Amendment ASA1-AB868

AB868-ASA1,8,10 445.125 (3m) Burial agreements funded with proceeds of life insurance policies. (a) In this subsection:

AB868-ASA1,8,12 1. "Agent" means an authorized representative of a funeral director or operator of a funeral establishment.

AB868-ASA1,8,16 2. "Burial agreement" means a written agreement between an operator of a funeral establishment or funeral director and a person in which the operator of the funeral establishment or funeral director agrees to provide to a person, after that person is deceased, funeral merchandise or funeral services.

AB868-ASA1,8,24 3. "Cash advance item" means personal property or a service that is obtained by a funeral director or operator of a funeral establishment from a 3rd party and that is paid for by the funeral director or operator of the funeral establishment on behalf of, and subject to reimbursement from, a person purchasing funeral merchandise or funeral services from the funeral director or operator of the funeral establishment. "Cash advance item" includes cemetery or crematory services, pallbearers, public transportation, clergy honoraria, flowers, musicians or vocalists, nurses, obituary notices, gratuities and death certificates.

AB868-ASA1,9,9 4. "Funeral merchandise or funeral services" means personal property or services typically sold or provided in connection with the final disposition of human remains, including caskets or other primary containers not preplaced into the burial excavation of a grave, rental, temporary or disposable caskets or containers, outer burial containers not preplaced into the burial excavation of a grave, transportation containers, funeral clothing and accessories, embalming services and funeral directing services. "Funeral merchandise or funeral services" does not include a cash advance item or opening and closing costs that are associated with the burial of a deceased person.

AB868-ASA1,9,13 (b) 1. A licensed funeral director, an operator of a funeral establishment, an agent of a licensed funeral director or, subject to par. (c), an agent of an operator of a funeral establishment may sell or solicit the sale of a burial agreement that is funded with the proceeds of a life insurance policy if all of the following apply:

AB868-ASA1,9,15 a. The burial agreement meets the requirements specified in pars. (d) to (f) and in the rules promulgated by the examining board under par. (j) 1. b.

AB868-ASA1,9,17 b. The licensed funeral director, operator of the funeral establishment or agent is licensed as an insurance intermediary under ch. 628.

AB868-ASA1,9,22 2. a. A licensed funeral director or operator of a funeral establishment may authorize an agent who is an insurance intermediary licensed under ch. 628, and who meets the training requirements established by the examining board under par. (j) 1. a., to sell or solicit the sale of a burial agreement that is funded with the proceeds of a life insurance policy and that meets the requirements specified in pars. (d) to (f).

AB868-ASA1,9,25 b. A licensed funeral director or operator of a funeral establishment shall report to the examining board the identity of any agent authorized by the licensed funeral director or operator of the funeral establishment under subd. 2. a. and provide evidence satisfactory to the examining board that such agent meets the training requirements established by the examining board by rule under par. (j) 1. a. The examining board shall promulgate rules establishing requirements and procedures for making reports and providing the evidence required under this subd. 2. b.

AB868-ASA1,10,16 c. A licensed funeral director or operator of a funeral establishment is responsible for and bound by any act of an agent, authorized by the licensed funeral director or operator of the funeral establishment under subd. 2. a., that is within the scope of the agent's apparent authority, while a contract under par. (c) 1. between the agent and the licensed funeral director or operator of the funeral establishment remains in force, and after that time until the licensed funeral director or operator of the funeral establishment has made reasonable efforts to recover from the agent any forms for burial agreements provided to the agent by the licensed funeral director or operator of the funeral establishment and other indicia of agency. Reasonable efforts shall include a formal demand in writing for return of the indicia, and notice to the examining board if the agent does not comply with the demand promptly.

AB868-ASA1,10,22 (c) 1. No agent of an operator of a funeral establishment may solicit the sale of or sell a burial agreement funded with the proceeds of a life insurance policy unless he or she has a contract with the operator of the funeral establishment that authorizes him or her to act as the agent of the operator of the funeral establishment and that satisfies the requirements established by the examining board by rule under par. (j) 1. c.

AB868-ASA1,10,25 2. If an agent of an operator of a funeral establishment solicits the sale of or sells a burial agreement funded with the proceeds of a life insurance policy, the agent shall do all of the following at the time of solicitation:

AB868-ASA1,11,2 a. Disclose to the prospective purchaser of the burial agreement the identity of the funeral establishment of which he or she is an agent.

AB868-ASA1,11,6 b. Furnish to the applicant a copy of the booklet prepared and distributed by the examining board under par. (j) 3. that describes the differences between funding a burial agreement with the proceeds of a life insurance policy under this subsection and entering into a burial agreement funded by a trust under sub. (1).

AB868-ASA1,11,10 (d) A burial agreement that is funded with the proceeds of a life insurance policy shall specify in the agreement the funeral establishment that will be used to provide the funeral services or funeral merchandise to be provided under the agreement.

AB868-ASA1,11,14 (e) 1. A burial agreement that is funded with the proceeds from a life insurance policy shall include a provision setting forth the nature and extent of any price guarantee for the funeral merchandise or funeral services that are to be provided under the burial agreement.

AB868-ASA1,11,19 2. If an agent solicits and sells a burial agreement that is funded with the proceeds of a life insurance policy, the licensed funeral director who owns the funeral establishment or is an agent of the operator of the funeral establishment that will provide funeral merchandise or funeral services under the burial agreement shall ratify the burial agreement in writing and with his or her signature.

AB868-ASA1,11,25 (f) The price of any funeral merchandise or funeral services provided under a burial agreement funded with the proceeds of a life insurance policy may not exceed the price for the merchandise or services that, at the time that the merchandise is provided or the services are performed, is set forth in the funeral establishment's general price list required under the funeral industry practices regulations of the federal trade commission.

AB868-ASA1,12,6 (g) Before an agent, a licensed funeral director or an operator of a funeral establishment accepts an applicant's initial premium for a burial agreement that is funded or will be funded by a life insurance policy, the agent, funeral director or operator of a funeral establishment shall comply with the requirements under par. (h) and shall, in a writing that is clear and conspicuous, disclose the following information to the applicant:

AB868-ASA1,12,8 1. The fact that a life insurance policy is involved in or connected to, or is being used to fund, the burial agreement.

AB868-ASA1,12,9 2. The type of insurance instrument that is funding the burial agreement.

AB868-ASA1,12,10 3. The effect on the burial agreement of all of the following:

AB868-ASA1,12,13 a. Changing the life insurance policy, including changing the assignment of the policy proceeds, changing the beneficiary designation or changing the use of the proceeds.

AB868-ASA1,12,15 b. Any penalties incurred by the policyholder as a result of failing to make premium payments.

AB868-ASA1,12,17 c. Any penalties incurred or money received as a result of cancellation or surrender of the life insurance policy.

AB868-ASA1,12,20 4. The nature of the relationship between the insurance intermediary who solicited or is selling the life insurance policy and the funeral establishment that will be providing funeral or burial merchandise or services under the burial agreement.

AB868-ASA1,12,23 5. The relationship of the life insurance policy to the funding of the burial agreement and the existence and terms of any guarantees, other than a guarantee specified in subd. 6., relating to the burial agreement.

AB868-ASA1,13,7 6. A list of the funeral merchandise and funeral services that are applied for or contracted for under the burial agreement and all relevant information concerning the price of the funeral services provided under the burial agreement, including a statement as to whether the purchase price of the funeral merchandise or funeral services provided under the burial agreement is guaranteed at the time of the purchase of the burial agreement or whether the purchase price of the funeral merchandise or funeral services provided under the burial agreement is to be determined at the time of need, and a statement that the price of the funeral merchandise or funeral services is subject to the limit specified in par. (f).

AB868-ASA1,13,11 7. All relevant information concerning what occurs, and whether any entitlements or obligations arise, if there is a difference between the proceeds of the life insurance policy and the amount of money actually needed to fund the burial agreement.

AB868-ASA1,13,15 8. Any restrictions, including geographic restrictions, or penalties relating to delivery or performance under the burial agreement, including any restrictions or penalties relating to the inability of the operator of the funeral establishment to perform.

AB868-ASA1,13,18 9. A statement as to whether a sales commission or other form of compensation is being paid to the agent who sold or solicited the sale of a burial agreement and, if so, the identity of the persons to whom the commission or other compensation is paid.

AB868-ASA1,13,24 (h) If an applicant under par. (g) is terminating a trust established under sub. (1), the agent, licensed funeral director or operator of the funeral establishment shall, before accepting the applicant's initial premium, furnish written notice to the examining board that satisfies requirements established by the examining board by rule under par. (j) 1. d., and may not accept the applicant's initial premium until 30 days after providing written notice under this paragraph.

AB868-ASA1,14,5 (hm) An agent authorized by a licensed funeral director or operator of a funeral establishment under par. (b) 2. a. may not engage in unfair or deceptive acts or practices specified in the funeral industry practices regulations of the federal trade commission, and shall comply with requirements to prevent unfair or deceptive acts or practices specified in such regulations.

AB868-ASA1,14,9 (i) 1. A licensed funeral director or operator of a funeral establishment who, either directly or through an agent, solicits the sale of or sells a burial agreement funded with the proceeds of a life insurance policy shall maintain a record of the burial agreement that identifies the life insurance policy used to fund the agreement.

AB868-ASA1,14,13 2. The funeral director under subd. 1. or the funeral director in charge of the funeral establishment under subd. 1. shall make a record maintained under subd. 1. available to the examining board if the board submits a written request to examine the record to the funeral director at least 3 days before the examination is to occur.

AB868-ASA1,14,15 (j) 1. The examining board shall promulgate rules establishing all of the following:

AB868-ASA1,14,17 a. Training requirements that an insurance intermediary licensed under ch. 628 must satisfy to sell or solicit the sale of a burial agreement under this subsection.

AB868-ASA1,14,19 b. Minimum standards that an individual burial agreement must satisfy if it is funded with the proceeds of a life insurance policy.

AB868-ASA1,14,23 c. Minimum standards that a contract between an agent and an operator of a funeral establishment must satisfy to authorize the agent to sell or solicit the sale of a burial agreement funded with the proceeds of a life insurance policy on behalf of the operator of the funeral establishment.

AB868-ASA1,15,2 d. The form and content of written notice that a licensed funeral director, operator of a funeral establishment or agent of a licensed funeral director or operator of a funeral establishment is required to provide to the examining board under par. (h).

AB868-ASA1,15,7 2. The examining board may promulgate rules establishing standards for marketing practices for burial agreements, including standards for telephone solicitation of prospective purchasers. The rules promulgated under this subdivision may prohibit a method of telephone solicitation if the examining board determines that the prohibition is necessary to protect the public.

AB868-ASA1,15,12 3. The examining board shall prepare and distribute a booklet that describes the differences between funding a burial agreement with the proceeds of a life insurance policy under this subsection and entering into a burial agreement funded by a trust under sub. (1). The examining board may charge a reasonable fee for the cost of preparation and distribution of the booklet.

AB868-ASA1, s. 17 Section 17. 445.125 (4) of the statutes is renumbered 445.125 (4) (intro.) and amended to read:

AB868-ASA1,15,16 445.125 (4) (title) Applicability. (intro.) This section shall not apply to any of the following:

AB868-ASA1,15,18 (a) A contract to provide funeral and burial service for any person if such contract is incidental to maintaining such person in a home, hospital or institution.

AB868-ASA1, s. 18 Section 18. 445.13 (1) of the statutes is amended to read:

AB868-ASA1,16,6 445.13 (1) Subject to the rules promulgated under s. 440.03 (1), the examining board may make investigations, subpoena witnesses, conduct hearings, limit, suspend or revoke licenses a license of a funeral directors, certificates director, a certificate of registration of apprentices and permits an apprentice or a permit of operators an operator of a funeral establishments establishment and reprimand a funeral directors, apprentices and director, apprentice or operator of a funeral establishments establishment for any violation of 15 USC 45 and 57, of this chapter or of any rule of the department of health and family services or the examining board or, for unprofessional conduct, including misrepresentation or fraud in obtaining the license, permit or certificate of registration, or for any violation of this chapter or any rule of the examining board by an agent authorized by the funeral director or operator of the funeral establishment under s. 445.125 (3m) (b) 2. a.

AB868-ASA1, s. 19 Section 19. 445.13 (1e) of the statutes is created to read:

AB868-ASA1,16,12 445.13 (1e) In addition to or in lieu of a reprimand or limitation, suspension or revocation of a license or permit under sub. (1), the examining board may assess against any person who violates s. 445.12 (3g) or (3r) or 445.125 (3m) or a rule promulgated under s. 445.125 (3m) (j) a forfeiture of no more than $1,000 for each violation.

AB868-ASA1, s. 20 Section 20. 445.13 (2) of the statutes is amended to read:

AB868-ASA1,16,16 445.13 (2) No reprimand or order limiting, suspending or revoking a license, certificate of registration or permit, or no assessment of forfeiture, shall be made until after a public hearing conducted by the examining board.

AB868-ASA1, s. 21 Section 21. 445.15 (1) of the statutes is amended to read:

AB868-ASA1,16,21 445.15 (1) Any Except as provided in sub. (1m), any person violating any provision of this chapter or any rule of the department of health and family services and the examining board relating to its subject matter, shall be fined not less than $50 nor more than $200, or imprisoned not less than 30 days nor more than 3 months.

AB868-ASA1, s. 22 Section 22. 445.15 (1m) of the statutes is created to read:

AB868-ASA1,17,3 445.15 (1m) A funeral director or operator of a funeral establishment who violates s. 445.12 (3r) shall be fined not more than $5,000 for each violation. Each day that an insurance intermediary authorized by a funeral director or operator of a funeral establishment fails to meet the training requirements established by the examining board by rule under s. 445.125 (3m) (j) 1. a. constitutes a separate violation of s. 445.12 (3r) (b).

AB868-ASA1, s. 23 Section 23. 632.41 (2) of the statutes is renumbered 632.41 (2) (a) and amended to read:

AB868-ASA1,17,9 632.41 (2) (a) No Except as provided in par. (b), no contract in which the insurer agrees to pay for any of the incidents of burial or other disposition of the body of a deceased may provide that the benefits are payable to a funeral director or any other person doing business related to burials.

AB868-ASA1, s. 24 Section 24. 632.41 (2) (b) of the statutes is created to read:

AB868-ASA1,17,18 632.41 (2) (b) 1. A life insurance policy may provide for the assignment of the proceeds of the policy to a funeral director or operator of a funeral establishment if the insurance intermediary who sells or solicits the sale of the policy is not an agent of the funeral director or operator of the funeral establishment or if the assignment of proceeds is contingent on the provision of funeral merchandise or funeral services as provided for in a burial agreement that satisfies the requirements of s. 445.125 (3m) and rules promulgated by the funeral directors examining board under s. 445.125 (3m) (j) 1. b.

AB868-ASA1,17,21 2. Subject to subd. 3., the commissioner shall by rule establish minimum standards for benefits, claims payments, marketing practices, compensation arrangements and reporting practices for life insurance policies sold under subd. 1.

AB868-ASA1,18,2 3. A life insurance policy sold under subd. 1. shall permit the policyholder to designate a different beneficiary, after written notice to the current beneficiary, and a different funeral director or operator of a funeral establishment that is to receive the assignment of proceeds, after written notice to the current funeral director or operator of the funeral establishment.

AB868-ASA1, s. 25 Section 25. 701.12 (1) of the statutes is amended to read:

AB868-ASA1,18,6 701.12 (1) By written consent of the settlor and all beneficiaries of a trust or any part thereof, such trust or part thereof may be revoked, modified or terminated, except as provided under s. 445.125 (1) (b) (a) 2. to (d) 4.

AB868-ASA1, s. 26 Section 26 . Nonstatutory provisions.

AB868-ASA1,18,12 (1) The office of the commissioner of insurance shall submit in proposed form the rules required under section 632.41 (2) (b) 2. of the statutes, as created by this act, to the legislative council staff under section 227.15 (1) of the statutes no later than the first day of the 7th month beginning after the effective date of this subsection.

AB868-ASA1,18,17 (2) The funeral directors examining board shall submit in proposed form the rules required under section 445.125 (3m) (b) 2. b. and (j) 1. of the statutes, as created by this act, to the legislative council staff under section 227.15 (1) of the statutes no later than the first day of the 7th month beginning after the effective date of this subsection.

AB868-ASA1,18,21 (3) The funeral directors examining board shall prepare for distribution the booklet required under section 445.125 (3m) (j) 3. of the statutes, as created by this act, no later than the first day of the 7th month beginning after the effective date of this subsection.

AB868-ASA1, s. 27 Section 27. Effective dates. This act takes effect on the first day of the 13th month beginning after publication, except as follows:

AB868-ASA1,19,2 (1) The treatment of Section 26 of this act takes effect on the day after publication.

AB868-ASA1,19,3 (End)