Bill Text: IL HB6078 | 2009-2010 | 96th General Assembly | Introduced

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Bill Title: Amends the Illinois Funeral or Burial Funds Act and the Illinois Pre-Need Cemetery Sales Act to transfer all authority given to the Comptroller under the Acts to the Department of Financial and Professional Regulation. Replaces all references to "Comptroller" with "Department". Effective immediately.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2010-02-11 - Referred to Rules Committee [HB6078 Detail]

Download: Illinois-2009-HB6078-Introduced.html

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96TH GENERAL ASSEMBLY State of Illinois 2009 and 2010 HB6078 Introduced 2/11/2010, by Rep. Dan Brady SYNOPSIS AS INTRODUCED:
See Index
Amends the Illinois Funeral or Burial Funds Act and the Illinois Pre-Need Cemetery Sales Act to transfer all authority given to the Comptroller under the Acts to the Department of Financial and Professional Regulation. Replaces all references to "Comptroller" with "Department". Effective immediately.
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FISCAL NOTE ACT MAY APPLY
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, 1a-1, 1a-2, 2, 3, 3a, 3a-5,
3b, 3c, 3d, 3e, 3f, 4a, 7.2, 7.3, 8, and 8.1 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:
"Beneficiary" means the person specified in the pre-need
contract upon whose death funeral services or merchandise shall
be provided or delivered.
"Department" means the Department of Financial and
Professional Regulation.
"Licensee" means a seller of a pre-need contract who has
been licensed by the Department 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
earth above such casket, commonly known as a burial vault,
grave box or grave liner, but not including a lawn crypt as

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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
or combination of agreements or contracts, for the purpose of
performing funeral services or furnishing personal property,

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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
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.

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(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
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

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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
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;

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(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.
(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

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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
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 Department
Comptroller may by rule develop a model pre-need contract form
that meets the requirements of this Act.
(e) The Department 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 Department 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

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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
Act, and unless the seller is licensed by the Department
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 45/1a-2)
Sec. 1a-2. Pre-Need Funeral Consumer Protection Fund.
(a) Each licensee shall pay a fee of $5 out of the funds
received for each pre-need contract sold and shall forward this
sum to the Department Comptroller semi-annually within 30 days
of the end of June and December. Fees collected under this
Section shall be deposited into the Pre-need Funeral Consumer
Protection Fund, which is hereby created as a special fund in
the State treasury. Moneys in the Fund may be expended for the
purposes specified in subsection (b) and to purchase insurance
to cover losses guaranteed by the Fund.
(b) In the event that the purchaser is unable to receive

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the benefits of his or her pre-need contract or to receive the
funds due by reason of cancellation of the contract, the
purchaser may apply to the Department Comptroller on a form
prescribed by the Department Comptroller for restitution from
the Pre-need Funeral Consumer Protection Fund. Upon a finding
by the Department Comptroller that the benefits or return of
payment is not available to the purchaser, the Department
Comptroller may cause restitution to be paid to the purchaser
from the Pre-need Funeral Consumer Protection Fund.
(c) In all such cases where a purchaser is paid restitution
from the Fund, the Department Comptroller shall be subrogated
to that purchaser's claims against the licensee for all amounts
paid from the Fund. If the licensee's liability for default is
subsequently proven, any award made by a court of law shall be
made payable to the Pre-need Funeral Consumer Protection Fund
up to the amount paid to the purchaser from the Fund and the
Department Comptroller shall request that the Attorney General
engage in all reasonable post-judgment collection steps to
collect such claims from the judgment debtor and reimburse the
Fund.
(d) The Fund shall not be applied toward any restitution
for losses in any lawsuit initiated by the Attorney General or
Department Comptroller or with respect to any claim made on a
pre-need contract that occurred prior to the effective date of
this amendatory Act of the 96th General Assembly.
(e) Notwithstanding any other provision of this Section,

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the payment of restitution from the Fund shall be a matter of
grace and not of right and no purchaser shall have any vested
right in the Fund as a beneficiary or otherwise.
(f) The Fund may not be allocated for any purpose other
than that specified in this Act.
(Source: P.A. 96-879, eff. 2-2-10.)
(225 ILCS 45/2) (from Ch. 111 1/2, par. 73.102)
Sec. 2. (a) If a purchaser selects a trust arrangement to
fund the pre-need contract, all trust deposits as determined by
Section 1b shall be made within 30 days of receipt.
(b) A trust established under this Act must be maintained
with a corporate fiduciary as defined in Section 1-5.05 of the
Corporate Fiduciary Act.
(c) Trust agreements and amendments to the trust agreements
used to fund a pre-need contract shall be filed with the
Department Comptroller.
(d) (Blank).
(e) A seller or provider shall furnish to the trustee and
depositary the name of each payor and the amount of payment on
each such account for which deposit is being so made. Nothing
shall prevent the trustee from commingling the deposits in any
such trust fund for purposes of its management and the
investment of its funds as provided in the Common Trust Fund
Act. In addition, multiple trust funds maintained under this
Act may be commingled or commingled with other funeral or

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burial related trust funds if all record keeping requirements
imposed by law are met.
(f) (Blank).
(g) Upon no less than 30 days prior notice to the
Department Comptroller, the seller may change the trustee of
the fund. Failure to provide the Department Comptroller with
timely prior notice is an intentional violation of this Act.
(h) A trustee shall at least annually furnish to each
purchaser a statement containing: (1) the receipts,
disbursements, and inventory of the trust, including an
explanation of any fees or expenses charged by the trustee
under Section 5 of this Act or otherwise, (2) an explanation of
the purchaser's right to a refund, if any, under this Act, and
(3) identifying the primary regulator of the trust as a
corporate fiduciary under state or federal law.
(Source: P.A. 96-879, eff. 2-2-10.)
(225 ILCS 45/3) (from Ch. 111 1/2, par. 73.103)
Sec. 3. Licensing.
(a) No person, firm, partnership, association or
corporation may act as seller without first securing from the
Department State Comptroller a license to so act. Application
for such license shall be in writing, signed by the applicant
and duly verified on forms furnished by the Department
Comptroller. Each application shall contain at least the
following:

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(1) The full name and address (both residence and place
of business) of the applicant, and every member, officer
and director thereof if the applicant is a firm,
partnership, association, or corporation, and of every
shareholder holding more than 10% of the corporate stock if
the applicant is a corporation;
(2) A statement of the applicant's assets and
liabilities;
(3) The name and address of the applicant's principal
place of business at which the books, accounts, and records
shall be available for examination by the Department
Comptroller as required by this Act;
(4) The names and addresses of the applicant's branch
locations at which pre-need sales shall be conducted and
which shall operate under the same license number as the
applicant's principal place of business;
(5) For each individual listed under item (1) above, a
detailed statement of the individual's business experience
for the 10 years immediately preceding the application; any
present or prior connection between the individual and any
other person engaged in pre-need sales; any felony or
misdemeanor convictions for which fraud was an essential
element; any charges or complaints lodged against the
individual for which fraud was an essential element and
which resulted in civil or criminal litigation; any failure
of the individual to satisfy an enforceable judgment

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entered against him based upon fraud; and any other
information requested by the Department Comptroller
relating to past business practices of the individual.
Since the information required by this item (5) may be
confidential or contain proprietary information, this
information shall not be available to other licensees or
the general public and shall be used only for the lawful
purposes of the Department Comptroller in enforcing this
Act;
(6) The name of the trustee and, if applicable, the
names of the advisors to the trustee, including a copy of
the proposed trust agreement under which the trust funds
are to be held as required by this Act; and
(7) Such other information as the Department
Comptroller may reasonably require in order to determine
the qualification of the applicant to be licensed under
this Act.
(b) Applications for license shall be accompanied by a
fidelity bond executed by the applicant and a surety company
authorized to do business in this State or an irrevocable,
unconditional letter of credit issued by a bank, credit union,
or trust company authorized to do business in the State of
Illinois, as approved by the Department State Comptroller, in
such amount not exceeding $10,000 as the Department Comptroller
may require. If, after notice and an opportunity to be heard,
it has been determined that a licensee has violated this Act

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within the past 5 calendar years, the Department Comptroller
may require an additional bond or letter of credit from the
licensee from time to time in amounts equal to one-tenth of
such trust funds, which bond or letter of credit shall run to
the Department Comptroller for the use and benefit of the
beneficiaries of such trust funds.
The licensee shall keep accurate accounts, books and
records in this State, at the principal place of business
identified in the licensee's license application or as
otherwise approved by the Department Comptroller in writing, of
all transactions, copies of all pre-need contracts, trust
agreements, and other agreements, dates and amounts of payments
made and accepted thereon, the names and addresses of the
contracting parties, the persons for whose benefit such funds
are accepted, and the names of the depositaries of such funds.
Each licensee shall maintain the documentation for a period of
3 years after the licensee has fulfilled his obligations under
the pre-need contract. Additionally, for a period not to exceed
6 months after the performance of all terms in a pre-need sales
contract, the licensee shall maintain copies of the contract at
the licensee branch location where the contract was entered or
at some other location agreed to by the Department Comptroller
in writing. If an insurance policy or tax-deferred annuity is
used to fund the pre-need contract, the licensee under this Act
shall keep and maintain accurate accounts, books, and records
in this State, at the principal place of business identified in

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the licensee's application or as otherwise approved by the
Department Comptroller in writing, of all insurance policies
and tax-deferred annuities used to fund the pre-need contract,
the name and address of insured, annuitant, and initial
beneficiary, and the name and address of the insurance company
issuing the policy or annuity. If a life insurance policy or
tax-deferred annuity is used to fund a pre-need contract, the
licensee shall notify the insurance company of the name of each
pre-need contract purchaser and the amount of each payment when
the pre-need contract, insurance policy or annuity is
purchased.
The licensee shall make reports to the Department
Comptroller annually or at such other time as the Department
Comptroller may require, on forms furnished by the Department
Comptroller. The licensee shall file the annual report with the
Department Comptroller within 75 days after the end of the
licensee's fiscal year. The Department Comptroller shall for
good cause shown grant an extension for the filing of the
annual report upon the written request of the licensee. Such
extension shall not exceed 60 days. If a licensee fails to
submit an annual report to the Department Comptroller within
the time specified in this Section, the Department Comptroller
shall impose upon the licensee a penalty of $5 for each and
every day the licensee remains delinquent in submitting the
annual report. The Department Comptroller may abate all or part
of the $5 daily penalty for good cause shown. Every application

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shall be accompanied by a check or money order in the amount of
$25 and every report shall be accompanied by a check or money
order in the amount of $10 payable to: the Illinois Department
of Financial and Professional Regulation Comptroller, State of
Illinois.
The licensee shall make all required books and records
pertaining to trust funds, insurance policies, or tax-deferred
annuities available to the Department Comptroller for
examination. The Department Comptroller, or a person
designated by the Department Comptroller who is trained to
perform such examinations, may at any time investigate the
books, records and accounts of the licensee with respect to
trust funds, insurance policies, or tax-deferred annuities and
for that purpose may require the attendance of and examine
under oath all persons whose testimony he may require. The
licensee shall pay a fee for such examination in accordance
with a schedule established by the Department Comptroller. The
fee shall not exceed the cost of such examination. For pre-need
contracts funded by trust arrangements, the cost of an initial
examination shall be borne by the licensee if it has $10,000 or
more in trust funds, otherwise, by the Department Comptroller.
The charge made by the Department Comptroller for an
examination shall be based upon the total amount of trust funds
held by the licensee at the end of the calendar or fiscal year
for which the report is required by this Act and shall be in
accordance with the following schedule:

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Less than $10,000.................................no charge;
$10,000 or more but less than $50,000...................$10;
$50,000 or more but less than $100,000..................$40;
$100,000 or more but less than $250,000.................$80;
$250,000 or more........................................$100.
The Department Comptroller may order additional audits or
examinations as he or she may deem necessary or advisable to
ensure the safety and stability of the trust funds and to
ensure compliance with this Act. These additional audits or
examinations shall only be made after good cause is established
by the Department Comptroller in the written order. The grounds
for ordering these additional audits or examinations may
include, but shall not be limited to:
(1) material and unverified changes or fluctuations in
trust balances or insurance or annuity policy amounts;
(2) the licensee changing trustees more than twice in
any 12-month period;
(3) any withdrawals or attempted withdrawals from the
trusts, insurance policies, or annuity contracts in
violation of this Act; or
(4) failure to maintain or produce documentation
required by this Act for deposits into trust accounts,
trust investment activities, or life insurance or annuity
policies.
The licensee shall bear the full cost of that examination
or audit, up to a maximum of $20,000. The Department

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Comptroller may elect to pay for the examination or audit and
receive reimbursement from the licensee. Payment of the costs
of the examination or audit by a licensee shall be a condition
of receiving, maintaining, or renewing a license under this
Act. All moneys received by the Department Comptroller for
examination or audit fees shall be maintained in a separate
account to be known as the Department's Comptroller's
Administrative Fund. This Fund, subject to appropriation by the
General Assembly, may be utilized by the Department Comptroller
for enforcing this Act and other purposes that may be
authorized by law.
For pre-need contracts funded by life insurance or a
tax-deferred annuity, the cost of an examination shall be borne
by the licensee. The fee schedule for such examination shall be
established in rules promulgated by the Department
Comptroller. In the event such investigation or other
information received by the Department Comptroller discloses a
substantial violation of the requirements of this Act, the
Department Comptroller shall revoke the license of such person
upon a hearing as provided in this Act. Such licensee may
terminate all further responsibility for compliance with the
requirements of this Act by voluntarily surrendering the
license to the Department Comptroller, or in the event of its
loss, furnishing the Department Comptroller with a sworn
statement to that effect, which states the licensee's intention
to discontinue acceptance of funds received under pre-need

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contracts. Such license or statement must be accompanied by an
affidavit that said licensee has lawfully expended or refunded
all funds received under pre-need contracts, and that the
licensee will accept no additional sales proceeds. The
Department Comptroller shall immediately cancel or revoke said
license.
(Source: P.A. 96-879, eff. 2-2-10.)
(225 ILCS 45/3a) (from Ch. 111 1/2, par. 73.103a)
Sec. 3a. Denial, suspension, or revocation of license.
(a) The Department Comptroller may refuse to issue or may
suspend or revoke a license on any of the following grounds:
(1) The applicant or licensee has made any
misrepresentations or false statements or concealed any
material fact.
(2) The applicant or licensee is insolvent.
(3) The applicant or licensee has been engaged in
business practices that work a fraud.
(4) The applicant or licensee has refused to give
pertinent data to the Department Comptroller.
(5) The applicant or licensee has failed to satisfy any
enforceable judgment or decree rendered by any court of
competent jurisdiction against the applicant.
(6) The applicant or licensee has conducted or is about
to conduct business in a fraudulent manner.
(7) The trust agreement is not in compliance with State

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or federal law.
(8) The fidelity bond is not satisfactory to the
Department Comptroller.
(9) As to any individual required to be listed in the
license application, the individual has conducted or is
about to conduct any business on behalf of the applicant in
a fraudulent manner; has been convicted of any felony or
misdemeanor, an essential element of which is fraud; has
had a judgment rendered against him or her based on fraud
in any civil litigation; has failed to satisfy any
enforceable judgment or decree rendered against him or her
by any court of competent jurisdiction; or has been
convicted of any felony or any theft-related offense.
(10) The applicant or licensee, including any member,
officer, or director thereof if the applicant or licensee
is a firm, partnership, association or corporation and any
shareholder holding more than 10% of the corporate stock,
has violated any provision of this Act or any regulation,
decision, order, or finding made by the Department
Comptroller under this Act.
(11) The Department Comptroller finds any fact or
condition existing which, if it had existed at the time of
the original application for such license, would have
warranted the Department Comptroller in refusing the
issuance of the license.
(b) Before refusal to issue or renew and before suspension

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or revocation of a license, the Department Comptroller shall
hold a hearing to determine whether the applicant or licensee,
hereinafter referred to as the respondent, is entitled to hold
such a license. At least 10 days prior to the date set for such
hearing, the Department Comptroller shall notify the
respondent in writing that on the date designated a hearing
will be held to determine his eligibility for a license and
that he may appear in person or by counsel. Such written notice
may be served on the respondent personally, or by registered or
certified mail sent to the respondent's business address as
shown in his latest notification to the Department Comptroller.
At the hearing, both the respondent and the complainant shall
be accorded ample opportunity to present in person or by
counsel such statements, testimony, evidence and argument as
may be pertinent to the charges or to any defense thereto. The
Department Comptroller may reasonably continue such hearing
from time to time.
The Department Comptroller may subpoena any person or
persons in this State and take testimony orally, by deposition
or by exhibit, in the same manner and with the same fees and
mileage allowances as prescribed in judicial proceedings in
civil cases.
Any authorized agent of the Department Comptroller may
administer oaths to witnesses at any hearing which the
Department Comptroller is authorized to conduct.
(Source: P.A. 92-419, eff. 1-1-02.)

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(225 ILCS 45/3a-5)
Sec. 3a-5. License requirements.
(a) Every license issued by the Department Comptroller
shall state the number of the license, the business name and
address of the licensee's principal place of business, each
branch location also operating under the license, and the
licensee's parent company, if any. The license shall be
conspicuously posted in each place of business operating under
the license. The Department Comptroller may issue such
additional licenses as may be necessary for licensee branch
locations upon compliance with the provisions of this Act
governing an original issuance of a license for each new
license.
(b) Individual salespersons representing a licensee shall
not be required to obtain licenses in their individual
capacities, but must acknowledge, by affidavit, that they have
been provided with a copy of and have read this Act. The
licensee shall retain copies of the affidavits of its sellers
for its records and shall make the affidavits available to the
Department Comptroller for examination upon request.
(c) The licensee shall be responsible for the activities of
any person representing the licensee in selling or offering a
pre-need contract for sale.
(d) Any person not selling on behalf of a licensee shall
obtain its own license.

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(e) No license shall be transferable or assignable without
the express written consent of the Department Comptroller. A
transfer of more than 50% of the ownership of any business
licensed hereunder shall be deemed to be an attempted
assignment of the license originally issued to the licensee for
which consent of the Department Comptroller shall be required.
(f) Every license issued hereunder shall remain in force
until it has been suspended, surrendered, or revoked in
accordance with this Act. The Department Comptroller, upon the
request of an interested person or on his own motion, may issue
new licenses to a licensee whose license or licenses have been
revoked, if no factor or condition then exists which would have
warranted the Department Comptroller to originally refuse the
issuance of such license.
(Source: P.A. 92-419, eff. 1-1-02.)
(225 ILCS 45/3b) (from Ch. 111 1/2, par. 73.103b)
Sec. 3b. The Department Comptroller, at his expense, shall
provide a certified shorthand reporter to take down the
testimony and preserve a record of all proceedings at the
hearing of any case involving the refusal to issue or renew a
license, the suspension or revocation of a license, the
imposition of a monetary penalty, or the referral of a case for
criminal prosecution. The record of any such proceeding shall
consist of the notice of hearing, complaint, all other
documents in the nature of pleadings and written motions filed

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in the proceedings, the transcript of testimony and the report
and orders of the Department Comptroller. Copies of the
transcript of such record may be purchased from the certified
shorthand reporter who prepared the record.
(Source: P.A. 84-839.)
(225 ILCS 45/3c) (from Ch. 111 1/2, par. 73.103c)
Sec. 3c. Any circuit court may, upon application of the
Department Comptroller or of the applicant or licensee against
whom proceedings under Section 3a are pending, enter an order
requiring witnesses to attend and testify, and requiring the
production of documents, papers, files, books and records in
connection with any hearing in any proceedings under that
Section. Failure to obey such court order may result in the
institution of contempt proceedings.
(Source: P.A. 84-839.)
(225 ILCS 45/3d) (from Ch. 111 1/2, par. 73.103d)
Sec. 3d. Any person affected by a final administrative
decision of the Department Comptroller may have such decision
reviewed judicially by the circuit court of the county where
such person resides, or in the case of a corporation, where the
registered office is located. If the plaintiff in the review
proceeding is not a resident of this State, venue shall be in
Sangamon County. The provisions of the Administrative Review
Law, as now or hereafter amended, and any rules adopted

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thereunder shall govern all proceedings for the judicial review
of final administrative decisions of the Department
Comptroller. The term "administrative decision" is defined as
in the Administrative Review Law.
The Department Comptroller is not required to certify the
record of the proceeding unless the plaintiff in the review
proceedings has purchased a copy of the transcript from the
certified shorthand reporter who prepared the record. Exhibits
shall be certified without cost.
(Source: P.A. 84-839.)
(225 ILCS 45/3e) (from Ch. 111 1/2, par. 73.103e)
Sec. 3e. Upon the revocation of, suspension of, or refusal
to renew any license, the licensee shall immediately surrender
the license or licenses to the Department Comptroller. If the
licensee fails to do so, the Department Comptroller shall have
the right to seize the same.
(Source: P.A. 92-419, eff. 1-1-02.)
(225 ILCS 45/3f)
Sec. 3f. Revocation of license.
(a) The Department Comptroller, upon determination that
grounds exist for the revocation or suspension of a license
issued under this Act, may revoke or suspend, if appropriate,
the license issued to a licensee or to a particular branch
office location with respect to which the grounds for

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revocation or suspension may occur or exist.
(b) Whenever a license is revoked by the Department
Comptroller, he or she shall apply to the Circuit Court of the
county wherein the licensee is located for a receiver to
administer the trust funds of the licensee or to maintain the
life insurance policies and tax-deferred annuities held by the
licensee under a pre-need contract.
(Source: P.A. 92-419, eff. 1-1-02.)
(225 ILCS 45/4a)
Sec. 4a. Investment of funds.
(a) A trustee has a duty to invest and manage the trust
assets pursuant to the Prudent Investor Rule under the Trusts
and Trustees Act.
(b) The trust shall be a single-purpose trust fund. In the
event of the seller's bankruptcy, insolvency or assignment for
the benefit of creditors, or an adverse judgment, the trust
funds shall not be available to any creditor as assets of the
seller or to pay any expenses of any bankruptcy or similar
proceeding, but shall be distributed to the purchasers or
managed for their benefit by the trustee holding the funds.
Except in an action by the Department Comptroller to revoke a
license issued pursuant to this Act and for creation of a
receivership as provided in this Act, the trust shall not be
subject to judgment, execution, garnishment, attachment, or
other seizure by process in bankruptcy or otherwise, nor to

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sale, pledge, mortgage, or other alienation, and shall not be
assignable except as approved by the Department Comptroller.
The changes made by Public Act 91-7 are intended to clarify
existing law regarding the inability of licensees to pledge the
trust.
(c) Because it is not known at the time of deposit or at
the time that income is earned on the trust account to whom the
principal and the accumulated earnings will be distributed for
the purpose of determining the Illinois income tax due on these
trust funds, the principal and any accrued earnings or losses
related to each individual account shall be held in suspense
until the final determination is made as to whom the account
shall be paid. The beneficiary's estate shall not be
responsible for any funeral and burial purchases listed in a
pre-need contract if the pre-need contract is entered into on a
guaranteed price basis.
If a pre-need contract is not a guaranteed price contract,
then to the extent the proceeds of a non-guaranteed price
pre-need contract cover the funeral and burial expenses for the
beneficiary, no claim may be made against the estate of the
beneficiary. A claim may be made against the beneficiary's
estate if the charges for the funeral services and merchandise
at the time of use exceed the amount of the amount in trust
plus the percentage of the sale proceeds initially retained by
the seller or the face value of the life insurance policy or
tax-deferred annuity.

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(Source: P.A. 96-879, eff. 2-2-10.)
(225 ILCS 45/7.2)
Sec. 7.2. Investigation of unlawful practices. If it
appears to the Department Comptroller that a person has engaged
in, is engaging in, or is about to engage in any practice in
violation of this Act, the Department Comptroller may:
(1) require that person to file on such terms as the
Department Comptroller prescribes a statement or report in
writing, under oath or otherwise, containing all
information the Department Comptroller may consider
necessary to ascertain whether a licensee is in compliance
with this Act, or whether an unlicensed person is engaging
in activities for which a license is required;
(2) examine under oath any person in connection with
the books and records pertaining to or having an impact
upon trust funds, insurance policies, or tax deferred
annuities required or allowed to be maintained pursuant to
this Act;
(3) examine any books and records of the licensee,
trustee, or investment advisor that the Department
Comptroller may consider necessary to ascertain compliance
with this Act; and
(4) require the production of a copy of any record,
book, document, account, or paper that is produced in
accordance with this Act and retain it in his or her

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possession until the completion of all proceedings in
connection with which it is produced.
(Source: P.A. 92-419, eff. 1-1-02.)
(225 ILCS 45/7.3)
Sec. 7.3. Service. Service by the Department Comptroller of
any notice requiring a person to file a statement or report
shall be made:
(1) personally by delivery of a duly executed copy
thereof to the person to be served or, if that person is
not a natural person, in the manner provided in the Civil
Practice Law when a complaint is filed; or
(2) by mailing by certified mail a duly executed copy
thereof to the person to be served at his or her last known
abode or principal place of business within this State.
(Source: P.A. 89-615, eff. 8-9-96.)
(225 ILCS 45/8) (from Ch. 111 1/2, par. 73.108)
Sec. 8. Any person who intentionally fails to deposit the
required sales proceeds into a trust required under this Act,
intentionally and improperly withdraws or uses trust funds for
his or her own benefit, or otherwise intentionally violates any
provision of this Act is guilty of a Class 4 felony.
If any person intentionally violates this Act or fails or
refuses to comply with any order of the Department Comptroller
or any part of an order that has become final to the person and

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is still in effect, the Department Comptroller may, after
notice and hearing at which it is determined that a violation
of this Act or the order has been committed, further order that
the person shall forfeit and pay to the State of Illinois a sum
not to exceed $5,000 for each violation. This liability shall
be enforced in an action brought in any court of competent
jurisdiction by the Department Comptroller in the name of the
People of the State of Illinois.
In addition to the other penalties and remedies provided in
this Act, the Department Comptroller may bring a civil action
in the county of residence of the licensee or any person
accepting trust funds to enjoin any violation or threatened
violation of this Act.
The powers vested in the Department Comptroller by this
Section are in addition to any and all other powers and
remedies vested in the Department Comptroller by law.
(Source: P.A. 92-419, eff. 1-1-02.)
(225 ILCS 45/8.1)
Sec. 8.1. Sales; liability of purchaser for shortage. In
the event of a sale or transfer of all or substantially all of
the assets of the licensee, the sale or transfer of the
controlling interest of the corporate stock of the licensee if
the licensee is a corporation, the sale or transfer of the
controlling interest of the partnership if the licensee is a
partnership, or the sale of the licensee pursuant to

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foreclosure proceedings, the purchaser is liable for any
shortages existing before or after the sale in the trust funds
required to be maintained in a trust pursuant to this Act and
shall honor all pre-need contracts and trusts entered into by
the licensee. Any shortages existing in the trust funds
constitute a prior lien in favor of the trust for the total
value of the shortages, and notice of that lien shall be
provided in all sales instruments.
In the event of a sale or transfer of all or substantially
all of the assets of the licensee, the sale or transfer of the
controlling interest of the corporate stock of the licensee if
the licensee is a corporation, or the sale or transfer of the
controlling interest of the partnership if the licensee is a
partnership, the licensee shall, at least 21 days prior to the
sale or transfer, notify the Department Comptroller, in
writing, of the pending date of sale or transfer so as to
permit the Department Comptroller to audit the books and
records of the licensee. The audit must be commenced within 10
business days of the receipt of the notification and completed
within the 21-day notification period unless the Department
Comptroller notifies the licensee during that period that there
is a basis for determining a deficiency which will require
additional time to finalize. Failure to provide timely notice
to the Department Comptroller under this Section shall be an
intentional violation of this Act. The sale or transfer may not
be completed by the licensee unless and until:

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(i) the Department Comptroller has completed the audit
of the licensee's books and records;
(ii) any delinquency existing in the trust funds has
been paid by the licensee, or arrangements satisfactory to
the Department Comptroller have been made by the licensee
on the sale or transfer for the payment of any delinquency;
and
(iii) the Department Comptroller issues a license upon
application of the new owner, which license must be applied
for within 21 days of the anticipated date of the sale or
transfer, subject to the payment of any delinquencies, if
any, as stated in item (ii).
For purposes of this Section, a person, firm, corporation,
partnership, or institution that acquires the licensee through
a real estate foreclosure shall be subject to the provisions of
this Section.
(Source: P.A. 96-879, eff. 2-2-10.)
Section 10. The Illinois Pre-Need Cemetery Sales Act is
amended by changing Sections 4, 5, 6, 7, 8, 8a, 8b, 9, 10, 11,
12, 13, 14, 15, 16, 18, 19, 20, 21, 23, 24, 27, and 27.1 as
follows:
(815 ILCS 390/4) (from Ch. 21, par. 204)
Sec. 4. Definitions. As used in this Act, the following
terms shall have the meaning specified:

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(A) "Pre-need sales contract" or "Pre-need sales" means any
agreement or contract or series or combination of agreements or
contracts which have for a purpose the sale of cemetery
merchandise, cemetery services or undeveloped interment,
entombment or inurnment spaces where the terms of such sale
require payment or payments to be made at a currently
determinable time and where the merchandise, services or
completed spaces are to be provided more than 120 days
following the initial payment on the account. An agreement or
contract for a memorial, marker, or monument shall not be
deemed a "pre-need sales contract" or a "pre-need sale" if the
memorial, marker, or monument is delivered within 180 days
following initial payment on the account and work thereon
commences a reasonably short time after initial payment on the
account.
(B) "Delivery" occurs when:
(1) Physical possession of the merchandise is
transferred or the easement for burial rights in a
completed space is executed, delivered and transferred to
the buyer; or
(2) Following authorization by a purchaser under a
pre-need sales contract, title to the merchandise has been
transferred to the buyer and the merchandise has been paid
for and is in the possession of the seller who has placed
it, until needed, at the site of its ultimate use; or
(3) Following authorization by a purchaser under a

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pre-need sales contract, the merchandise has been
permanently identified with the name of the buyer or the
beneficiary and delivered to a licensed and bonded
warehouse and both title to the merchandise and a warehouse
receipt have been delivered to the purchaser or beneficiary
and a copy of the warehouse receipt has been delivered to
the licensee for retention in its files; except that in the
case of outer burial containers, the use of a licensed and
bonded warehouse as set forth in this paragraph shall not
constitute delivery for purposes of this Act. Nothing
herein shall prevent a seller from perfecting a security
interest in accordance with the Uniform Commercial Code on
any merchandise covered under this Act.
All warehouse facilities to which sellers deliver
merchandise pursuant to this Act shall:
(i) be either located in the State of Illinois or
qualify as a foreign warehouse facility as defined
herein;
(ii) submit to the Department Comptroller not less
than annually, by March 1 of each year, a report of all
cemetery merchandise stored by each licensee under
this Act which is in storage on the date of the report;
(iii) permit the Department Comptroller or his
designee at any time to examine stored merchandise and
to examine any documents pertaining thereto;
(iv) submit evidence satisfactory to the

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Department Comptroller that all merchandise stored by
said warehouse for licensees under this Act is insured
for casualty or other loss normally assumed by a bailee
for hire;
(v) demonstrate to the Department Comptroller that
the warehouse has procured and is maintaining a
performance bond in the form, content and amount
sufficient to unconditionally guarantee to the
purchaser or beneficiary the prompt shipment of the
cemetery merchandise.
(C) "Cemetery merchandise" means items of personal
property normally sold by a cemetery authority not covered
under the Illinois Funeral or Burial Funds Act, including but
not limited to:
(1) memorials,
(2) markers,
(3) monuments,
(4) foundations, and
(5) outer burial containers.
(D) "Undeveloped interment, entombment or inurnment
spaces" or "undeveloped spaces" means any space to be used for
the reception of human remains that is not completely and
totally constructed at the time of initial payment therefor in
a:
(1) lawn crypt,
(2) mausoleum,

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(3) garden crypt,
(4) columbarium, or
(5) cemetery section.
(E) "Cemetery services" means those services customarily
performed by cemetery or crematory personnel in connection with
the interment, entombment, inurnment or cremation of a dead
human body.
(F) "Cemetery section" means a grouping of spaces intended
to be developed simultaneously for the purpose of interring
human remains.
(G) "Columbarium" means an arrangement of niches that may
be an entire building, a complete room, a series of special
indoor alcoves, a bank along a corridor or part of an outdoor
garden setting that is constructed of permanent material such
as bronze, marble, brick, stone or concrete for the inurnment
of human remains.
(G-5) "Department" means the Department of Financial and
Professional Regulation.
(H) "Lawn crypt" means a permanent underground crypt
usually constructed of reinforced concrete or similar material
installed in multiple units for the entombment of human
remains.
(I) "Mausoleum" or "garden crypt" means a grouping of
spaces constructed of reinforced concrete or similar material
constructed or assembled above the ground for entombing human
remains.

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(J) "Memorials, markers and monuments" means the object
usually comprised of a permanent material such as granite or
bronze used to identify and memorialize the deceased.
(K) "Foundations" means those items used to affix or
support a memorial or monument to the ground in connection with
the installation of a memorial, marker or monument.
(L) "Person" means an individual, corporation,
partnership, joint venture, business trust, voluntary
organization or any other form of entity.
(M) "Seller" means any person selling or offering for sale
cemetery merchandise, cemetery services or undeveloped
interment, entombment, or inurnment spaces in accordance with a
pre-need sales contract.
(N) "Religious cemetery" means a cemetery owned, operated,
controlled or managed by any recognized church, religious
society, association or denomination or by any cemetery
authority or any corporation administering, or through which is
administered, the temporalities of any recognized church,
religious society, association or denomination.
(O) "Municipal cemetery" means a cemetery owned, operated,
controlled or managed by any city, village, incorporated town,
township, county or other municipal corporation, political
subdivision, or instrumentality thereof authorized by law to
own, operate or manage a cemetery. "Municipal cemetery" also
includes a cemetery placed in receivership pursuant to this Act
while such cemetery is in receivership.

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(O-1) "Outer burial container" means a 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
earth above such casket, commonly known as a burial vault,
grave box, or grave liner, but not including a lawn crypt.
(P) "Sales price" means the gross amount paid by a
purchaser on a pre-need sales contract for cemetery
merchandise, cemetery services or undeveloped interment,
entombment or inurnment spaces, excluding sales taxes, credit
life insurance premiums, finance charges and Cemetery Care Act
contributions.
(Q) (Blank).
(R) "Provider" means a person who is responsible for
performing cemetery services or furnishing cemetery
merchandise, interment spaces, entombment spaces, or inurnment
spaces under a pre-need sales contract.
(S) "Purchaser" or "buyer" means the person who originally
paid the money under or in connection with a pre-need sales
contract.
(T) "Parent company" means a corporation owning more than
12 cemeteries or funeral homes in more than one state.
(U) "Foreign warehouse facility" means a warehouse
facility now or hereafter located in any state or territory of
the United States, including the District of Columbia, other
than the State of Illinois.

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A foreign warehouse facility shall be deemed to have
appointed the Department Comptroller to be its true and lawful
attorney upon whom may be served all legal process in any
action or proceeding against it relating to or growing out of
this Act, and the acceptance of the delivery of stored
merchandise under this Act shall be signification of its
agreement that any such process against it which is so served,
shall be of the same legal force and validity as though served
upon it personally.
Service of such process shall be made by delivering to and
leaving with the Department Comptroller, or any agent having
charge of the Department's Comptroller's Department of
Cemetery and Burial Trusts, a copy of such process and such
service shall be sufficient service upon such foreign warehouse
facility if notice of such service and a copy of the process
are, within 10 days thereafter, sent by registered mail by the
plaintiff to the foreign warehouse facility at its principal
office and the plaintiff's affidavit of compliance herewith is
appended to the summons. The Department Comptroller shall keep
a record of all process served upon him under this Section and
shall record therein the time of such service.
(Source: P.A. 96-879, eff. 2-2-10.)
(815 ILCS 390/5) (from Ch. 21, par. 205)
Sec. 5. It is unlawful for any seller directly or
indirectly doing business within this State to engage in

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pre-need sales without a license issued by the Department
Comptroller.
(Source: P.A. 92-419, eff. 1-1-02.)
(815 ILCS 390/6) (from Ch. 21, par. 206)
Sec. 6. License application.
(a) An application for a license shall be made in writing
to the Department Comptroller on forms prescribed by him or
her, signed by the applicant under oath verified by a notary
public, and accompanied by a non-returnable $25 application
fee. The Department Comptroller may prescribe abbreviated
application forms for persons holding a license under the
Cemetery Care Act. Applications (except abbreviated
applications) must include at least the following information:
(1) The full name and address, both residence and
business, of the applicant if the applicant is an
individual; of every member if applicant is a partnership;
of every member of the Board of Directors if applicant is
an association; and of every officer, director and
shareholder holding more than 10% of the corporate stock if
applicant is a corporation;
(2) A detailed statement of applicant's assets and
liabilities;
(2.1) The name and address of the applicant's principal
place of business at which the books, accounts, and records
are available for examination by the Department

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Comptroller as required by this Act;
(2.2) The name and address of the applicant's branch
locations at which pre-need sales will be conducted and
which will operate under the same license number as the
applicant's principal place of business;
(3) For each individual listed under (1) above, a
detailed statement of the individual's business experience
for the 10 years immediately preceding the application; any
present or prior connection between the individual and any
other person engaged in pre-need sales; any felony or
misdemeanor convictions for which fraud was an essential
element; any charges or complaints lodged against the
individual for which fraud was an essential element and
which resulted in civil or criminal litigation; any failure
of the individual to satisfy an enforceable judgment
entered against him or her based upon fraud; and any other
information requested by the Department Comptroller
relating to the past business practices of the individual.
Since the information required by this paragraph may be
confidential or contain proprietary information, this
information shall not be available to other licensees or
the general public and shall be used only for the lawful
purposes of the Department Comptroller in enforcing this
Act;
(4) The name of the trustee and, if applicable, the
names of the advisors to the trustee, including a copy of

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the proposed trust agreement under which the trust funds
are to be held as required by this Act;
(5) Where applicable, the name of the corporate surety
company providing the performance bond for the
construction of undeveloped spaces and a copy of the bond;
and
(6) Such other information as the Department
Comptroller may reasonably require in order to determine
the qualification of the applicant to be licensed under
this Act.
(b) Applications for license shall be accompanied by a
fidelity bond executed by the applicant and a security company
authorized to do business in this State in such amount, not
exceeding $10,000, as the Department Comptroller may require.
The Department Comptroller may require additional bond from
time to time in amounts equal to one-tenth of such trust funds
but not to exceed $100,000, which bond shall run to the
Department Comptroller for the use and benefit of the
beneficiaries of such trust funds. Such licensee may by written
permit of the Department Comptroller be authorized to operate
without additional bond, except such fidelity bond as may be
required by the Department Comptroller for the protection of
the licensee against loss by default by any of its employees
engaged in the handling of trust funds.
(c) Any application not acted upon within 90 days may be
deemed denied.

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(Source: P.A. 92-419, eff. 1-1-02.)
(815 ILCS 390/7) (from Ch. 21, par. 207)
Sec. 7. The Department Comptroller may refuse to issue or
may suspend or revoke a license on any of the following
grounds:
(a) The applicant or licensee has made any
misrepresentations or false statements or concealed any
material fact;
(b) The applicant or licensee is insolvent;
(c) The applicant or licensee has been engaged in business
practices that work a fraud;
(d) The applicant or licensee has refused to give pertinent
data to the Department Comptroller;
(e) The applicant or licensee has failed to satisfy any
enforceable judgment or decree rendered by any court of
competent jurisdiction against the applicant;
(f) The applicant or licensee has conducted or is about to
conduct business in a fraudulent manner;
(g) The trust agreement is not in compliance with State or
federal law;
(h) The pre-construction performance bond, if applicable,
is not satisfactory to the Department Comptroller;
(i) The fidelity bond is not satisfactory to the Department
Comptroller;
(j) As to any individual listed in the license application

HB6078 - 44 - LRB096 20610 ASK 36318 b
as required pursuant to Section 6, that individual has
conducted or is about to conduct any business on behalf of the
applicant in a fraudulent manner, has been convicted of any
felony or misdemeanor an essential element of which is fraud,
has had a judgment rendered against him or her based on fraud
in any civil litigation, has failed to satisfy any enforceable
judgment or decree rendered against him by any court of
competent jurisdiction, or has been convicted of any felony or
any theft-related offense;
(k) The applicant or licensee has failed to make the annual
report required by this Act or to comply with a final order,
decision, or finding of the Department Comptroller made
pursuant to this Act;
(l) The applicant or licensee, including any member,
officer, or director thereof if the applicant or licensee is a
firm, partnership, association, or corporation and any
shareholder holding more than 10% of the corporate stock, has
violated any provision of this Act or any regulation or order
made by the Department Comptroller under this Act; or
(m) The Department Comptroller finds any fact or condition
existing which, if it had existed at the time of the original
application for such license would have warranted the
Department Comptroller in refusing the issuance of the license.
(Source: P.A. 92-419, eff. 1-1-02.)
(815 ILCS 390/8) (from Ch. 21, par. 208)

HB6078 - 45 - LRB096 20610 ASK 36318 b
Sec. 8. (a) Every license issued by the Department
Comptroller shall state the number of the license, the business
name and address of the licensee's principal place of business,
each branch location also operating under the license, and the
licensee's parent company, if any. The license shall be
conspicuously posted in each place of business operating under
the license. The Department Comptroller may issue additional
licenses as may be necessary for license branch locations upon
compliance with the provisions of this Act governing an
original issuance of a license for each new license.
(b) Individual salespersons representing a licensee shall
not be required to obtain licenses in their individual
capacities but must acknowledge, by affidavit, that they have
been provided a copy of and have read this Act. The licensee
must retain copies of the affidavits of its salespersons for
its records and must make the affidavits available to the
Department Comptroller for examination upon request.
(c) The licensee shall be responsible for the activities of
any person representing the licensee in selling or offering a
pre-need contract for sale.
(d) Any person not selling on behalf of a licensee shall be
required to obtain his or her own license.
(e) Any person engaged in pre-need sales, as defined
herein, prior to the effective date of this Act may continue
operations until the application for license under this Act is
denied; provided that such person shall make application for a

HB6078 - 46 - LRB096 20610 ASK 36318 b
license within 60 days of the date that application forms are
made available by the Department Comptroller.
(f) No license shall be transferable or assignable without
the express written consent of the Department Comptroller. A
transfer of more than 50% of the ownership of any business
licensed hereunder shall be deemed to be an attempted
assignment of the license originally issued to the licensee for
which consent of the Department Comptroller shall be required.
(g) Every license issued hereunder shall remain in force
until the same has been suspended, surrendered or revoked in
accordance with this Act, but the Department Comptroller, upon
the request of an interested person or on his own motion, may
issue new licenses to a licensee whose license or licenses have
been revoked, if no factor or condition then exists which would
have warranted the Department Comptroller in refusing
originally the issuance of such license.
(Source: P.A. 92-419, eff. 1-1-02.)
(815 ILCS 390/8a)
Sec. 8a. Investigation of unlawful practices. If it appears
to the Department Comptroller that a person has engaged in, is
engaging in, or is about to engage in any practice in violation
of this Act, the Department Comptroller may:
(1) require that person to file on such terms as the
Department Comptroller prescribes a statement or report in
writing, under oath or otherwise, containing all

HB6078 - 47 - LRB096 20610 ASK 36318 b
information the Department Comptroller may consider
necessary to ascertain whether a licensee is in compliance
with this Act, or whether an unlicensed person is engaging
in activities for which a license is required;
(2) examine under oath any person in connection with
the books and records pertaining to or having an impact
upon the trust funds required to be maintained pursuant to
this Act;
(3) examine any books and records of the licensee,
trustee, or investment advisor that the Department
Comptroller may consider necessary to ascertain compliance
with this Act; and
(4) require the production of a copy of any record,
book, document, account, or paper that is produced in
accordance with this Act and retain it in his or her
possession until the completion of all proceedings in
connection with which it is produced.
(Source: P.A. 92-419, eff. 1-1-02.)
(815 ILCS 390/8b)
Sec. 8b. Service. Service by the Department Comptroller of
any notice requiring a person to file a statement or report
shall be made:
(1) personally by delivery of a duly executed copy
thereof to the person to be served or, if that person is
not a natural person, in the manner provided in the Civil

HB6078 - 48 - LRB096 20610 ASK 36318 b
Practice Law when a complaint is filed; or
(2) by mailing by certified mail a duly executed copy
thereof to the person to be served at his or her last known
abode or principal place of business within this State.
(Source: P.A. 89-615, eff. 8-9-96.)
(815 ILCS 390/9) (from Ch. 21, par. 209)
Sec. 9. The Department Comptroller may upon his own motion
investigate the actions of any person providing, selling, or
offering pre-need sales contracts or of any applicant or any
person or persons holding or claiming to hold a license under
this Act. The Department Comptroller shall make such an
investigation on receipt of the verified written complaint of
any person setting forth facts which, if proved, would
constitute grounds for refusal, suspension, or revocation of a
license. Before refusing to issue, and before suspension or
revocation of a license, the Department Comptroller shall hold
a hearing to determine whether the applicant or licensee,
hereafter called the respondent, is entitled to hold such a
license. At least 10 days prior to the date set for such
hearing, the Department Comptroller shall notify the
respondent in writing that on the date designated a hearing
will be held to determine his eligibility for a license and
that he may appear in person or by counsel. Such written notice
may be served on the respondent personally, or by registered or
certified mail sent to the respondent's business address as

HB6078 - 49 - LRB096 20610 ASK 36318 b
shown in his latest notification to the Department Comptroller
and shall include sufficient information to inform the
respondent of the general nature of the charge. At the hearing,
both the respondent and the complainant shall be accorded ample
opportunity to present in person or by counsel such statements,
testimony, evidence and argument as may be pertinent to the
charges or to any defense thereto. The Department Comptroller
may reasonably continue such hearing from time to time.
The Department Comptroller may subpoena any person or
persons in this State and take testimony orally, by deposition
or by exhibit, in the same manner and with the same fees and
mileage as prescribed in judicial proceedings in civil cases.
Any authorized agent of the Department Comptroller may
administer oaths to witnesses at any hearing which the
Department Comptroller is authorized to conduct.
The Department Comptroller, at his expense, shall provide a
certified shorthand reporter to take down the testimony and
preserve a record of all proceedings at the hearing of any case
involving the refusal to issue a license, the suspension or
revocation of a license, the imposition of a monetary penalty,
or the referral of a case for criminal prosecution. The record
of any such proceeding shall consist of the notice of hearing,
complaint, all other documents in the nature of pleadings and
written motions filed in the proceedings, the transcript of
testimony and the report and orders of the Department
Comptroller. Copies of the transcript of such record may be

HB6078 - 50 - LRB096 20610 ASK 36318 b
purchased from the certified shorthand reporter who prepared
the record or from the Department Comptroller.
(Source: P.A. 92-419, eff. 1-1-02.)
(815 ILCS 390/10) (from Ch. 21, par. 210)
Sec. 10. Any circuit court may, upon application of the
Department Comptroller or of the applicant or licensee against
whom proceedings under Section 9 are pending, enter an order
requiring witnesses to attend and testify, and requiring the
production of documents, papers, files, books and records in
connection with any hearing in any proceedings under that
Section. Failure to obey such court order may result in
contempt proceedings.
(Source: P.A. 84-239.)
(815 ILCS 390/11) (from Ch. 21, par. 211)
Sec. 11. Any person affected by a final administrative
decision of the Department Comptroller may have such decision
reviewed judicially by the circuit court of the county where
such person resides, or in the case of a corporation, where the
registered office is located. If the plaintiff in the review
proceeding is not a resident of this State, venue shall be in
Sangamon County. The provisions of the "Administrative Review
Law", approved August 19, 1981, all amendments and
modifications thereto, and any rules adopted under it govern
all proceedings for the judicial review of final administrative

HB6078 - 51 - LRB096 20610 ASK 36318 b
decisions of the Department Comptroller. The term
"administrative decision" is defined as in the "Administrative
Review Law".
The Department Comptroller is not required to certify the
record of the proceeding unless the plaintiff in the review
proceedings has purchased a copy of the transcript from the
certified shorthand reporter who prepared the record or from
the Department Comptroller. Exhibits shall be certified
without cost.
(Source: P.A. 84-239.)
(815 ILCS 390/12) (from Ch. 21, par. 212)
Sec. 12. License revocation or suspension.
(a) The Department Comptroller may, upon determination
that grounds exist for the revocation or suspension of a
license issued under this Act, revoke or suspend, if
appropriate, the license issued to a licensee or to a
particular branch office location with respect to which the
grounds for revocation or suspension may occur or exist.
(b) Upon the revocation or suspension of any license, the
licensee shall immediately surrender the license or licenses to
the Department Comptroller. If the licensee fails to do so, the
Department Comptroller has the right to seize the license or
licenses.
(Source: P.A. 92-419, eff. 1-1-02.)

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(815 ILCS 390/13) (from Ch. 21, par. 213)
Sec. 13. A licensee may surrender any license by delivering
to the Department Comptroller written notice that he thereby
surrenders such license but such surrender shall not affect
such licensee's civil or criminal liability for acts committed
prior to such surrender, or affect his bond. The Department
Comptroller shall not permit a license to be surrendered by
licensee unless and until the trust funds of such licensee have
been transferred to a successor licensee who shall be licensed
by the Department Comptroller in conformity with the provisions
of this Act. Any purported transfer of trust funds without
compliance with this Section is void and the Department
Comptroller shall have the right to petition for the
appointment of a receiver to administer the business of the
licensee.
(Source: P.A. 84-239.)
(815 ILCS 390/14) (from Ch. 21, par. 214)
Sec. 14. Contract required.
(a) It is unlawful for any person doing business within
this State to accept sales proceeds, either directly or
indirectly, by any means unless the seller enters into a
pre-need sales contract with the purchaser which meets the
following requirements:
(1) A written sales contract shall be executed in at
least 11 point type in duplicate for each pre-need sale

HB6078 - 53 - LRB096 20610 ASK 36318 b
made by a licensee, and a signed copy given to the
purchaser. Each completed contract shall be numbered and
shall contain: (i) the name and address of the purchaser,
the principal office of the licensee, and the parent
company of the licensee; (ii) the name of the person, if
known, who is to receive the cemetery merchandise, cemetery
services or the completed interment, entombment or
inurnment spaces under the contract; and (iii) specific
identification of such merchandise, services or spaces to
be provided, if a specific space or spaces are contracted
for, and the price of the merchandise, services, or space
or spaces.
(2) In addition, such contracts must contain a
provision in distinguishing typeface as follows:
"Notwithstanding anything in this contract to the
contrary, you are afforded certain specific rights of
cancellation and refund under the Illinois Pre-Need
Cemetery Sales Act, enacted by the 84th General Assembly of
the State of Illinois".
(3) All pre-need sales contracts shall be sold on a
guaranteed price basis. At the time of performance of the
service or delivery of the merchandise, the seller shall be
prohibited from assessing the purchaser or his heirs or
assigns or duly authorized representative any additional
charges for the specific merchandise and services listed on
the pre-need sales contract.

HB6078 - 54 - LRB096 20610 ASK 36318 b
(4) Each contract shall clearly disclose that the price
of the merchandise or services is guaranteed and shall
contain the following statement in 12 point bold type:
"THIS CONTRACT GUARANTEES THE BENEFICIARY THE SPECIFIC
GOODS, SERVICES, INTERMENT SPACES, ENTOMBMENT SPACES, AND
INURNMENT SPACES CONTRACTED FOR. NO ADDITIONAL CHARGES MAY
BE REQUIRED FOR DESIGNATED GOODS, SERVICES, AND SPACES.
ADDITIONAL CHARGES MAY BE INCURRED FOR UNEXPECTED
EXPENSES."
(5) The pre-need sales contract shall provide that if
the particular cemetery services, cemetery merchandise, or
spaces specified in the pre-need contract are unavailable
at the time of delivery, the seller shall be required to
furnish services, merchandise, and spaces similar in style
and at least equal in quality of material and workmanship.
(6) The pre-need contract shall also disclose any
specific penalties to be incurred by the purchaser as a
result of failure to make payments; and penalties to be
incurred or moneys or refunds to be received as a result of
cancellation of the contract.
(7) The pre-need contract shall disclose the nature of
the relationship between the provider and the seller.
(8) Each pre-need contract that authorizes the
delivery of cemetery merchandise to a licensed and bonded
warehouse shall provide that prior to or upon delivery of
the merchandise to the warehouse the title to the

HB6078 - 55 - LRB096 20610 ASK 36318 b
merchandise and a warehouse receipt shall be delivered to
the purchaser or beneficiary. The pre-need contract shall
contain the following statement in 12 point bold type:
"THIS CONTRACT AUTHORIZES THE DELIVERY OF MERCHANDISE TO A
LICENSED AND BONDED WAREHOUSE FOR STORAGE OF THE
MERCHANDISE UNTIL THE MERCHANDISE IS NEEDED BY THE
BENEFICIARY. DELIVERY OF THE MERCHANDISE IN THIS MANNER MAY
PRECLUDE REFUND OF SALE PROCEEDS THAT ARE ATTRIBUTABLE TO
THE DELIVERED MERCHANDISE."
The purchaser shall initial the statement at the time
of entry into the pre-need contract.
(9) Each pre-need contract that authorizes the
placement of cemetery merchandise at the site of its
ultimate use prior to the time that the merchandise is
needed by the beneficiary shall contain the following
statement in 12 point bold type:
"THIS CONTRACT AUTHORIZES THE PLACEMENT OF MERCHANDISE AT
THE SITE OF ITS ULTIMATE USE PRIOR TO THE TIME THAT THE
MERCHANDISE IS NEEDED BY THE BENEFICIARY. DELIVERY OF THE
MERCHANDISE IN THIS MANNER MAY PRECLUDE REFUND OF SALE
PROCEEDS THAT ARE ATTRIBUTABLE TO THE DELIVERED
MERCHANDISE."
The purchaser shall initial the statement at the time
of entry into the pre-need contract.
(10) Each pre-need contract that is funded by a trust
shall clearly identify the trustee's name and address and

HB6078 - 56 - LRB096 20610 ASK 36318 b
the primary state or federal regulator of the trustee as a
corporate fiduciary.
(b) Every pre-need sales contract must be in writing. The
Department Comptroller may by rule develop a model pre-need
sales contract form that meets the requirements of this Act.
(c) To the extent the Rule is applicable, every pre-need
sales contract is subject to the Federal Trade Commission Rule
concerning the Cooling-Off Period for Door-to-Door Sales (16
CFR Part 429).
(d) No pre-need sales contract may be entered into in this
State unless there is a provider for the cemetery merchandise,
cemetery services, and undeveloped interment, inurnment, and
entombment spaces being sold. If the seller is not the
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 must be
disclosed in the pre-need sales contract at the time of sale
and before the receipt of any sale 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 by this Section constitutes an
intentional violation of this Act.
(e) No pre-need contract may be entered into in this State
unless it is accompanied by a funding mechanism permitted under
this Act and unless the seller is licensed by the Department

HB6078 - 57 - LRB096 20610 ASK 36318 b
Comptroller as provided in this Act. Nothing in this Act is
intended to relieve providers or sellers of pre-need contracts
from being licensed under any other Act required for their
profession or business or from being subject to the rules
promulgated to regulate their profession or business,
including rules on solicitation and advertisement.
(f) No pre-need contract may be entered into in this State
unless the seller explains to the purchaser the terms of the
pre-need contract prior to the purchaser signing and the
purchaser initials a statement in the contract confirming that
the seller has explained the terms of the contract prior to the
purchaser signing.
(g) The Department State Comptroller shall develop a
booklet for consumers in plain English describing the scope,
application, and consumer protections of this Act. After the
booklet is developed, no pre-need contract may be sold in this
State unless the seller distributes to the purchaser prior to
the sale a booklet developed or approved for use by the
Department State Comptroller.
(Source: P.A. 96-879, eff. 2-2-10.)
(815 ILCS 390/15) (from Ch. 21, par. 215)
Sec. 15. (a) Whenever a seller receives anything of value
under a pre-need sales contract, the person receiving such
value shall deposit 50% of all proceeds received into one or
more trust funds maintained pursuant to this Section, except

HB6078 - 58 - LRB096 20610 ASK 36318 b
that, in the case of proceeds received for the purchase of
outer burial containers, 85% of the proceeds shall be deposited
into one or more trust funds. Such deposits shall be made until
the amount deposited in trust equals 50% of the sales price of
the cemetery merchandise, cemetery services and undeveloped
spaces included in such contract, except that, in the case of
deposits for outer burial containers, deposits shall be made
until the amount deposited in trust equals 85% of the sales
price. In the event an installment contract is factored,
discounted or sold to a third party, the seller shall deposit
an amount equal to 50% of the sales price of the installment
contract, except that, for the portion of the contract
attributable to the sale of outer burial containers, the seller
shall deposit an amount equal to 85% of the sales price.
Proceeds required to be deposited in trust which are
attributable to cemetery merchandise and cemetery services
shall be held in a "Cemetery Merchandise Trust Fund". Proceeds
required to be deposited in trust which are attributable to the
sale of undeveloped interment, entombment or inurnment spaces
shall be held in a "Pre-construction Trust Fund". If
merchandise is delivered for storage in a bonded warehouse, as
authorized herein, and payment of transportation or other
charges totaling more than $20 will be required in order to
secure delivery to the site of ultimate use, upon such delivery
to the warehouse the seller shall deposit to the trust fund the
full amount of the actual or estimated transportation charge.

HB6078 - 59 - LRB096 20610 ASK 36318 b
Transportation charges which have been prepaid by the seller
shall not be deposited to trust funds maintained pursuant to
this Section. As used in this Section, "all proceeds" means the
entire amount paid by a purchaser in connection with a pre-need
sales contract, including finance charges and Cemetery Care Act
contributions, but excluding sales taxes and credit life
insurance premiums.
(b) The seller shall act as trustee of all amounts received
for cemetery merchandise, services, or undeveloped spaces
until those amounts have been deposited into the trust fund.
All trust deposits required by this Act shall be made within 30
days following the end of the month of receipt. The seller must
retain a corporate fiduciary as an independent trustee for any
amount of trust funds. Upon 30 days' prior written notice from
the seller to the Department Comptroller, the seller may change
the trustee of the trust fund. Failure to provide the
Department Comptroller with timely prior notice is an
intentional violation of this Act.
(c) A trust established under this Act must be maintained
with a corporate fiduciary as defined in Section 1-5.05 of the
Corporate Fiduciary Act.
(d) Funds deposited in the trust account shall be
identified in the records of the seller by the name of the
purchaser. Nothing shall prevent the trustee from commingling
the deposits in any such trust fund for purposes of the
management thereof and the investment of funds therein as

HB6078 - 60 - LRB096 20610 ASK 36318 b
provided in the "Common Trust Fund Act", approved June 24,
1949, as amended. In addition, multiple trust funds maintained
pursuant to this Act may be commingled or commingled with other
funeral or burial related trust funds, provided that all record
keeping requirements imposed by or pursuant to law are met.
(e) In lieu of a pre-construction trust fund, a seller of
undeveloped interment, entombment or inurnment spaces may
obtain and file with the Department Comptroller a performance
bond in an amount at least equal to 50% of the sales price of
the undeveloped spaces or the estimated cost of completing
construction, whichever is greater. The bond shall be
conditioned on the satisfactory construction and completion of
the undeveloped spaces as required in Section 19 of this Act.
Each bond obtained under this Section shall have as surety
thereon a corporate surety company incorporated under the laws
of the United States, or a State, the District of Columbia or a
territory or possession of the United States. Each such
corporate surety company must be authorized to provide
performance bonds as required by this Section, have paid-up
capital of at least $250,000 in cash or its equivalent and be
able to carry out its contracts. Each pre-need seller must
provide to the Department Comptroller, for each corporate
surety company such seller utilizes, a statement of assets and
liabilities of the corporate surety company sworn to by the
president and secretary of the corporation by January 1 of each
year.

HB6078 - 61 - LRB096 20610 ASK 36318 b
The Department Comptroller shall prohibit pre-need sellers
from doing new business with a corporate surety company if the
company is insolvent or is in violation of this Section. In
addition the Department Comptroller may direct a pre-need
seller to reinstate a pre-construction trust fund upon the
Department's Comptroller's determination that the corporate
surety company no longer is sufficient security.
All performance bonds issued pursuant to this Section must
be irrevocable during the statutory term for completing
construction specified in Section 19 of this Act, unless
terminated sooner by the completion of construction.
(f) Whenever any pre-need contract shall be entered into
and include 1) items of cemetery merchandise and cemetery
services, and 2) rights to interment, inurnment or entombment
in completed spaces without allocation of the gross sale price
among the items sold, the application of payments received
under the contract shall be allocated, first to the right to
interment, inurnment or entombment, second to items of cemetery
merchandise and cemetery services, unless some other
allocation is clearly provided in the contract.
(g) Any person engaging in pre-need sales who enters into a
combination sale which involves the sale of items covered by a
trust or performance bond requirement and any item not covered
by any entrustment or bond requirement, shall be prohibited
from increasing the gross sales price of those items not
requiring entrustment with the purpose of allocating a lesser

HB6078 - 62 - LRB096 20610 ASK 36318 b
gross sales price to items which require a trust deposit or a
performance bond.
(Source: P.A. 96-879, eff. 2-2-10.)
(815 ILCS 390/16) (from Ch. 21, par. 216)
Sec. 16. Trust funds; disbursements.
(a) A trustee shall make no disbursements from the trust
fund except as provided in this Act.
(b) A trustee has a duty to invest and manage the trust
assets pursuant to the Prudent Investor Rule under the Trusts
and Trustees Act. Whenever the seller changes trustees pursuant
to this Act, the trustee must provide written notice of the
change in trustees to the Department Comptroller no less than
28 days prior to the effective date of such a change in
trustee. The trustee has an ongoing duty to provide the
Department Comptroller with a current and true copy of the
trust agreement under which the trust funds are held pursuant
to this Act.
(c) The trustee may rely upon certifications and affidavits
made to it under the provisions of this Act, and shall not be
liable to any person for such reliance.
(d) A trustee shall be allowed to withdraw from the trust
funds maintained pursuant to this Act a reasonable fee pursuant
to the Trusts and Trustees Act.
(e) The trust shall be a single-purpose trust fund. In the
event of the seller's bankruptcy, insolvency or assignment for

HB6078 - 63 - LRB096 20610 ASK 36318 b
the benefit of creditors, or an adverse judgment, the trust
funds shall not be available to any creditor as assets of the
seller or to pay any expenses of any bankruptcy or similar
proceeding, but shall be distributed to the purchasers or
managed for their benefit by the trustee holding the funds.
Except in an action by the Department Comptroller to revoke a
license issued pursuant to this Act and for creation of a
receivership as provided in this Act, the trust shall not be
subject to judgment, execution, garnishment, attachment, or
other seizure by process in bankruptcy or otherwise, nor to
sale, pledge, mortgage, or other alienation, and shall not be
assignable except as approved by the Department Comptroller.
The changes made by this amendatory Act of the 91st General
Assembly are intended to clarify existing law regarding the
inability of licensees to pledge the trust.
(f) Because it is not known at the time of deposit or at
the time that income is earned on the trust account to whom the
principal and the accumulated earnings will be distributed, for
purposes of determining the Illinois Income Tax due on these
trust funds, the principal and any accrued earnings or losses
relating to each individual account shall be held in suspense
until the final determination is made as to whom the account
shall be paid.
(g) A trustee shall at least annually furnish to each
purchaser a statement identifying: (1) the receipts,
disbursements, and inventory of the trust, including an

HB6078 - 64 - LRB096 20610 ASK 36318 b
explanation of any fees or expenses charged by the trustee
under paragraph (d) of this Section or otherwise, (2) an
explanation of the purchaser's right to a refund, if any, under
this Act, and (3) the primary regulator of the trust as a
corporate fiduciary under state or federal law.
(Source: P.A. 96-879, eff. 2-2-10.)
(815 ILCS 390/18) (from Ch. 21, par. 218)
Sec. 18. (a) If for any reason a seller who has engaged in
pre-need sales has refused, cannot or does not comply with the
terms of the pre-need sales contract within a reasonable time
after he is required to do so, the purchaser or his heirs or
assigns or duly authorized representative shall have the right
to a refund of an amount equal to the sales price paid for
undelivered merchandise, services or spaces plus undistributed
interest amounts held in trust attributable to such contract,
within 30 days of the filing of a sworn affidavit with the
trustee setting forth the existence of the contract and the
fact of breach. A copy of this affidavit shall be filed with
the Department Comptroller and the seller. In the event a
seller is prevented from performing by strike, shortage of
materials, civil disorder, natural disaster or any like
occurrence beyond the control of the seller, the seller's time
for performance shall be extended by the length of such delay.
Nothing in this Section shall relieve the seller from any
liability for non-performance of his obligations under the

HB6078 - 65 - LRB096 20610 ASK 36318 b
pre-need sales contract.
(b) If the purchaser defaults in making payments, the
seller shall have the right to cancel the contract and withdraw
from the trust fund the entire balance to the credit of the
defaulting purchaser's account as liquidating damages. In such
event, the trustee shall deliver said balance to the seller
upon its certification, and upon receiving said certification
the trustee may rely thereon and shall not be liable to anyone
for such reliance.
(c) After final payment on a pre-need contract, any
beneficiary may upon written demand of a seller, demand that
the pre-need contract with such seller be terminated. The
seller shall, within 30 days, initiate a refund to such
purchaser or beneficiary of the entire amount held in trust
attributable to undelivered cemetery merchandise and
unperformed cemetery services, including undistributed
interest earned thereon. Where more than one beneficiary is
included in a pre-need contract, a seller need not honor a
demand for cancellation under this paragraph unless all
beneficiaries assent and their signatures are included in
written demand for refund.
(Source: P.A. 85-805.)
(815 ILCS 390/19) (from Ch. 21, par. 219)
Sec. 19. Construction or development of spaces.
(a) The construction or development of undeveloped

HB6078 - 66 - LRB096 20610 ASK 36318 b
interment, entombment or inurnment spaces shall be commenced on
that phase, section or sections of undeveloped ground or
section of lawn crypts, mausoleums, garden crypts,
columbariums or cemetery spaces in which sales are made within
3 years of the date of the first such sale. The seller shall
give written notice to the Department Comptroller no later than
30 days after the first sale. Such notice shall include a
description of the project. Once commenced, construction or
development shall be pursued diligently to completion. The
construction must be completed within 6 years of the first
sale. If construction or development is not commenced or
completed within the times specified herein, any purchaser may
surrender and cancel the contract and upon cancellation shall
be entitled to a refund of the actual amounts paid toward the
purchase price plus interest attributable to such amount earned
while in trust; provided however that any delay caused by
strike, shortage of materials, civil disorder, natural
disaster or any like occurrence beyond the control of the
seller shall extend the time of such commencement and
completion by the length of such delay.
(b) At any time within 12 months of a purchaser's entering
into a pre-need contract for undeveloped interment, entombment
or inurnment spaces, a purchaser may surrender and cancel his
or her contract and upon cancellation shall be entitled to a
refund of the actual amounts paid toward the purchase price
plus interest attributable to such amount earned while in

HB6078 - 67 - LRB096 20610 ASK 36318 b
trust. Notwithstanding the foregoing, the cancellation and
refund rights specified in this paragraph shall terminate as of
the date the seller commences construction or development of
the phase, section or sections of undeveloped spaces in which
sales are made. After the rights of cancellation and refund
specified herein have terminated, if a purchaser defaults in
making payments under the pre-need contract, the seller shall
have the right to cancel the contract and withdraw from the
trust fund the entire balance to the credit of the defaulting
purchaser's account as liquidated damages. In such event, the
trustee shall deliver said balance to the seller upon its
certification, and upon receiving said certification the
trustee may rely thereon and shall not be liable to anyone for
such reliance.
(c) During the construction or development of interment,
entombment or inurnment spaces, upon the sworn certification by
the seller and the contractor to the trustee the trustee shall
disburse from the trust fund the amount equivalent to the cost
of performed labor or delivered materials as certified. Said
certification shall be substantially in the following form:
We, the undersigned, being respectively the Seller and
Contractor, do hereby certify that the Contractor has performed
labor or delivered materials or both to (address of property)
.........., in connection with a contract to .........., and
that as of this date the value of the labor performed and
materials delivered is $.......

HB6078 - 68 - LRB096 20610 ASK 36318 b
We do further certify that in connection with such contract
there remains labor to be performed, and materials to be
delivered, of the value of $........
This Certificate is signed (insert date).
............ ............
Seller Contractor
A person who executes and delivers a completion certificate
with actual knowledge of a falsity contained therein shall be
considered in violation of this Act and subject to the
penalties contained herein.
(d) Except as otherwise authorized by this Section, every
seller of undeveloped spaces shall provide facilities for
temporary interment, entombment or inurnment for purchasers or
beneficiaries of contracts who die prior to completion of the
space. Such temporary facilities shall be constructed of
permanent materials, and, insofar as practical, be landscaped
and groomed to the extent customary in the cemetery industry in
that community. The heirs, assigns, or personal representative
of a purchaser or beneficiary shall not be required to accept
temporary underground interment spaces where the undeveloped
space contracted for was an above ground entombment or
inurnment space. In the event that temporary facilities as
described in this paragraph are not made available, upon the
death of a purchaser or beneficiary, the heirs, assigns, or
personal representative is entitled to a refund of the entire

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sales price paid plus undistributed interest attributable to
such amount while in trust.
(e) If the seller delivers a completed space acceptable to
the heirs, assigns or personal representative of a purchaser or
beneficiary, other than the temporary facilities specified
herein, in lieu of the undeveloped space purchased, the seller
shall provide the trustee with a delivery certificate and all
sums deposited under the pre-need sales contract, including the
undistributed income, shall be paid to the seller.
(f) Upon completion of the phase, section or sections of
the project as certified to the trustee by the seller and the
contractor and delivery of the deed or certificate of ownership
to the completed interment, entombment, or inurnment space to
all of the purchasers entitled to receive those ownership
documents, the trust fund requirements set forth herein shall
terminate and all funds held in the preconstruction trust fund
attributable to the completed phase, section or sections,
including interest accrued thereon, shall be returned to the
seller.
(g) This Section shall not apply to the sale of undeveloped
spaces if there has been any such sale in the same phase,
section or sections of the project prior to the effective date
of this Act.
(Source: P.A. 91-357, eff. 7-29-99; 92-419, eff. 1-1-02.)
(815 ILCS 390/20) (from Ch. 21, par. 220)

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Sec. 20. Records.
(a) Each licensee must keep accurate accounts, books and
records in this State at the principal place of business
identified in the licensee's license application or as
otherwise approved by the Department Comptroller in writing of
all transactions, copies of agreements, dates and amounts of
payments made or received, the names and addresses of the
contracting parties, the names and addresses of persons for
whose benefit funds are received, if known, and the names of
the trust depositories. Additionally, for a period not to
exceed 6 months after the performance of all terms in a
pre-need sales contract, the licensee shall maintain copies of
each pre-need contract at the licensee branch location where
the contract was entered or at some other location agreed to by
the Department Comptroller in writing.
(b) Each licensee must maintain such records for a period
of 3 years after the licensee shall have fulfilled his or her
obligation under the pre-need contract or 3 years after any
stored merchandise shall have been provided to the purchaser or
beneficiary, whichever is later.
(c) Each licensee shall submit reports to the Department
Comptroller annually, under oath, on forms furnished by the
Department Comptroller. The annual report shall contain, but
shall not be limited to, the following:
(1) An accounting of the principal deposit and
additions of principal during the fiscal year.

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(2) An accounting of any withdrawal of principal or
earnings.
(3) An accounting at the end of each fiscal year, of
the total amount of principal and earnings held.
(d) The annual report shall be filed by the licensee with
the Department Comptroller within 75 days after the end of the
licensee's fiscal year. An extension of up to 60 days may be
granted by the Department Comptroller, upon a showing of need
by the licensee. Any other reports shall be in the form
furnished or specified by the Department Comptroller. If a
licensee fails to submit an annual report to the Department
Comptroller within the time specified in this Section, the
Department Comptroller shall impose upon the licensee a penalty
of $5 for each and every day the licensee remains delinquent in
submitting the annual report. The Department Comptroller may
abate all or part of the $5 daily penalty for good cause shown.
Each report shall be accompanied by a check or money order in
the amount of $10 payable to: the Illinois Department of
Financial and Professional Regulation Comptroller, State of
Illinois.
(e) On and after the effective date of this amendatory Act
of the 91st General Assembly, a licensee may report all
required information concerning the sale of outer burial
containers on the licensee's annual report required to be filed
under this Act and shall not be required to report that
information under the Illinois Funeral or Burial Funds Act, as

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long as the information is reported under this Act.
(Source: P.A. 91-7, eff. 1-1-00; 92-419, eff. 1-1-02.)
(815 ILCS 390/21) (from Ch. 21, par. 221)
Sec. 21. Audits.
(a) The Department Comptroller may audit the records of any
licensee with respect to the trust funds created or
pre-construction performance bonds obtained pursuant to this
Act as they pertain to the deposits to and withdrawals from the
trust fund and the maintenance of the required bond, at
reasonable times no more than annually unless there is
reasonable cause to suspect a deficiency. For that purpose, the
Department Comptroller shall have free access to the office and
places of business of all licensees and all trustees or
depositories as it relates to the deposit, withdrawal and
investment of funds. The fee for an initial audit shall be
borne by the licensee if it has $10,000 or more in trust funds;
otherwise, by the Department Comptroller. The fee charged by
the Department Comptroller for such audit shall be paid by the
licensee and shall be based upon the total amount of pre-need
sales made by the licensee pursuant to this Act as of the end
of the calendar or fiscal year for which an annual report is
required and shall be in accordance with the following
schedule:
less than $10,000................................. no charge
$10,000 or more but less than $50,000............. $10

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$50,000 or more but less than $100,000............ $40
$100,000 or more but less than $250,000........... $80
$250,000 or more.................................. $100
(b) The Department Comptroller may order additional audits
or examinations as he or she may deem necessary or advisable to
ensure the safety and stability of the trust funds and to
ensure compliance with this Act. These additional audits or
examinations shall only be made after good cause is established
by the Department Comptroller in the written order. The grounds
for ordering these additional audits or examinations may
include, but shall not be limited to:
(1) material and unverified changes or fluctuations in
trust balances;
(2) the licensee changing trustees more than twice in
any 12-month period;
(3) any withdrawals or attempted withdrawals from the
trusts in violation of this Act; or
(4) failure to maintain or produce documentation
required by this Act for deposits into trust accounts or
trust investment activities.
Prior to ordering an additional audit or examination, the
Department Comptroller shall request the licensee to respond
and comment upon the factors identified by the Department
Comptroller as warranting the subsequent examination or audit.
The licensee shall have 30 days to provide a response to the
Department Comptroller. If the Department Comptroller decides

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to proceed with the additional examination or audit, the
licensee shall bear the full cost of that examination or audit
up to a maximum of $7,500. The Department Comptroller may elect
to pay for the examination or audit and receive reimbursement
from the licensee. Payment of the costs of the examination or
audit by a licensee shall be a condition of receiving or
maintaining a license under this Act. All moneys received by
the Department Comptroller for examination or audit fees shall
be maintained in a separate account to be known as the
Department's Comptroller's Administrative Fund. This Fund,
subject to appropriation by the General Assembly, may be
utilized by the Department Comptroller for enforcing this Act
and other purposes that may be authorized by law.
(Source: P.A. 88-477; 89-615, eff. 8-9-96.)
(815 ILCS 390/23) (from Ch. 21, par. 223)
Sec. 23. (a) Any person who fails to deposit the required
amount into a trust provided for in this Act, improperly
withdraws or uses trust funds for his or her own benefit, or
otherwise violates any provision of this Act is guilty of a
Class 4 felony.
(b) If any person violates this Act or fails or refuses to
comply with any order of the Department Comptroller or any part
thereof which to such person has become final and is still in
effect, the Department Comptroller may, after notice and
hearing at which it is determined that a violation of this Act

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or such order has been committed, further order that such
person shall forfeit and pay to the State of Illinois a sum not
to exceed $5,000 for each violation. Such liability shall be
enforced in an action brought in any court of competent
jurisdiction by the Department Comptroller in the name of the
people of the State of Illinois.
(c) Whenever a license is revoked by the Department
Comptroller, or the Department Comptroller determines that any
person is engaged in pre-need sales without a license, he shall
apply to the circuit court of the county where such person is
located for a receiver to administer the business of such
person.
(d) Whenever a licensee fails or refuses to make a required
report or whenever it appears to the Department Comptroller
from any report or examination that such licensee has committed
a violation of law or that the trust funds have not been
administered properly or that it is unsafe or inexpedient for
such licensee or the trustee of the trust funds of such
licensee to continue to administer such funds or that any
officer of such licensee or of the trustee of the trust funds
of such licensee has abused his trust or has been guilty of
misconduct or breach of trust in his official position
injurious to such licensee or that such licensee has suffered
as to its trust funds a serious loss by larceny, embezzlement,
burglary, repudiation or otherwise, the Department Comptroller
shall, by order, direct the discontinuance of such illegal,

HB6078 - 76 - LRB096 20610 ASK 36318 b
unsafe or unauthorized practices and shall direct strict
conformity with the requirements of the law and safety and
security in its transactions and may apply to the circuit court
of the county where such licensee is located to prevent any
disbursements or expenditures by such licensee until the trust
funds are in such condition that it would not be jeopardized
thereby and the Department Comptroller shall communicate the
facts to the Attorney General of the State of Illinois who
shall thereupon institute such proceedings against the
licensee or its trustee or the officers of either or both as
the nature of the case may require.
(e) In addition to the other penalties and remedies
provided in this Act, the Department Comptroller may bring a
civil action in the county of residence of the licensee or any
person engaging in pre-need sales, to enjoin any violation or
threatened violation of this Act.
(f) The powers vested in the Department Comptroller by this
Section are additional to any and all other powers and remedies
vested in the Department Comptroller by law, and nothing herein
contained shall be construed as requiring that the Department
Comptroller shall employ the powers conferred herein instead of
or as a condition precedent to the exercise of any other power
or remedy vested in the Department Comptroller.
(Source: P.A. 92-419, eff. 1-1-02.)
(815 ILCS 390/24) (from Ch. 21, par. 224)

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Sec. 24. The Department Comptroller may adopt, amend or
repeal such rules, not inconsistent with the law, as may be
necessary to enable him to administer and enforce the
provisions of this Act. All such action shall be taken
according to the provisions of "The Illinois Administrative
Procedure Act", approved September 22, 1975, as amended.
(Source: P.A. 84-239.)
(815 ILCS 390/27) (from Ch. 21, par. 227)
Sec. 27. (a) The provisions of this Act shall not apply to
any pre-need sale that was executed prior to the effective date
of this Act. Any seller, with the written approval of the
purchaser, shall have the option to become subject to this Act
on any pre-need sales made prior to the effective date of this
Act by giving written notice to its purchasers and to the
Department Comptroller.
(b) The provisions of this Act shall not apply to the
isolated or occasional sale by a consumer to another consumer
of cemetery merchandise, cemetery services or undeveloped
spaces by an individual who does not hold himself out as being
engaged in, or who does not engage in, making pre-need sales.
(Source: P.A. 85-805.)
(815 ILCS 390/27.1)
Sec. 27.1. Sales; liability of purchaser for shortage. In
the event of a sale or transfer of all or substantially all of

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the assets of the licensee, the sale or transfer of the
controlling interest of the corporate stock of the licensee if
the licensee is a corporation, the sale or transfer of the
controlling interest of the partnership if the licensee is a
partnership, or sale pursuant to foreclosure proceedings, the
purchaser is liable for any shortages existing before or after
the sale in the trust funds required to be maintained in a
trust under this Act and shall honor all pre-need contracts and
trusts entered into by the licensee. Any shortages existing in
the trust funds constitute a prior lien in favor of the trust
for the total value of the shortages, and notice of that lien
must be provided in all sales instruments.
In the event of a sale or transfer of all or substantially
all of the assets of the licensee, the sale or transfer of the
controlling interest of the corporate stock of the licensee if
the licensee is a corporation, or the sale or transfer of the
controlling interest of the partnership if the licensee is a
partnership, the licensee shall, at least 21 days prior to the
sale or transfer, notify the Department Comptroller, in
writing, of the pending date of sale or transfer so as to
permit the Department Comptroller to audit the books and
records of the licensee. The audit must be commenced within 10
business days after the receipt of the notification and
completed within the 21-day notification period unless the
Department Comptroller notifies the licensee during that
period that there is a basis for determining a deficiency which

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will require additional time to finalize. The sale or transfer
may not be completed by the licensee unless and until:
(i) the Department Comptroller has completed the audit
of the licensee's books and records;
(ii) any delinquency existing in the trust funds has
been paid by the licensee, or arrangements satisfactory to
the Department Comptroller have been made by the licensee
on the sale or transfer for the payment of any delinquency;
(iii) the Department Comptroller issues a license upon
application of the new owner, which license must be applied
for within 30 days after the anticipated date of the sale
or transfer, subject to the payment of any delinquencies,
if any, as stated in item (ii).
For purposes of this Section, a person, firm, corporation,
partnership, or institution that acquires the licensee through
a real estate foreclosure is subject to the provisions of this
Section.
(Source: P.A. 92-419, eff. 1-1-02.)
Section 99. Effective date. This Act takes effect upon
becoming law.
HB6078 - 80 - LRB096 20610 ASK 36318 b
INDEX
Statutes amended in order of appearance
225 ILCS 45/1a from Ch. 111 1/2, par. 73.101a
225 ILCS 45/1a-1
225 ILCS 45/1a-2
225 ILCS 45/2 from Ch. 111 1/2, par. 73.102
225 ILCS 45/3 from Ch. 111 1/2, par. 73.103
225 ILCS 45/3a from Ch. 111 1/2, par. 73.103a
225 ILCS 45/3a-5
225 ILCS 45/3b from Ch. 111 1/2, par. 73.103b
225 ILCS 45/3c from Ch. 111 1/2, par. 73.103c
225 ILCS 45/3d from Ch. 111 1/2, par. 73.103d
225 ILCS 45/3e from Ch. 111 1/2, par. 73.103e
225 ILCS 45/3f
225 ILCS 45/4a
225 ILCS 45/7.2
225 ILCS 45/7.3
225 ILCS 45/8 from Ch. 111 1/2, par. 73.108
225 ILCS 45/8.1
815 ILCS 390/4 from Ch. 21, par. 204
815 ILCS 390/5 from Ch. 21, par. 205
815 ILCS 390/6 from Ch. 21, par. 206
815 ILCS 390/7 from Ch. 21, par. 207
815 ILCS 390/8 from Ch. 21, par. 208
815 ILCS 390/8a
HB6078 - 81 - LRB096 20610 ASK 36318 b
815 ILCS 390/8b
815 ILCS 390/9 from Ch. 21, par. 209
815 ILCS 390/10 from Ch. 21, par. 210
815 ILCS 390/11 from Ch. 21, par. 211
815 ILCS 390/12 from Ch. 21, par. 212
815 ILCS 390/13 from Ch. 21, par. 213
815 ILCS 390/14 from Ch. 21, par. 214
815 ILCS 390/15 from Ch. 21, par. 215
815 ILCS 390/16 from Ch. 21, par. 216
815 ILCS 390/18 from Ch. 21, par. 218
815 ILCS 390/19 from Ch. 21, par. 219
815 ILCS 390/20 from Ch. 21, par. 220
815 ILCS 390/21 from Ch. 21, par. 221
815 ILCS 390/23 from Ch. 21, par. 223
815 ILCS 390/24 from Ch. 21, par. 224
815 ILCS 390/27 from Ch. 21, par. 227
815 ILCS 390/27.1