Ala. Admin. Code r. 482-3-004-.06
Current through Register Vol. 43, No. 02, November 27, 2024
Section 482-3-004-.06 - Cemetery Merchandise And Services Trust - Deposits(1) Any person who is paid, collects or receives funds under a cemetery preneed contract to be funded by trust shall deposit in trust an amount as follows: (a) 110% of wholesale cost for all cemetery merchandise.(b) 60% of the purchase price specified in the preneed contract for outer burial containers.(c) 60% of the purchase price specified in the preneed contract for cemetery services.(d) 100% of the purchase price specified for all cash advance items sold in the preneed contract.(e) 75% of the purchase price for caskets.(2) For all preneed contracts entered into prior to January 1, 2015, the required deposits to trust shall be made within 30 days after the end of the calendar month in which the preneed contracts is paid in full, unless, prior to that time, all liabilities of the seller under the preneed contract to deliver the specific cemetery merchandise or cemetery services, or both, or the specific cash advances, identified as properly allocated to the payment, have been satisfied, or the preneed contract is validly cancelled.(3) For preneed contracts entered into on or after January 1, 2015, the seller's obligation to make trust deposits shall commence not later than thirty (30) calendar days after the end of the calendar month in which the sum of the monies collected on the preneed contract exceeds the amount that is not required to be deposited in trust. The seller shall thereafter deposit the appropriate amount in trust not later than thirty (30) days after the end of the month in which each payment on the preneed contract is collected.(4) At the time of fulfillment of the preneed contract, the seller may withdraw the principal amount in trust, less any loss of the value of the principal, attributable to items or services fulfilled, delivered, or performed on the contract.(5) In order to withdraw amounts representing earnings or gain attributable to trust assets or amounts otherwise exceeding the amount needed to perform preneed contracts: (a) The fair market value of the trust representing all contracts that are paid-in-full must exceed 110 percent of the total sum of the following: 1. 110% of the current wholesale cost of all cemetery merchandise.2. 60% of the current retail price of all cemetery services.3. 60% of the current retail price of all outer burial containers.4. 75% of the current retail price of all caskets.5. 100% of the current retail price of all cash advances.(b) The fair market value of the trust representing all contracts that are not paid-in-full must exceed 25% of the total sum of the following: 1. 110% of the current wholesale cost of the liability to deliver all cemetery merchandise (including caskets and outer burial containers).2. 60% of the current retail price of all cemetery services.3. 100% of the current retail price of all cash advances.(6) An analysis using the formula in paragraph (5) shall be made annually by the seller, certified under oath by the seller, and provided to the trustee. If the certified analysis evidences an excess in trust beyond the amount calculated under paragraph (5), the certificate holder may withdraw and retain all or part of that excess. If such analysis evidences that the fair market value of the trust is less than 100% of the aggregate calculated amount, within twelve (12) months thereafter, the certificate holder shall, from its own funds, contribute the amount necessary to restore the trust fund to an amount not less than 100% of the aggregate amount calculated.(7) If the amount paid by the purchaser under a preneed contract for cemetery merchandise has been previously been deposited in trust, the seller may withdraw the principal amount, less any loss of the value of the principal, at the time the cemetery merchandise is delivered or installed or the merchandise is placed in storage with a responsible third party bonded and insured for the wholesale value. Such merchandise can only be comprised of materials designed to withstand prolonged, protected storage without deterioration, and cannot be caskets or alternative containers. If the merchandise is stored, a record specifically identifying each item, the specific preneed contract number, the location of the site, and the identity and address of the bonding and insuring parties, must be attached to the purchaser's record.(8) Any withdrawal from the trust must be made under oath by an officer of the certificate holder and attested before a notary public. The sworn statement shall certify that the contract has been cancelled, partially fulfilled by delivery or installation, or completely fulfilled.Ala. Admin. Code r. 482-3-004-.06
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).