Report Title:
Prepaid Funeral Plan; Cancellation, Refund, and Default
Description:
Establishes requirements for cancellation, refund, and default of prepaid funeral plan contracts. Clarifies requirements for prepaid funeral plan contract terms. (SD1)
|
THE SENATE |
S.B. NO. |
60 |
|
TWENTY-THIRD LEGISLATURE, 2005 |
S.D. 1 |
|
|
STATE OF HAWAII |
||
|
|
A BILL FOR AN ACT
relating to cemetery and funeral trusts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Chapter 441, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§441- Cancellation and refund; default. (a) At any time before pre-need funeral services or pre-need interment services are received by the purchaser or the purchaser's contract beneficiary, the purchaser may cancel the pre-need contract by notifying the cemetery or pre-need funeral authority, in writing, of the purchaser's desire to cancel the contract.
(b) If the cemetery or pre-need funeral authority determines that the purchaser is in default of a pre-need contract due to nonpayment, the cemetery or pre-need funeral authority shall provide written notice of the default to the purchaser prior to canceling or terminating the contract. The notice of default shall include:
(1) A description of the nature of the default;
(2) The delinquent amounts owed on the contract;
(3) An explanation as to how the default can be cured; and
(4) A statement that advises the purchaser of all other requirements under this subsection.
The cemetery or pre-need funeral authority shall provide the purchaser with a minimum of ninety days to cure the default, and the purchaser, upon request, shall be entitled to receive a statement of the payments made and amounts owed on the contract. If the purchaser cures the default, the contract shall continue under the terms and conditions in effect prior to the default.
(c) If the contract is canceled or terminated pursuant to subsections (a) or (b), the purchaser shall be entitled to a refund of the amounts paid by the purchaser, less amounts that may be retained by the cemetery or pre-need funeral authority for its costs pursuant to section 441-38(b). The cemetery or pre-need funeral authority shall make the refund to the purchaser within fifteen business days of:
(1) Receipt of the written notice of cancellation; or
(2) Cancellation or termination due to default."
SECTION 2. Section 441-22.5, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) Every cemetery or pre-need funeral authority shall be required to provide to the purchaser of cemetery property, pre-need interment, or pre-need funeral services and related commodities a [written contract which shall] contract written in plain and clear language that shall contain the following [disclosure requirements:] disclosures:
(1) The names and addresses of the authority [and], purchaser[;], and contract beneficiary, if the beneficiary is someone other than the purchaser;
(2) A clear, itemized, and concise statement of the property, including, for cemetery property, the location of the plot, crypt, or niche by its unique identifier, any services, and any related commodities to be supplied or not supplied and by whom, particularly if the authority is not to be the provider under the terms of the contract;
(3) The purchase price of each item of property, services, and related commodities to be supplied, the total purchase price, and how the total purchase price is payable[;], including any credit terms, if applicable; provided that, pursuant to section 441-22.7, disclosure shall also be made that further additional charges or fees for perpetual care subsequent to the execution of the contract are prohibited for any purpose and on any occasion, except for reasonable fees related to the administrative costs of transferring ownership rights, including the cost of research, document and file preparation, photocopying, notary fees, records transfer and storage, and any other costs directly related to the transfer of ownership rights;
(4) Related costs covered under the contract;
(5) [The basis on which funds] Information regarding payments received from the purchaser for pre-need services and related commodities that are to be deposited in trust[;], including the:
(A) Name and address of the trustee; provided that the disclosure shall not preclude the authority from changing the trustee named;
(B) Amount of money to be placed in trust; and
(C) Amount of money paid on the contract that the authority will retain and not deposit into the trust;
(6) [Refund] The refund, cancellation, and default provisions of the contract[;], printed in twelve point bold type, including an explanation of the requirements of section 441- ;
(7) The date and place of execution of the contract;
(8) The authority's or its duly authorized agent's signature on the contract and the identification of this person by name and title; [and]
(9) A statement that the written contract, when signed, shall constitute the entire agreement between the parties relative to its subject matter and that all obligations of both parties shall be fixed and enforceable by the other parties of the contract[.];
(10) A statement that the contract may not waive any rights and duties of the parties under the law; and
(11) An explanation of the disposition of the income earned attributable to the purchaser's payments and held in trust, and a statement of the purchaser's responsibility for taxes owed on the income."
SECTION 3. Section 441-38, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) A cemetery or pre-need funeral authority may take and receive, but shall transfer to the trustee as part of or incident to the pre-need trust, all payments received after the recovery of acquisition costs, which shall be the lesser of [thirty] per cent of the contract price or the difference between the contract price and the cost of the pre-need interment or pre-need funeral services contracted to be provided. The transfer shall be made not later than thirty days after receipt of payment from the purchaser [and shall be immediately deposited in] for immediate deposit into the trust."
SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 5. This Act shall take effect upon its approval.