SB416 Bill Summary

• Clarifies that preneed contracts are not insurance contracts and requires persons selling funeral or cemetery services on a preneed basis to obtain a certificate of authority from the Department of Insurance.

• Changes certificate of authority renewal period from April 1 to July 1 and expiration date from June 1 to September 30; requires quarterly (instead of annual) submission of preneed financial transaction statements to the Commissioner of Insurance.

• Establishes the Alabama Funeral and Cemetery Preneed Consumer Protection Fund (funded at up to $20 per contract) to protect consumers who purchase preneed contracts after April 30, 2002, with restitution limits and fund management procedures.

• Increases penalties for willful violations from Class B misdemeanor to Class C felony; authorizes annual commissioner inspections of preneed records at a cost not to exceed $250 paid by the seller.

• Subjects cemetery authorities to preneed regulations; requires preconstruction trusts for mausoleums and below-ground crypts; clarifies that merchandise placed in storage prior to death need not be placed in trust.