| Arkansas Prepaid Funeral Benefits Law |
| § 23-40-117 |
Trust
Fund - Exemption from Attachment, etc. |
| (a) |
All
contract proceeds held in trust pursuant to the provisions of this chapter, and all income
derived therefrom, shall be exempt from attachment, garnishment, execution, and claims of
creditors, receivers, or trustees in bankruptcy. The trust fund shall not be seized,
taken, appropriated, or applied to pay any debt or liability of the seller by any legal or
equitable process or by operation of law. |
| (b) |
The seller
shall notify the Insurance Commissioner within ten (10) days upon the filing of bankruptcy
or upon becoming insolvent. Upon receipt of notification, the Insurance Commissioner shall
notify the trustee of the trust fund, and all income earned after that date shall be held
in trust by the trustee, and disbursed only upon the direction of the Insurance
Commissioner. |
| §
23-40-118 |
Agent
for Deposit of Contract Proceeds |
| (a) |
Each
organization subject to this chapter shall designate an agent or agents, either by names
of the individuals or by titles of their offices or positions, who shall be responsible
for the deposit of contract proceeds collected under contracts for prepaid funeral
benefits. The organization shall notify the Insurance Commissioner of the designation
within ten (10) days after it becomes subject to this chapter and shall also notify the
Insurance Commissioner of any change in the designation within ten (10) days after the
change occurs. |
| (b) |
If any
person acting on behalf of the seller collects any contract proceeds under a contract for
prepaid funeral benefits and fails to deliver it within ten (10) days after collection to
a designated agent or if any designated agent fails to deposit the contract proceeds
within forty-five (45) days after collection, he shall be guilty of a misdemeanor and
shall be punished as prescribed in this chapter. |
| §
23-40-119 |
Annual
Report and Fee |
| (a) |
Each
organization shall file an annual report and an annual report fee with the Insurance
Commissioner on or before March 15 of each year in such form as the Insurance Commissioner
may require, showing the names or account numbers, or both, of all persons with whom
contracts for prepaid funeral benefits have been made prior to January 1 of that year
which had not been fully discharged on January 1, and also showing the date of contract,
the name of the trustee holding the trust fund, and the amount in the trust fund under
each contract on the preceding December 31. |
| (b) |
If any
officer of any organization fails or refuses to file an annual report, or to cause it to
be filed within thirty (30) days after he has been notified by the Insurance Commissioner
that the report is due and has not been received, then, upon a finding of such failure by
a court of competent jurisdiction, he shall be guilty of a misdemeanor and shall be
punished as prescribed in this chapter. |
| (c) |
Effective
on and after March 15, 1997, the annual report fee shall be based on the total amount of
aggregate contracts for prepaid funeral benefits outstanding and unfulfilled as of
December 31 of each year and shall be payable at the time the annual report is filed. The
fee shall be based on the following schedule and shall be payable to the State Insurance
Department Prepaid Trust Fund: |
|
|
|
Aggregate Amount of Outstanding
Prepaid Funeral Benefits
Contracts in Arkansas |
Annual Report
Fee Due State
of Arkansas |
| Up to $250,000 |
$200.00 |
| $250,001 to $500,000 |
$250.00 |
| $500,001 to $1,000,000 |
$500.00 |
| $1,000,001 to $2,500,000 |
$1,000.00 |
| $2,500,001 to $5,000,000 |
$2,000.00 |
| $5,000,001 to $10,000,000 |
$3,000.00 |
| $10,000,001 to $20,000,000 |
$4,000.00 |
| $20,000,001 to $40,000,000 |
$5,000.00 |
| Over 40,000,001 |
$6,000.00 |
|
|
|
| (d) |
Effective
for all prepaid funeral benefits contracts executed on and after April 1, 1997, each
licensee selling a prepaid funeral benefits contract shall remit to the State Insurance
Department a one-time fee of five dollars ($5.00) for each prepaid funeral benefits
contract (including any amendments thereto) entered into by the licensee whether cash or
trust funded or funded by an insurance policy or annuity contract. The fees shall be
remitted quarterly to the State Insurance Department Prepaid Trust Fund for each quarter
of the calendar year with a quarterly fee form as prescribed by the Insurance
Commissioner. The fees shall be remitted to the State Insurance Department no later than
forty-five (45) days after each quarter. The Insurance Commissioner may by rule or
regulation reduce the per contract fee or adjust the fee up to a maximum of fifteen
dollars ($15.00) per contract, each year, after the effective date of this act. Such fee
may be charged to the purchaser of the contract. Any fee so charged and collected shall
not be deemed to be included in the term 'contract proceeds', as defined in Arkansas Code
23-40-103(3), and shall not be subject to the deposit requirements of Arkansas Code
23-40-114(a). |
| (e) |
Absent
the Insurance Commissioner's approval of an extension for good cause shown, licensees
failing to timely report and pay any administrative and financial regulations fees to the
State Insurance Department Prepaid Trust Fund may be subject to a penalty of one hundred
dollars ($100.00) per day for each day of delinquency, payable to the State Insurance
Department Prepaid Trust Fund. The Insurance Commissioner shall deposit all administrative
and financial regulation fees and any penalties assessed under this section directly into
the State Insurance Department Prepaid Trust Fund as special revenues. |
| §
23-40-120 |
Records
Required - Examination |
| (a) |
Each
organization which has outstanding contracts for prepaid funeral benefits shall maintain
within this state any records which the Insurance Commissioner may require to enable him
to determine whether the organization is complying with the provisions of this chapter. |
| (b) |
(1) |
The
records shall be subject to examination by the Insurance Commissioner, or his
representatives, as often as he deems advisable and not less frequently than every three
(3) years; provided, however, that the Insurance Commissioner shall determine the date of
original examination without regard to the date of the original permit. |
|
(2) |
Each
permittee examined shall pay a fee for each examination not to exceed one hundred dollars
($100.00) per day, or fifty dollars ($50.00) per half day, or fraction thereof, that any
examiner is absent from the office of the Insurance Commissioner for the purpose of making
the examination. In addition, the permittee shall pay the actual meals, hotel, and
traveling expenses of each authorized examiner from Little Rock and return. The fee and
expenses shall be prorated if more than one (1) examination is made on an examination
trip. |
| §
23-40-121 |
General
Services Fund Account |
| All
filing fees and examination costs collected under this chapter shall be deposited as
special revenues into the State General Services Fund Account of the State General
Government Fund. |
| §
23-40-122 |
Cancellation |
| A
purchaser may cancel a prepaid contract, whether revocable or irrevocable, or whether cash
funded or funded by insurance or an annuity, at any time prior to performance of the
contract by the seller, subject to the following conditions: |
| (1) |
In the
case of a cash or trust funded prepaid contract: |
|
(A) |
Prior to
death of the contract beneficiary, if the prepaid contract is revocable, the purchaser
shall be entitled to receive a refund of not less than one hundred percent (100%) of all
sums paid to the seller by the purchaser, not to exceed the contract price; |
|
(B) |
After death, if the
prepaid contract is revocable, the purchaser, or his representative, shall be entitled to
receive one hundred percent (100%) of the amount paid to the seller by the purchaser, not
to exceed the contract price; |
|
(C) |
If the
prepaid contract is irrevocable, the purchaser shall not have the right to a refund of any
funds paid by him or proceeds paid to the seller, but shall have the right to change the
provider of the contract services and merchandise to a substitute provider, in which event
the seller shall transfer to the substitute provider not less than one hundred percent
(100%) of the amount paid to the seller by the purchaser, not to exceed the contract
price; |
| (2) |
In the
case of a prepaid contact funded by life insurance: |
|
(A) |
Prior to
the death of the contract beneficiary, if the prepaid contract is revocable, the purchaser
shall have the right to receive not less than one hundred percent (100%) of the cash
surrender value of the policy used to fund the prepaid contract, not to exceed the premium
paid by the purchaser; |
|
(B) |
After the death of
the contract beneficiary, if the prepaid contract is revocable, the purchaser, or his
designee, shall be entitled to receive not less than one hundred percent (100%) of the
proceeds paid to the seller, not to exceed the original face amount of the policy; |
|
(C) |
(i) |
Prior to the death of the
contract beneficiary, if the contract is irrevocable, the prepaid contract purchaser shall
not have the right to a refund of any funds paid to the seller, but shall have the right
to change the provider of the prepaid contract services and merchandise to a substitute
provider, in which event the seller shall transfer to the substitute provider not less
than one hundred percent (100%) of the cash surrender value of the policy used to fund the
prepaid contract, not to exceed the premium paid by the purchaser. |
|
|
(ii) |
After the death of the contract
beneficiary, the seller shall transfer to the substitute provider not less than one
hundred percent (100%) of the policy proceeds paid to the seller, not to exceed the
original face amount of the policy. |
| (3) |
In the
case of a prepaid contract funded by an annuity: |
|
(A) |
Prior to
the death of the contract beneficiary, if the prepaid contract is revocable, the purchaser
shall be entitled to receive a refund of not less than one hundred percent (100%) of the
annuity value, not to exceed the premium paid by the purchaser [ ] annuity funding the
prepaid contract; |
|
(B) |
After the death of
the contract beneficiary, if the prepaid contract is revocable, the purchaser, or his
designee, shall be entitled to receive not less than one hundred percent (100%) of the
annuity proceeds received by the seller, not to exceed the premium paid by the purchaser; |
|
(C) |
(i) |
Prior to the death of the
contract beneficiary, if the prepaid contract is irrevocable, the purchaser shall not have
the right to a refund of any funds paid to the seller, but shall have the right to change
the provider of the prepaid contract services and merchandise to a substitute provider, in
which event the seller shall transfer to the substitute provider not less than one hundred
percent (100%) of the annuity value, not to exceed the premium paid by the purchaser; |
|
|
(ii) |
After the death of the contract
beneficiary, the seller shall transfer to the substitute provider not less than one
hundred percent (100%) of the annuity proceeds received by the seller, not to exceed the
premiums paid by the purchaser. |
