Bill Text: IA HF2155 | 2021-2022 | 89th General Assembly | Enrolled

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Bill Title: A bill for an act relating to preneed sellers and purchase agreements for cemetery merchandise, funeral merchandise, and funeral services, providing penalties, and including applicability provisions. (Formerly HSB 546.) Effective date: 07/01/2022. Applicability date: 07/01/2022.

Sponsorship: Committee Bill

Status: (Passed) 2022-05-02 - Signed by Governor. H.J. 868. [HF2155 Detail]

Download: Iowa-2021-HF2155-Enrolled.html

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House File 2155 - Enrolled
House File 2155
AN ACT
RELATING TO PRENEED SELLERS AND PURCHASE AGREEMENTS FOR
CEMETERY MERCHANDISE, FUNERAL MERCHANDISE, AND FUNERAL
SERVICES, PROVIDING PENALTIES, AND INCLUDING APPLICABILITY
PROVISIONS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
Section 1. Section 523A.207, Code 2022, is amended by
striking the section and inserting in lieu thereof the
following:
523A.207 Transfer of preneed purchase agreements —— sale of
a business or business assets.
1. A purchase agreement shall not be sold or transferred as
part of the sale of a business, or of the assets of a business,
until the seller of the business has provided all of the
following to the buyer of the business:
a. A copy of the most recent annual report filed with the
commissioner by the seller.
b. The aggregate amount of any interest income withdrawn
to date from trust accounts pursuant to section 523A.201,
subsection 8.

House File 2155, p. 2
c. Copies of all purchase agreements to be assumed by the
buyer.
d. A list of the purchase agreements provided under
paragraph “c” that includes all of the following:
(1) The name of the purchaser and the name of the seller of
each purchase agreement.
(2) The total dollar amount of each purchase agreement.
(3) The date each purchase agreement was executed.
(4) Whether each purchase agreement is guaranteed,
nonguaranteed, or mixed, and affirm or deny one hundred percent
trusting of any guaranteed items and specify the lesser amount
or percentage placed in trust, if applicable.
e. A list of insurance policies that are applicable to the
purchase agreements provided under paragraph “c” . The list
shall identify the purchase agreement to which each insurance
policy applies, the named policyholder on each insurance
policy, and the face amount of each insurance policy.
f. A list of trust fund beneficiaries and the amount in
trust for each beneficiary.
g. A list that identifies and describes any items of presold
merchandise that are not fully funded with insurance or trust
funds in compliance with this chapter, and the amount or
percentage that is either unfunded or underfunded.
2. a. The seller of a business shall file a disclosure
with the commissioner that contains the information required
under subsection 1, paragraphs “d” and “e” , at least thirty
calendar days prior to the date of the transfer of any purchase
agreements to the buyer.
b. If the seller fails to file the disclosure required under
paragraph “a” , the commissioner may suspend the buyer’s preneed
seller’s license, the seller’s preneed seller’s license, and
the license of any sales agent authorized to sell for the buyer
or seller until the disclosure is filed. In addition, the
commissioner may assess a penalty against the buyer or seller
in an amount up to one hundred dollars for each calendar day
that the disclosure remains unfiled. The commissioner shall
allow a thirty-day grace period after the date that a purchase
agreement is sold or transferred before the commissioner
suspends the preneed seller’s license of the buyer, seller, or

House File 2155, p. 3
of a sales agent authorized to sell for the buyer or seller,
or assesses a penalty against the buyer or seller. Upon
good cause, the commissioner may issue an order waiving the
disclosure requirement.
3. All records maintained by the commissioner under this
section shall be confidential pursuant to section 22.7,
subsection 58, and shall not be made available for inspection
or copying except upon prior written approval of either the
commissioner or the attorney general, or if sought by the
preneed seller to whom the records relate. Such records shall
be privileged and confidential in a judicial or administrative
proceeding except for any of the following:
a. An action commenced by the commissioner.
b. An administrative proceeding brought by the division.
c. An action or proceeding which arises out of the criminal
provisions of the laws of this state or of the United States.
d. An action brought by the division or the attorney general
to recover moneys from embezzlement, misappropriation, or
misuse of trust funds.
Sec. 2. Section 523A.401, subsection 4, Code 2022, is
amended to read as follows:
4. The premiums of any new insurance policy shall be
fully paid If a preneed funeral purchase agreement contains
a provision stating that the agreement will be funded by the
purchase of a new insurance policy, the insurance producer
who sells the insurance policy that will fund the purchase
agreement shall require that any payment made by the purchaser
shall be made payable only to the insurance company designated
in the purchase agreement. The insurance producer shall
remit the insurance policy application and the premium made
payable to the insurance company designated in the purchase
agreement to the insurance company within thirty calendar days
after execution of the purchase agreement or, with respect
to a purchase agreement that provides for periodic payments,
the premiums shall be paid directly by the purchaser to the
insurance company issuing that issues the insurance policy.
Sec. 3. Section 523A.402, subsection 4, Code 2022, is
amended to read as follows:
4. The premiums of any new annuity shall be fully paid

House File 2155, p. 4
If a preneed funeral purchase agreement contains a provision
stating that the agreement will be funded by the purchase of
a new annuity, the insurance producer who sells the annuity
that will fund the purchase agreement shall require that any
payment made by the purchaser shall be made payable only to the
insurance company designated in the purchase agreement. The
insurance producer shall remit the annuity application and the
premium made payable to the insurance company designated in
the purchase agreement to the insurance company within thirty
calendar days after execution of the purchase agreement or,
with respect to a purchase agreement that provides for periodic
payments, the premiums shall be paid directly by the purchaser
to the insurance company issuing that issues the annuity.
Sec. 4. NEW SECTION . 523A.505 Duty to disclose.
1. A sales agent, and any person who owns at least five
percent of a preneed seller business, shall have an ongoing
duty to disclose to the commissioner all felony crimes and
those misdemeanor-level crimes involving dishonesty or false
statement for which the sales agent or person has been found
guilty, or for which the sales agent or person has pled
guilty or no contest. Such disclosure shall be made to the
commissioner within thirty calendar days of the date that
the sales agent or person has been found guilty by a court
of competent jurisdiction, or of the date the sales agent or
person pleads not guilty or no contest.
2. A sales agent, and any person who owns at least five
percent of a preneed seller business, shall have an ongoing
duty to disclose to the commissioner all liens and judgments
over twenty thousand dollars that have been entered against
the sales agent or person, and all bankruptcy petitions that
have been filed by the sales agent or person. Such disclosure
shall be made to the commissioner within thirty calendar days
of the date on which the lien or judgment is entered, or of the
date on which the sales agent or person files a petition for
bankruptcy.
Sec. 5. NEW SECTION . 523A.506 Business continuity planning.
A preneed seller shall establish, implement, and maintain
written procedures relating to business continuity and
succession planning. The business continuity and succession

House File 2155, p. 5
plan shall be based upon the specific facts and circumstances
of the preneed seller’s business model including the size of
the preneed seller’s business, the types of services provided,
and the number of physical locations established and maintained
by the preneed seller. The plan must provide for all of the
following:
1. The protection, secure backup, and recovery of the
preneed seller’s business records.
2. Alternative forms of communication to ensure timely
notice of all of the following to customers, key personnel,
employees, vendors, and service providers:
a. A significant business interruption.
b. The death or unavailability of key personnel.
c. A disruption of service.
d. The cessation of business activities.
3. Reassignment of key duties to qualified individuals in
the event of the death or unavailability of key personnel.
4. Minimization and mitigation of service disruptions and
negative impacts to clients that may result from a significant
business interruption.
Sec. 6. NEW SECTION . 523A.605 Allocation of growth or
interest.
If a purchase agreement funded by insurance proceeds under
section 523A.401 or by annuity proceeds under section 523A.402
includes nonguaranteed merchandise or services, the purchaser,
beneficiary, or the beneficiary’s estate shall receive a credit
for, and the benefit of, any growth in death benefits that is
at least equal to the percentage of the total price under the
purchase agreement that is attributable to the nonguaranteed
merchandise or services.
Sec. 7. Section 523A.807, subsection 3, unnumbered
paragraph 1, Code 2022, is amended to read as follows:
If the commissioner finds that a person has violated section
523A.201 , 523A.202 , 523A.203 , 523A.204 , 523A.207 , 523A.401 ,
523A.402 , 523A.403 , 523A.404 , 523A.405 , 523A.501 , 523A.502 ,
or 523A.502A , 523A.505, or 523A.605, or any rule adopted
pursuant thereto, the commissioner may order any or all of the
following:

House File 2155, p. 6
Sec. 8. APPLICABILITY. The following applies to purchase
agreements sold or transferred as part of the sale of a
business, or the assets of a business, on or after July 1,
2022:
The section of this Act amending section 523A.207.
______________________________ ______________________________
PAT GRASSLEY JAKE CHAPMAN
Speaker of the House President of the Senate
I hereby certify that this bill originated in the House and
is known as House File 2155, Eighty-ninth General Assembly.
______________________________
MEGHAN NELSON
Chief Clerk of the House
Approved _______________, 2022 ______________________________
KIM REYNOLDS
Governor