Bill Text: IL HB3353 | 2019-2020 | 101st General Assembly | Introduced

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Bill Title: Amends the Illinois Funeral or Burial Funds Act. Defines "agent". Requires that pre-need contracts include the telephone number for the principal office of the seller and the parent company of the seller, if any. Requires that a pre-need contract is ratified within 10 business days by a licensed funeral director who is employed by the licensed funeral home firm responsible for providing the funeral goods and services. If the pre-need contract is funded by a trust, requires the seller or seller's agent to deposit the funds into the trust within 10 business days after execution of the contract. Requires the contract to state that the seller is responsible and liable for the competency and veracity of the agent. Provides that an agent acting on behalf of a seller must be properly authorized to do so. Requires an agent to provide to the purchaser a written statement containing: (i) the capacity of the agent to act and whether the agent is acting for the seller as an agent; and (ii) notice that the seller is the only person or entity authorized to provide the services or merchandise called for by the contract. Provides that a seller may not be an affiliate, a parent company, or subsidiary organization of the trustee acting as a fiduciary of a trust to hold consideration paid for services or merchandise subject to a pre-need contract by the seller or seller's agent and a purchaser. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2019-03-29 - Rule 19(a) / Re-referred to Rules Committee [HB3353 Detail]

Download: Illinois-2019-HB3353-Introduced.html

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101ST GENERAL ASSEMBLY State of Illinois 2019 and 2020 HB3353 Introduced , by Rep. Linda Chapa LaVia SYNOPSIS AS INTRODUCED:
225 ILCS 45/1a from Ch. 111 1/2, par. 73.101a
225 ILCS 45/1a-1
225 ILCS 45/1c new
Amends the Illinois Funeral or Burial Funds Act. Defines "agent". Requires that pre-need contracts include the telephone number for the principal office of the seller and the parent company of the seller, if any. Requires that a pre-need contract is ratified within 10 business days by a licensed funeral director who is employed by the licensed funeral home firm responsible for providing the funeral goods and services. If the pre-need contract is funded by a trust, requires the seller or seller's agent to deposit the funds into the trust within 10 business days after execution of the contract. Requires the contract to state that the seller is responsible and liable for the competency and veracity of the agent. Provides that an agent acting on behalf of a seller must be properly authorized to do so. Requires an agent to provide to the purchaser a written statement containing: (i) the capacity of the agent to act and whether the agent is acting for the seller as an agent; and (ii) notice that the seller is the only person or entity authorized to provide the services or merchandise called for by the contract. Provides that a seller may not be an affiliate, a parent company, or subsidiary organization of the trustee acting as a fiduciary of a trust to hold consideration paid for services or merchandise subject to a pre-need contract by the seller or seller's agent and a purchaser. Effective immediately.
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A BILL FOR
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AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Funeral or Burial Funds Act is
amended by changing Sections 1a and 1a-1 and by adding Section
1c as follows:
(225 ILCS 45/1a) (from Ch. 111 1/2, par. 73.101a)
Sec. 1a. For the purposes of this Act, the following terms
shall have the meanings specified, unless the context clearly
requires another meaning:
"Agent" means a person authorized by a seller to offer,
sell, or solicit the sale of a pre-need sales contract on
behalf of the seller and includes an employee or independent
contractor of the seller.
"Beneficiary" means the person specified in the pre-need
contract upon whose death funeral services or merchandise shall
be provided or delivered.
"Licensee" means a seller of a pre-need contract who has
been licensed by the Comptroller under this Act.
"Outer burial container" means any container made of
concrete, steel, wood, fiberglass or similar material, used
solely at the interment site, and designed and used exclusively
to surround or enclose a separate casket and to support the

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earth above such casket, commonly known as a burial vault,
grave box or grave liner, but not including a lawn crypt as
defined in the Illinois Pre-need Cemetery Sales Act.
"Parent company" means a corporation owning more than 12
cemeteries or funeral homes in more than one state.
"Person" means any person, partnership, association,
corporation, or other entity.
"Pre-need contract" means any agreement or contract, or any
series or combination of agreements or contracts, whether
funded by trust deposits or life insurance policies or
annuities, which has for a purpose the furnishing or
performance of funeral services or the furnishing or delivery
of any personal property, merchandise, or services of any
nature in connection with the final disposition of a dead human
body. Nothing in this Act is intended to regulate the content
of a life insurance policy or a tax-deferred annuity.
"Provider" means a person who is obligated for furnishing
or performing funeral services or the furnishing or delivery of
any personal property, merchandise, or services of any nature
in connection with the final disposition of a dead human body.
"Purchaser" means the person who originally paid the money
under or in connection with a pre-need contract.
"Sales proceeds" means the entire amount paid to a seller,
exclusive of sales taxes paid by the seller, finance charges
paid by the purchaser, and credit life, accident or disability
insurance premiums, upon any agreement or contract, or series

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or combination of agreements or contracts, for the purpose of
performing funeral services or furnishing personal property,
merchandise, or services of any nature in connection with the
final disposition of a dead human body, including, but not
limited to, the retail price paid for such services and
personal property and merchandise.
"Purchase price" means sales proceeds less finance charges
on retail installment contracts.
"Seller" means the person who sells or offers to sell the
pre-need contract to a purchaser, whether funded by a trust
agreement, life insurance policy, or tax-deferred annuity.
"Trustee" means a person authorized to hold funds under
this Act.
(Source: P.A. 92-419, eff. 1-1-02.)
(225 ILCS 45/1a-1)
Sec. 1a-1. Pre-need contracts.
(a) It shall be unlawful for any seller doing business
within this State to accept sales proceeds from a purchaser,
either directly or indirectly by any means, unless the seller
or seller's agent enters into a pre-need contract with the
purchaser which meets the following requirements:
(1) It states the name, and address, and telephone
number of the principal office of the seller and the parent
company of the seller, if any.
(1.3) The contract is ratified within 10 business days

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by a licensed funeral director who is employed, at the time
the contract is drafted, by the licensed funeral home firm
responsible for providing the funeral goods and services.
(1.5) If funded by a trust, it clearly identifies the
trustee's name and address and the primary state or federal
regulator of the trustee as a corporate fiduciary and the
seller or seller's agent deposits the funds into the trust
or trusts within 10 business days after execution of the
contract.
(1.7) If funded by life insurance, it clearly
identifies the life insurance provider and the primary
regulator of the life insurance provider.
(2) It clearly identifies the provider's name and
address, the purchaser, and the beneficiary, if other than
the purchaser.
(2.5) If the provider has branch locations, the
contract gives the purchaser the opportunity to identify
the branch at which the funeral will be provided.
(3) It contains a complete description of the funeral
merchandise and services to be provided and the price of
the merchandise and services, and it clearly discloses
whether the price of the merchandise and services is
guaranteed or not guaranteed as to price.
(A) Each guaranteed price contract shall contain
the following statement in 12 point bold type:
THIS CONTRACT GUARANTEES THE BENEFICIARY THE

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SPECIFIC GOODS AND SERVICES CONTRACTED FOR. NO
ADDITIONAL CHARGES MAY BE REQUIRED. FOR DESIGNATED
GOODS AND SERVICES, ADDITIONAL CHARGES MAY BE INCURRED
FOR UNEXPECTED EXPENSES INCLUDING, BUT NOT LIMITED TO,
CASH ADVANCES, SHIPPING OF REMAINS FROM A DISTANT
PLACE, OR DESIGNATED HONORARIA ORDERED OR DIRECTED BY
SURVIVORS.
(B) Except as provided in subparagraph (C) of this
paragraph (3), each non-guaranteed price contract
shall contain the following statement in 12 point bold
type:
THIS CONTRACT DOES NOT GUARANTEE THE PRICE THE
BENEFICIARY WILL PAY FOR ANY SPECIFIC GOODS OR
SERVICES. ANY FUNDS PAID UNDER THIS CONTRACT ARE ONLY A
DEPOSIT TO BE APPLIED TOWARD THE FINAL PRICE OF THE
GOODS OR SERVICES CONTRACTED FOR. ADDITIONAL CHARGES
MAY BE REQUIRED.
(C) If a non-guaranteed price contract may
subsequently become guaranteed, the contract shall
clearly disclose the nature of the guarantee and the
time, occurrence, or event upon which the contract
shall become a guaranteed price contract.
(4) It provides that if the particular supplies and
services specified in the pre-need contract are
unavailable at the time of delivery, the provider shall be
required to furnish supplies and services similar in style

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and at least equal in quality of material and workmanship.
(5) It discloses any penalties or restrictions,
including but not limited to geographic restrictions or the
inability of the provider to perform, on the delivery of
merchandise, services, or pre-need contract guarantees.
(6) Regardless of the method of funding the pre-need
contract, the following must be disclosed:
(A) Whether the pre-need contract is to be funded
by a trust, life insurance, or an annuity;
(B) The nature of the relationship among the person
funding the pre-need contract, the provider, and the
seller; and
(C) The impact on the pre-need contract of (i) any
changes in the funding arrangement including but not
limited to changes in the assignment, beneficiary
designation, or use of the funds; (ii) any specific
penalties to be incurred by the contract purchaser as a
result of failure to make payments; (iii) penalties to
be incurred or moneys or refunds to be received as a
result of cancellations; and (iv) all relevant
information concerning what occurs and whether any
entitlements or obligations arise if there is a
difference between the proceeds of the particular
funding arrangement and the amount actually needed to
pay for the funeral at-need.
(D) The method of changing the provider.

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(7) The contract states that the seller is responsible
and liable for the veracity and competency of the agent.
(8) An agent acting on behalf of a seller must be properly
authorized to act as an agent for the seller as required under
this Act.
(9) An agent must provide to the purchaser a written
statement containing:
(A) The capacity of the agent to act and whether the
agent is acting for the seller as an agent; and
(B) notice that the seller is the only person or entity
authorized to provide the services or merchandise called
for by the contract.
(b) All pre-need contracts are subject to the Federal Trade
Commission Rule concerning the Cooling-Off Period for
Door-to-Door Sales (16 CFR Part 429).
(c) No pre-need contract shall be sold in this State unless
there is a provider for the services and personal property
being sold. If the seller is not a provider, then the seller
must have a binding agreement with a provider, and the identity
of the provider and the nature of the agreement between the
seller and the provider shall be disclosed in the pre-need
contract at the time of the sale and before the receipt of any
sales proceeds. The failure to disclose the identity of the
provider, the nature of the agreement between the seller and
the provider, or any changes thereto to the purchaser and
beneficiary, or the failure to make the disclosures required in

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subdivision (a)(1), constitutes an intentional violation of
this Act.
(d) All pre-need contracts must be in writing in at least
11 point type, numbered, and executed in duplicate. A signed
copy of the pre-need contract must be provided to the purchaser
at the time of entry into the pre-need contract. The
Comptroller may by rule develop a model pre-need contract form
that meets the requirements of this Act.
(e) The State Comptroller shall by rule develop a booklet
for consumers in plain English describing the scope,
application, and consumer protections of this Act. After the
adoption of these rules, no pre-need contract shall be sold in
this State unless (i) the seller distributes to the purchaser
prior to the sale a booklet promulgated or approved for use by
the State Comptroller; (ii) the seller explains to the
purchaser the terms of the pre-need contract prior to the
purchaser signing; and (iii) the purchaser initials a statement
in the contract confirming that the seller has explained the
terms of the contract prior to the purchaser signing.
(f) All sales proceeds received in connection with a
pre-need contract shall be deposited into a trust account as
provided in Section 1b and Section 2 of this Act, or shall be
used to purchase a life insurance policy or tax-deferred
annuity as provided in Section 2a of this Act.
(g) No pre-need contract shall be sold in this State unless
it is accompanied by a funding mechanism permitted under this

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Act, and unless the seller is licensed by the Comptroller as
provided in Section 3 of this Act. Nothing in this Act is
intended to relieve sellers of pre-need contracts from being
licensed under any other Act required for their profession or
business, and being subject to the rules promulgated to
regulate their profession or business, including rules on
solicitation and advertisement.
(Source: P.A. 96-879, eff. 2-2-10.)
(225 ILCS 45/1c new)
Sec. 1c. Prohibited relationships between sellers and
trustees. A seller may not be an affiliate, a parent company,
or a subsidiary organization of the trustee acting as a
fiduciary of a trust to hold consideration paid for services or
merchandise subject to a contract entered into under this Act
by the seller or seller's agent and a purchaser.
Section 99. Effective date. This Act takes effect upon
becoming law.