SSB 3058

_____ This bill relates to preneed sellers and purchase agreements (agreement) for cemetery merchandise, funeral merchandise, and funeral services. The bill provides that an agreement shall not be sold or transferred as part of the sale of a business, or the assets of a business, until the seller of the business (seller) has provided the buyer of the business (buyer) with copies of all agreements to be assumed by the buyer, as well as the additional information detailed in the bill. Current law requires a certified public accountant to complete a procedures engagement in accordance with the attestation standards established by the American institute of certified public accountants that verifies the adequacy or inadequacy of funding related to the agreements to be sold or transferred. The buyer must file a copy of the report with the commissioner of insurance (commissioner). The bill requires that the seller file a disclosure with the commissioner at least calendar days prior to the date of the transfer of any agreements that lists all of the agreements that are to be transferred to the buyer, and provides additional information as detailed in the bill. If the seller fails to file the disclosure, the commissioner may suspend certain licenses or assess penalties as detailed in the bill. The bill requires that if an agreement contains a provision stating that it will be funded by either the purchase of a new insurance policy or a new annuity, the insurance producer (producer) who sells the policy or annuity that will fund the agreement must require that any payment made by the purchaser be made payable only to the insurance company (company) designated in the agreement. The producer must remit the insurance or annuity application and the premium to the company designated in the agreement within calendar days after the date of execution of the agreement. _____ the premiums for any new insurance policy be fully paid within days after execution of the agreement. The bill requires sales agents (agents), and any persons who own at least five percent of a preneed seller business, to disclose to the commissioner all felony crimes and misdemeanors that involve dishonesty or false statement to which the agent or person has been found guilty, or to which the agent or person has pled guilty or no contest. The disclosure must be made within days of the date that the agent or person is found guilty, or of the date the agent or person pleads not guilty or no contest. The agent or person must also disclose all liens and judgments over $20,000 that are entered against them, and all bankruptcy petitions filed by the agent or person. Disclosure must occur within calendar days of the date that the lien or judgment is entered, or that a petition for bankruptcy is filed. Preneed sellers are required by the bill to establish, implement, and maintain written procedures relating to business continuity and succession planning (plan). The plan must be based upon the specific facts and circumstances of the seller’s business model, and must also address the additional circumstances detailed in the bill. Under the bill, if a purchase agreement funded by insurance or annuity proceeds includes nonguaranteed merchandise or services, the purchaser, beneficiary, or the beneficiary’s estate shall receive a credit for, and the benefit of, any growth in death benefits that is at least equal to the percentage of the total price under the purchase agreement that is attributable to the nonguaranteed merchandise or services.807(3).207 applies to purchase agreements sold or transferred as part of the sale of a business, or of the assets of a business, on or after July 1, 2022.