Rule 590-3-4-.01 - Preneed Escrow Accounts(1) Establishment of Account. Each preneed dealer that has not established a trust fund account pursuant to Section 10-14-7 or 10-14-7.1 of the Act shall establish one or more preneed escrow accounts into which deposits shall be made pursuant to Section 10-14-7 of the Act. Said accounts shall be either segregated (containing the deposits required to be made as a result of a single transaction) or aggregated (containing deposits required to be made as a result of multiple transactions). In the event all services and merchandise under a contract have been provided or funds for any merchandise or services have been refunded pursuant to the Act and these Rules, and said funds were in a segregated account, the account may be closed upon payment of funds from the account. In the event funds are originally deposited into an aggregated account, they may subsequently be deposited into a segregated account, provided the amount of funds deposited on account of any transaction is not less than the amount which would be required to be refunded pursuant to Section 10-14-17(a)(3) or 10-14-17(a)(4) of the Act and these Rules.(2) Funding through Insurance.(a) In the event that an insurance policy is opened for the purpose of funding preneed burial or funeral services and is titled, either solely or jointly, in the name of a registrant, or if the purchaser makes an irrevocable payable-upon death designation in favor of the registrant, the registrant must establish and maintain a record of each insurance policy and the funds allocated to such policy. The insurance policy will be subject to the filing requirements of the Act and the Rules and Regulations with regard to the account.(b) In the event thatan Insurance Policyis titled in the name of the customer only and no irrevocable payable-upon-death designation is made, the funds will not be subject to the escrow requirements of the Act. However, the cost of the insurance policy must be paid directly by the customer to the insurance provider. If a registrant takes possession of or accumulates funds for the purpose of purchasing a Insurance Policy on the customer's behalf, this will render the transaction a preneed sale requiring the registrant to hold the Insurance Policy in escrow as an asset of the account and will be subject to the funding and filing requirements of the Act and the Rules and Regulations.(3) Funding through Certificates of Deposit for Segregated Accounts.(a) Dealer Owned Certificates of Deposit. In the event that a Certificate of Deposit opened for the purpose of funding preneed burial or funeral services is titled jointly in the name of the registrant, in the registrant's federal employee identification number (FEIN) or if the purchaser makes an irrevocable payable-upon death designation in favor of the registrant, the registrant must establish and maintain a preneed escrow account as required by the Act. The Certificate of Deposit must be held in escrow as an asset of the account and will be subject to the funding and filing requirements of the Act and the Rules and Regulations with regard to the account.(b) Customer Owned Certificates of Deposit. In the event thata Certificate of Depositis titled in the name of the customer only and no irrevocable payable-upon-death designation is made, the funds will not be subject to the escrow requirements of the Act. However, the cost of the Certificate of Deposit must be paid directly by the customer to the financial institution. If a registrant takes possession of or accumulates funds for the purpose of purchasing a Certificate of Deposit on the customer's behalf or if a registrant takes possession of a Certificate of Deposit, which by its terms is payable to the bearer rather than to the order of the customer, this will render the transaction a preneed sale requiring the registrant to hold the Certificate of Deposit in escrow as an asset of the account and will be subject to the funding and filing requirements of the Act and the Rules and Regulations.(c) Transfer of Funds. No less than ten (10) days prior to transfer of escrow funds, the registrant shall file a notice with the Office of the Secretary of Statecontaining the following: 1. The name, location, mailing address, and telephone number of the registrant's principal business location in Georgia, together with any trade names associated with each location;2. If transferring funds between one or more accounts within the same depository, the names of the accounts and account numbers being transferred. If transferring funds from one depository to another, the name, address, location, and telephone number of the new depository and the names of the accounts and account numbers being transferred to the new depository;3. A dated and notarized signature of the individual duly authorized to sign the notice filing, including the signatory's printed name and title. If the cemetery is incorporated, the president or authorized individual shall sign; Within thirty (30) days after transferring funds from one depository to another, the former depository shall submit to the Secretary of State verification listing each certificate of deposit held in escrow as of the date of closing of the preneed escrow account(s); and
Within thirty (30) days after transferring funds from one depository to another, the new depository shall submit to the Secretary of State verification listing each certificate of deposit to be held in escrow as of the date of opening of the new preneed escrow account(s).
(4) Depositories. (a) In addition to those depositories allowed in Section 10-14-7(c) of the Act, the preneed escrow account may be established and maintained with an insurance company which has an A. M. Best rating of B+ or better and is licensed and in good standing with the Georgia Insurance Commissioner.(b) Any other financial institution not specifically noted in this Rule or the Act as an authorized depository may petition the Secretary of State for approval. The Secretary of State may approve such institution as a depository if it demonstrates to the Secretary of State its financial soundness and responsibility and complies with the other requirements of this Rule.(c) No less than ten (10) days prior to moving a preneed escrow account from one depository to another, the preneed dealer required to establish and maintain a preneed escrow account pursuant to Section 10-14-7 of the Act shall file a notice with the Office of the Secretary of State containing the following: 1. The name, location, mailing address, and telephone number of the registrant's principal business location in Georgia, together with any trade names associated with each location;2. The name, address, location, and telephone number of the new depository and the names of the accounts and account numbers being transferred to the new depository; and3. A dated and notarized signature of the individual duly authorized to sign the notice filing, including the signatory's printed name and title. If the cemetery is incorporated, the president or authorized individual shall sign.(d) Within thirty days after moving a preneed escrow account from one depository to another, the former depository shall submit certification to the Office of the Secretary of State showing the actual account balances for the preneed escrow account as of the date of closing of the preneed escrow account.(e) Within thirty days after moving a preneed escrow account from one depository to another, the new depository shall submit written verification to the Office of the Secretary of State showing the actual account balances for the preneed escrow account as of the date of opening of the new preneed escrow account.(5) Escrow Agent. (a) The following persons may act as the escrow agent of the preneed escrow account: 1. A bank incorporated pursuant to Official Code of Georgia Annotated Section 7-1-390, et seq., as now or hereafter amended, and located in this state and authorized to exercise and validly exercising the powers of a fiduciary pursuant to Article 2, Chapter 1 of Title 7 of the Official Code of Georgia Annotated, as now or hereafter amended;2. A building and loan or savings and loan association incorporated pursuant to Official Code of Georgia Annotated Section 7-1-770, et seq., as now or hereafter amended, and located in this state and authorized to exercise and validly exercising the powers of a fiduciary pursuant to Article 7, Chapter 1 of Title 7 of the Official Code of Georgia Annotated, as now or hereafter amended;3. A trust company incorporated pursuant to Official Code of Georgia Annotated Section 7-1-390, et seq., as now or hereafter amended, and located in this state, and authorized to exercise and validly exercising the powers of a fiduciary pursuant to Article 2, Chapter 1 of Title 7 of the Official Code of Georgia Annotated, as now or hereafter amended;4. A national bank with an office located in this state and authorized to act as a fiduciary under the laws of the United States; and5. A federally chartered savings and loan association with an office located in this state and authorized to act as a fiduciary under the laws of the United States.(b) Any prospective escrow agent not specifically described in this Rule may petition the Secretary of State for approval.(c) No less than ten (10) days prior to any change or substitution of the escrow agent of a preneed escrow account, the preneed dealer required to establish and maintain a preneed escrow account pursuant to Section 10-14-7 of the Act shall file a notice with the Office of the Secretary of State containing the following: 1. The name, location, mailing address, and telephone number of the registrant's principal business location in Georgia, together with any trade names associated with each location;2. The name, telephone number and address, including city, state and zip code, of the new escrow agent;3. A copy of the preneed escrow agreement executed by the registrant and accepted by the new escrow agent, and evidence satisfactory to the Secretary of State of the deposit into such account of the amounts required under Section 10-16-7 of the Act, the preneed escrow agreement being conditioned only upon receipt by the Secretary of State of the notice required by this Rule;4. The name, address, location, and telephone number of the preneed escrow account depository or depositories, the names of the accounts, and the account numbers;5. A dated and notarized signature of the individual duly authorized to sign the notice filing, including the signatory's printed name and title. If the cemetery is incorporated, the president or authorized individual shall sign.(d) Within thirty days after any change or substitution of the escrow agent of a preneed escrow account, the prior escrow agent shall submit to the Office of the Secretary of State the following: 1. The yearly financial report set forth in Section 10-14-7(h) of the Act calculated based on the year-to-date with respect to the preneed escrow account; and2. Written certification of the amount of funds transferred to the new escrow agent.(e) Within thirty days after any change or substitution of the escrow agent of a preneed escrow account, the new escrow agent shall submit to the Office of the Secretary of State verification of the funds received.(6) If amounts received pursuant to Section 10-14-7 of the Act are deposited in a preneed escrow account which bears interest, a sum not less than the lesser of 10 percent of the escrowed amount or one-half of the interest earned as of the date of release may be retained by the preneed dealer as an administrative fee for reimbursement of the preneed dealer for costs. The remaining interest shall be retained in the account with the principal and shall be held, accounted for and transferred in the same manner as the principal amount to assure delivery of the same quality of service and merchandise for which the preneed contract was made.(7) Conversion of Preneed Escrow Account to Trust(a) A preneed dealer that established one or more preneed escrow accounts into which deposits were made pursuant to Section 10-14-7 of the Act may transfer one or more existing preneed escrow accounts into a preneed trust account pursuant to Sections 10-14-7 or 10-14-7.1 of the Act, as applicable.(b) No less than ten (10) days prior to transferring a preneed escrow account to a preneed trust account, the preneed dealer required to establish and maintain such account pursuant to Section 10-14-7 or 10-14-7.1 1 shall file a notice with the Office of the Secretary of State containing the following: 1. The name, location, mailing address, and telephone number of the registrant's principal business location in Georgia, together with any trade names associated with each location;2. The name, telephone number and address, including city, state and zip code, of the new trustee of the preneed trust fund;3. A copy of the preneed trust fund agreement executed by the registrant and accepted by the new trustee;4. The names of the accounts and account numbers being transferred from the preneed escrow account.5. The name, address, location, and telephone number of the preneed trust fund depository or depositories, the names of the trust accounts, and the trust account numbers;6. A dated and notarized signature of the individual duly authorized to sign the notice filing, including the signatory's printed name and title. If the cemetery is incorporated, the president or authorized individual shall sign; and7. If the person signing did not prepare the notice filing, the printed name, signature, and title of the person who prepared the notice filing is required.(c) Within thirty days after transferring a preneed escrow account to a preneed trust account, the former escrow agent shall submit to the Office of the Secretary of State: 1. The yearly financial report set forth in Section 10-14-7(h) of the Act calculated based on the year-to-date with respect to the preneed account(s); and2. Written certification showing the account balances for the escrow account as of the date of closure of the preneed escrow account;(d) Within thirty days after transferring a preneed escrow account to a preneed trust account, the the new depository shall submit to the Office of the Secretary of State verification showing the account balances for the preneed trust as of the date of opening of the new preneed trust;Ga. Comp. R. & Regs. R. 590-3-4-.01
O.C.G.A. §§ 10-14-3.1 and 10-14-14.
Original Rule entitled "Preneed Escrow Accounts" was filed as Emergency Rule 590-3-4-0.11-.01 on July 7, 1983; effective July 1, 1983, the date of adoption, to remain in effect for 120 days or until the effective date of a permanent Rule covering the same subject matter is adopted, as specified by the Agency.Amended: Permanent Rule of the same title adopted. Filed September 9, 1983; effective October 5, 1983, as specified by the Agency.Amended: Filed December 20, 1988; effective January 9, 1989.Repealed: New Rule, same title held in Reserve. F. July 26, 2000; eff. August 15, 2000.Amended: New Rule of same title adopted. F. Jan 17, 2002; eff. February 6, 2002.Repealed: New Rule of same title adopted. F. May 19, 2005; eff. June 8, 2005.Amended: F. May 21, 2013; eff. June 10, 2013.