HB338 Summary: Preneed Funeral Service Contracts Regulation

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

• Revises annual application and renewal dates for preneed certificates (changes to July 1), allows waiver of annual financial statement filing upon written request if certain conditions are met, and requires quarterly reports of preneed contract activity.

• Establishes trust requirements for preneed contract funds, specifying deposit percentages (75% for funeral services/merchandise, 60% for outer burial containers, 100% for cash advances) and allows alternative funding through life insurance or annuity contracts or surety bonds.

• Defines criminal penalties for violations including unlawful receipt of preneed payments without authority (Class B-C felony or misdemeanor depending on amount), failure to deposit funds in trust, and unlawful fund withdrawals.

• Restricts cemetery authority board members from simultaneously serving as endowment care fund trustees (with limited exceptions), requires trustee bonds, and defines net income for endowment care funds to exclude capital gains.