Ala. Admin. Code r. 482-3-004-.02

Current through Register Vol. 43, No. 02, November 27, 2024

Section 482-3-004-.02 - Funding Methods

(1) The following are available for use as the funding methods to defray the cost of future performance of preneed contracts:

(a) A funeral or cemetery merchandise and services trust.

(b) Life insurance or annuities sold in conjunction with the preneed contract.

(c) A preneed seller's current revenues if the seller has in force an approved surety bond.

(d) A preneed seller's current revenues if the seller has in force an approved letter of credit.

(2) If a preneed seller is funding preneed contracts through the use of a trust, the timing and percentage of trust deposits must be consistent for all preneed contracts sold. The Commissioner must approve any subsequent change in the method on such terms and conditions as the Commissioner may prescribe.

(3) Preneed contract forms must identify the funding method being used and contain provisions pertinent to that method, and not include references to or provisions relevant only to another funding method.

(4) A preneed seller must maintain a detailed and accurate record of funds collected in payment for preneed contracts and disbursements of those funds as pertinent to the funding method used.

Ala. Admin. Code r. 482-3-004-.02

Adopted by Alabama Administrative Monthly Volume XXXIII, Issue No. 02, November 26, 2014, eff. 1/1/2015.

Author: Commissioner of Insurance

Statutory Authority:Code of Ala. 1975, §§ 27-2-17, 27-17A-1 to -57 (2014).