the money under or in connection with said agreement or
series of agreements. Actual delivery shall eliminate, from and after the date
of actual delivery, any requirement under this Act to place or retain in trust
any funds received for the sale of such merchandise. The delivery, prior to
the time of need, of any funeral or burial merchandise in any manner other than
authorized by this Section shall not constitute actual delivery and shall not
eliminate any requirement under this Act to place or retain in trust any funds
received for the sale of such merchandise.
(Source: P.A. 95-331, eff. 8-21-07; 96-879, eff. 2-2-10.)
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(225 ILCS 45/4a)
Sec. 4a. Investment of funds.
(a) A trustee has a duty to invest and manage the trust assets pursuant to the Illinois Prudent Investor Law under Article 9 of the Illinois Trust Code.
(b) The trust shall be a single-purpose trust fund. In the event of the
seller's bankruptcy, insolvency or assignment for the benefit of creditors, or
an adverse judgment, the trust funds shall not be available to any creditor as
assets of the seller or to pay any expenses of any bankruptcy or similar
proceeding, but shall be distributed to the purchasers or managed for their
benefit by the trustee holding the funds. Except in an action by the
Comptroller to revoke a license issued pursuant
to this Act and for creation of a receivership as provided in this Act, the
trust shall not be subject to judgment, execution, garnishment, attachment,
or other seizure by process in bankruptcy or otherwise, nor to sale, pledge,
mortgage, or other alienation, and shall not be assignable except as
approved by the Comptroller. The changes made by Public Act 91-7 are intended to clarify existing law regarding the
inability of licensees to pledge the trust.
(c) Because it is not known at the time of deposit or at the time that
income is earned on the trust account to whom the principal and the accumulated
earnings will be distributed for the purpose of determining the Illinois income
tax due on these trust funds, the principal and any accrued earnings or losses
related to each individual account shall be held in suspense until the final
determination is made as to whom the account shall be paid. The beneficiary's
estate shall not be responsible for any funeral and burial purchases listed in
a pre-need contract if the pre-need contract is entered into on a guaranteed
price basis.
If a pre-need contract is not a guaranteed price contract, then to the extent
the proceeds of a non-guaranteed price pre-need contract cover the funeral and
burial expenses for the beneficiary, no claim may be made against the estate of
the beneficiary. A claim may be made against the beneficiary's estate if the
charges for the funeral services and merchandise at the time of use exceed the
amount of the amount in trust plus the percentage of the sale proceeds
initially retained by the seller or the face value of the life insurance policy
or tax-deferred annuity.
(Source: P.A. 101-48, eff. 1-1-20.)
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(225 ILCS 45/4b)
Sec. 4b.
Licensee bankruptcy.
In the event of a licensee's
bankruptcy, insolvency, or assignment for the benefit of creditors, or
in the event of the bankruptcy, insolvency, or assignment for the
benefit of creditors of any person, partnership, association,
corporation, or other entity that possesses a controlling interest in a
licensee, the licensee shall provide notice in writing of that event to
each purchaser of a pre-need sales contract or a pre-need contract
within 30 days after the event of bankruptcy, insolvency, or assignment
for the benefit of creditors. At a minimum, the notice must contain the
following:
(1) The name and address of the licensee.
(2) If different from the licensee, the name and | ||
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(3) A brief description of the event of bankruptcy, | ||
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(4) The case name or other identifying title of any | ||
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(5) The name and address of the court in which the | ||
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(6) A description of any action the purchaser must | ||
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(Source: P.A. 91-7, eff. 6-1-99.)
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(225 ILCS 45/5) (from Ch. 111 1/2, par. 73.105)
Sec. 5.
This Act shall not be construed to prohibit the trustee and
trustee's depositary from being reimbursed and receiving from such funds
their reasonable compensation and expenses in the custody and
administration of such funds pursuant to the Illinois Trust Code.
(Source: P.A. 101-48, eff. 1-1-20.)
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(225 ILCS 45/6) (from Ch. 111 1/2, par. 73.106)
Sec. 6.
It is unlawful for any such agreement or agreements to provide
for forfeiture and retention of payments upon any such agreement or series
of agreements as and for liquidated damages therein in excess of 25% of the
payments made or $300.00, whichever sum is less.
(Source: P.A. 85-805.)
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(225 ILCS 45/7) (from Ch. 111 1/2, par. 73.107)
Sec. 7.
The invalidity of any section or part or portion of this Act shall
not affect the validity of the remaining sections or part thereof.
(Source: Laws 1955, p. 2020.)
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(225 ILCS 45/7.1)
Sec. 7.1.
Effect of Public Act 88-477.
Public Act 88-477 shall not be
construed to invalidate any contract or agreement entered into under this Act
or any other statute or law before January 1, 1994 if, when the contract or
agreement was entered into, it was not invalid under this Act or any other
statute or law.
(Source: P.A. 88-659.)
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(225 ILCS 45/7.2)
Sec. 7.2.
Investigation of unlawful practices.
If it appears to the
Comptroller that a person has engaged in, is engaging in, or is about to engage
in any practice in violation of this Act,
the Comptroller may:
(1) require that person to file on such terms as the | ||
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(2) examine under oath any person in connection with | ||
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(3) examine any books and records of the licensee, | ||
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(4) require the production of a copy of any record, | ||
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(Source: P.A. 92-419, eff. 1-1-02.)
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(225 ILCS 45/7.3)
Sec. 7.3.
Service.
Service by the Comptroller of any notice requiring a
person to file a statement or report shall be made:
(1) personally by delivery of a duly executed copy | ||
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(2) by mailing by certified mail a duly executed copy | ||
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(Source: P.A. 89-615, eff. 8-9-96.)
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(225 ILCS 45/8) (from Ch. 111 1/2, par. 73.108)
Sec. 8.
Any person who intentionally fails to deposit the required sales
proceeds into a trust required under this Act, intentionally and improperly
withdraws or uses trust funds for his or her own benefit, or otherwise
intentionally violates any provision of this Act
is guilty of a Class 4 felony.
If any person intentionally violates this Act or fails or refuses to comply
with any order of the Comptroller or any part of an order that has become final
to the person and is still in effect, the Comptroller may, after notice and
hearing at which it is determined that a violation of this Act or the order has
been committed, further order that the person shall forfeit and pay to the
State of Illinois a sum not to exceed $5,000 for each
violation. This
liability shall be enforced in an action brought in any court of competent
jurisdiction by the Comptroller in the name of the People of the State of
Illinois.
In addition to the other penalties and remedies provided in this Act, the
Comptroller may bring a civil action in the county of residence of the
licensee
or any person accepting trust funds to enjoin any violation or threatened
violation of this Act.
The powers vested in the Comptroller by this Section are in addition to any
and all other powers and remedies vested in the Comptroller by law.
(Source: P.A. 92-419, eff. 1-1-02.)
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(225 ILCS 45/8.1)
Sec. 8.1. Sales; liability of purchaser for shortage. In the event of a sale or transfer of all or
substantially all of the assets of the licensee, the sale
or transfer of the controlling interest of the corporate
stock of the licensee if the licensee is a corporation, the
sale or transfer of the controlling interest of the partnership if
the licensee is a partnership, or the sale of the licensee
pursuant to foreclosure proceedings, the purchaser is
liable for any shortages existing before or after the sale
in the trust funds required to be maintained in a trust
pursuant to this Act and shall honor all pre-need contracts
and trusts entered into by the licensee. Any shortages
existing in the trust funds constitute a prior lien in
favor of the trust for the total value of the shortages,
and notice of that lien shall be provided in all sales
instruments.
In the event of a sale or transfer of all or
substantially all of the assets of the licensee, the sale
or transfer of the controlling interest of the corporate
stock of the licensee if the licensee is a corporation, or
the sale or transfer of the controlling interest of the partnership
if the licensee is a partnership, the licensee shall, at
least 21 days prior to the sale or transfer, notify the
Comptroller, in writing, of the pending date of sale or
transfer so as to permit the Comptroller to audit the books
and records of the licensee. The audit must be commenced
within 10 business days of the receipt of the notification
and completed within the 21-day notification period unless
the Comptroller notifies the licensee during that period
that there is a basis for determining a deficiency which
will require additional time to finalize. Failure to provide timely notice to the Comptroller under this Section shall be an intentional violation of this Act. The sale or
transfer may not be completed by the licensee unless and
until:
(i) the Comptroller has completed the audit of the | ||
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(ii) any delinquency existing in the trust funds has | ||
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(iii) the Comptroller issues a license upon | ||
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For purposes of this Section, a person, firm,
corporation, partnership, or institution that acquires the
licensee through a real estate foreclosure shall be subject
to the provisions of this Section.
(Source: P.A. 96-879, eff. 2-2-10.)
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(225 ILCS 45/9) (from Ch. 111 1/2, par. 73.109)
Sec. 9.
This Act shall be known and may be cited as the "Illinois Funeral
or Burial Funds Act".
(Source: P.A. 83-464.)
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(225 ILCS 45/10) (from Ch. 111 1/2, par. 73.110)
Sec. 10.
Nothing in this Act shall be deemed to apply to pre-need
cemetery sales under the "Illinois Pre-Need Cemetery Sales Act", enacted by
the 84th General Assembly.
(Source: P.A. 85-293.)
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