Bill Text: IL HB5810 | 2013-2014 | 98th General Assembly | Introduced

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Bill Title: Amends the Illinois Funeral or Burial Funds Act. Provides that, at the time of payment, a provider shall inform the purchaser of all the possible funding arrangements for a pre-need contract, including the distinctions between the financial results of funding the contract through a trust fund, Totten trust, annuity, or life insurance policy. Further provides that, at the time of payment, a provider shall make the purchaser aware of who the pre-need contract designates as the beneficiary.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2014-12-03 - Session Sine Die [HB5810 Detail]

Download: Illinois-2013-HB5810-Introduced.html

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98TH GENERAL ASSEMBLY State of Illinois 2013 and 2014 HB5810 Introduced , by Rep. Dan Brady SYNOPSIS AS INTRODUCED:
225 ILCS 45/1a-1
Amends the Illinois Funeral or Burial Funds Act. Provides that, at the time of payment, a provider shall inform the purchaser of all the possible funding arrangements for a pre-need contract, including the distinctions between the financial results of funding the contract through a trust fund, Totten trust, annuity, or life insurance policy. Further provides that, at the time of payment, a provider shall make the purchaser aware of who the pre-need contract designates as the beneficiary.
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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 Section 1a-1 as follows:
(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
enters into a pre-need contract with the purchaser which meets
the following requirements:
(1) It states the name and address of the principal
office of the seller and the parent company of the seller,
if any.
(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.
(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

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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
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

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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
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

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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.
(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.
(h) A provider shall, at the time of payment, inform the
purchaser of all the possible funding arrangements for a
pre-need contract, including the distinctions between the
financial results of funding the contract through a trust fund,
Totten trust, annuity, or life insurance policy. The provider
shall, at the time of payment, make the purchaser aware of who
the pre-need contract designates as the beneficiary.
(Source: P.A. 96-879, eff. 2-2-10.)