Section 1267 - Keeping of Preneed Books, Accounts, Contracts, and RecordsEach funeral establishment charged with the reporting of preneed funds hereunder shall at all times maintain or cause the trustee of the preneed trust to maintain in California and available for inspection by the bureau during reasonable working hours, complete financial records of all preneed contracts and arrangements, which records shall be established and maintained in accordance with generally accepted accounting principles. Such records shall include the following, provided, however, that records may otherwise be established and maintained in accordance with generally accepted accounting principles:
(a) An individual trustor contract, plan, or agreement.(b) An individual trustor or beneficiary ledger account which shall set forth the amount of the contract, all payments received, all disbursements made, and all income prorated in accordance with the ratio which the trust corpus of the account bears to the entire corpus invested as set forth in Section 1265.(c) For a licensed successor funeral establishment that has accepted the transfer of preneed contracts and arrangements from another funeral establishment pursuant to Section 7737(c)(1) of the Code, a copy of the written notice to all beneficiaries, trustors, legal representatives of the beneficiaries or trustors, and trustees ("consumers") associated with the preneed funeral agreements required by Section 7737.1(a)(4)(B) of the Code and proof the notice was provided as defined in Section 1267.1.(d) A cash receipts journal which shall show each payment received and be totaled monthly.(e) A cash disbursements journal which shall show each withdrawal and be totaled monthly.(f) In the case where a checking account is used to deposit payments received or disbursements to the funeral establishment and/or the funeral director, a trustor, or an investment, it shall be designated as a trust fund account, and be reported as such. It shall be reconciled each month with the balance shown in the trust account by accounting for checks not yet presented and outstanding, bank deposits not shown on the bank statements, and other adjustments required.(g) A general ledger which shall be posted monthly with respect to all accounts controlling the fiduciary relationship with the individual trustors. Such postings shall occur within ninety (90) days after the close of each business month.(h) A portfolio of all investments related to the trust funds.(i) Records for serviced accounts shall include but not be limited to: (1) A copy of the death certificate or other satisfactory evidence of the death; copies of all documents required as specified under Sections 7685 and 7685.2 of the Business and Professions Code; a copy of the final arrangements (itemized); and a copy of the final statement to the family.(2) All monies received from the trust; all monies received from the family; and all monies received from the Veterans Administration or Social Security or any other source to be applied to the final bill.(3) A record showing credit for each of the above.(j) Records for canceled accounts shall include but not be limited to: (1) A record of all monies received, income earned, and documented expenses taken, including a revocation fee as stated in Section 7735 of the Business and Professions Code which shall include a copy of the individual trustor or beneficiary account record.(2) A copy of the final accounting provided to the family with the cancelled check or withdrawal slip showing the amount refunded to the trustor.(k) Records for accounts held by licensed funeral establishments that have escheated preneed accounts in accordance with the Unclaimed Property Law subject to the Code of Civil Procedure section 1518.5 (a) through (c) shall include a copy of the following documents: (1) Proof of remittance of funds in accordance with the Unclaimed Property Law (Chapter 7 (commencing with Section 1500) of Title 10 of Part 3 of the code of Civil Procedure). For this section "proof" means bank statements and if available, canceled checks.(2) Record of the final total escheated for each account. This record shall be in the form of an individual trustor or beneficiary ledger account as specified in Section 1267(b) and must include the date of remittance.(l) All of the foregoing records shall be retained for a period of one (1) year after the account has been canceled, serviced, or escheated and audited by the bureau and compliance with all recommendations made and audit exceptions resolved or seven (7) years from the date of service, cancellation, or escheatment, whichever comes first. The required books and records for more than one (1) licensed funeral establishment may be centrally maintained at a single location in California with notification to the bureau or the main office as defined in Section 1204(c)(2), provided that a monthly summary of all financial transactions pertaining to each individual trust account for each licensed funeral establishment is available, at each such establishment during reasonable working hours, to the bureau or its authorized representatives; and provides further that the monthly summary contains sufficient information from which the current balance of each individual trustor's account or each individual trustor's share of any commingled trust account may be identified.
Cal. Code Regs. Tit. 16, § 1267
1. Amendment filed 7-3-80; effective thirtieth day thereafter (Register 80, No. 27). For prior history, see Register 72, No. 9; and 77, No. 25.
2. Amendment file 7-3-86; effective thirtieth day thereafter (Register 86, No. 27).
3. Amendment of first paragraph, subsections (d) and (e), and last paragraph filed 10-31-97; operative 11-30-97 (Register 97, No. 44).
4. Change without regulatory effect amending first paragraph and subsections (f) and (j) filed 9-22-2011 pursuant to section 100, title 1, California Code of Regulations (Register 2011, No. 38).
5. Amendment of section heading and section filed 2-9-2023; operative 2-9-2023 pursuant to Government Code section 11343.4(b)(3) (Register 2023, No. 6). Note: Authority cited: Sections 7606 and 7740, Business and Professions Code. Reference: Sections 7735, 7737 and 7740, Business and Professions Code.
1. Amendment filed 7-3-80; effective thirtieth day thereafter (Register 80, No. 27). For prior history, see Register 72, No. 9; and 77, No. 25.
2. Amendment file 7-3-86; effective thirtieth day thereafter (Register 86, No. 27).
3. Amendment of first paragraph, subsections (d) and (e), and last paragraph filed 10-31-97; operative 11-30-97 (Register 97, No. 44).
4. Change without regulatory effect amending first paragraph and subsections (f) and (j) filed 9-22-2011 pursuant to section 100, title 1, California Code of Regulations (Register 2011, No. 38).
5. Amendment of section heading and section filed 2-9-2023; operative 2/9/2023 pursuant to Government Code section 11343.4(b)(3) (Register 2023, No. 6).