HP1270, LD 1717, item 1, An Act To Establish a Preneed Life Insurance Producer License and Preneed Life Insurance Product for Prearranged Funeral Plans

An Act To Establish a Preneed Life Insurance Producer License and Preneed Life Insurance Product for Prearranged Funeral Plans

Be it enacted by the People of the State of Maine as follows:

Sec. 1. 24-A MRSA §1420-A, sub-§§8-A and 8-B are enacted to read:

8-A. Limited line preneed life insurance. "Limited line preneed life insurance" means a life insurance policy, certificate or annuity that is designated by the purchaser as payment for a prearranged funeral or burial plan as described in Title 32, section 1401.

8-B. Limited line preneed life insurance producer. "Limited line preneed life insurance producer" means a person who:

A. Is licensed by the State Board of Funeral Service for the practice of funeral service under Title 32, chapter 21; and

B. Is licensed in accordance with section 1420-Q to sell, solicit and negotiate limited line preneed life insurance coverage to individuals through a master, corporate, group or individual policy.

Sec. 2. 24-A MRSA §1420-F, sub-§1, ¶K, as enacted by PL 2001, c. 259, §24, is amended to read:

K. Automobile mechanical breakdown contracts, which are a limited line; and

Sec. 3. 24-A MRSA §1420-F, sub-§1, ¶L, as repealed and replaced by PL 2007, c. 51, §3, is amended to read:

L. Insurance offered, sold or solicited in connection with and incidental to the rental of rental cars for a period of no more than 60 days, whether at the rental office or by preselection of coverage in master, corporate, group or individual agreements, that is nontransferable, applies only to the rental car that is the subject of the rental agreement and is limited to the following kinds of insurance:

(1) Personal accident insurance for renters and other rental car occupants for accidental death or dismemberment and for medical expenses resulting from an accident that occurs with the rental car during the rental period;

(2) Liability insurance that provides protection to the renters and other authorized drivers of a rental car for liability arising from the operation or use of the rental car during the rental period;

(3) Personal effects insurance that provides coverage to renters and other vehicle occupants for loss of, or damage to, personal effects in the rental car during the rental period;

(4) Roadside assistance and emergency sickness protection insurance; and

(5) Any other coverage designated by the superintendent . ; and

Sec. 4. 24-A MRSA §1420-F, sub-§1, ¶M is enacted to read:

M. Limited line preneed life insurance, which is a limited line.

Sec. 5. 24-A MRSA §1420-Q is enacted to read:

§ 1420-Q. Limited line preneed life insurance producer license

Notwithstanding any provision of law to the contrary contained in this subchapter, this section governs the licensing of limited line preneed life insurance producers.

1. License. The superintendent shall issue a license to an applicant to act as a limited line preneed life insurance producer on receipt of certification from an insurer authorized to write life insurance policies and fixed annuity contracts in the State that the applicant:

A. Is licensed for the practice of funeral service by the State Board of Funeral Service;

B. Has agreed to act as an agent for that insurer to sell, solicit or negotiate limited line preneed life insurance;

C. Has completed a course of study and instruction pursuant to subsection 2; and

D. Has passed a written examination in accordance with subsection 3.

A license holder under this section may serve as an agent for more than one insurer authorized to write life insurance policies and fixed annuity contracts in the State.

2. Instruction. An applicant for a license under this section must have successfully completed a course of study and instruction on life insurance policies and fixed annuity contracts that is offered by an insurer authorized to write life insurance policies and fixed annuity contracts in the State that has received approval under subsection 4. The course of study and instruction must be at least 8 hours in duration and include instruction on:

A. The life insurance policies and fixed annuity contracts that may be sold by licensees under this section;

B. The laws governing prearranged funeral and burial plans, rules adopted by the State Board of Funeral Service relating to prearranged funeral and burial plans and the forms and filing requirements associated with those laws and rules; and

C. The requirements pertaining to disclosures and advertising of information relating to prearranged funeral and burial plans, life insurance policies and fixed annuity contracts.

3. Examination. The superintendent, following consultation with the State Board of Funeral Service, shall develop a uniform written examination for applicants for licensure that fairly tests knowledge of the information contained in the course of study and instruction required under subsection 2.

4. Approval to provide course and to conduct examination. An insurer authorized to write life insurance policies and fixed annuity contracts in the State may request approval from the superintendent to provide the course of study and instruction pursuant to subsection 2 and administer the examination under subsection 3 by submitting a complete outline and description of the course and the proposed manner of conducting the examination.

5. Investigation. The superintendent may investigate as the superintendent determines necessary the manner of instruction and the examination administered by an insurer that has been approved pursuant to subsection 4.

6. Revocation of approval. The superintendent may revoke approval granted to an insurer pursuant to subsection 4 after providing 30 days' notice to that insurer.

7. Limit of authority. A limited line preneed life insurance producer licensed under this section may not write any coverage or combination of coverages with initial guaranteed death benefits on any life that exceed the total cost of the prearranged funeral or burial plan as described in Title 32, section 1401.

8. Revocation; notification. A license issued under this section is revoked if the license holder ceases to act as an agent for the insurer that provided certification under subsection 1 for the license holder. Not later than the 15th day after the date on which the license holder ceases to act as an agent for an insurer, the insurer or license holder shall send written notification of the revocation to the superintendent.

9. Information regarding new products. An insurer who provides certification under subsection 1 for a license holder shall provide education to that license holder regarding new products the license holder may sell, solicit or negotiate to fund prearranged funeral and burial plans.

10. Rules. The superintendent may adopt rules to implement this section. Rules adopted pursuant to this subsection are routine technical rules as defined in Title 5, chapter 375, subchapter 2-A.

Sec. 6. 24-A MRSA §2176, as amended by PL 1999, c. 258, §1, is repealed.

Sec. 7. 32 MRSA §1400, sub-§7 is enacted to read:

7. Solicit; solicitation. "Solicit" means to engage in uninvited telephone or door-to-door contact. "Solicitation" means the action or instance of soliciting.

Sec. 8. 32 MRSA §1401, sub-§1-A, ¶B, as enacted by PL 2003, c. 109, §3, is amended to read:

B. An agreement under paragraph A must be in writing and a copy must be furnished to the person or the person's legal representative by the mortuary trustee when the agreement is executed. The agreement must identify the parties to the agreement and must be signed by a person licensed for the practice of funeral service on behalf of the funeral home or funeral establishment. The agreement may be revocable or irrevocable; however, if the agreement is irrevocable, there must be a provision to allow for the transfer of the trust account by the appointment of successor trustees. The agreement must clearly state terms providing for disposition of excess funds after funeral goods and services have been provided. The agreement must clearly state any fees that may be charged against the trust account. Fees must be reasonable, as defined by the board, and may be charged only:

(1) Upon transfer of a trust account by the appointment of a successor trustee;

(2) Upon revocation of the agreement if the agreement is revocable; and

(3) For the actual financial and tax administration of the trust account.

Sec. 9. 32 MRSA §1401, sub-§2, as enacted by PL 1999, c. 258, §2 and affected by §3, is amended to read:

2. Rulemaking. The board shall adopt rules regarding prearranged funeral agreements, including, but not limited to:

A. The form, format and content of trust agreements;

B. Standards regarding when service contracts are required in conjunction with trust agreements and the form, format and content of the service contracts;

C. The establishment of reasonable fees that may be charged only pursuant to subsection 1, paragraph D; and

D. Inspection of trust agreements, account information and any related documentation . ; and

E. Rules to coordinate with provisions under Title 24-A, section 1420-Q relating to limited line preneed life insurance and limited line preneed life insurance producers.

Rules adopted pursuant to this section subsection are routine technical rules under the Maine Revised Statutes, Title 5, chapter 375, subchapter II-A 2-A.

Sec. 10. 32 MRSA §1402, as amended by PL 1983, c. 413, §55, is further amended to read:

§ 1402. Solicitation of prearranged funerals and funeral business prohibited

No A funeral home, funeral establishment or person holding a license under this chapter shall may not as, or through, an agent or principal solicit a prearranged funeral service or plan for any person or persons. "Prearranged funeral service or plan" shall mean means any funeral service or plan which that is arranged, planned or determined prior to the demise of a person or persons for whom the funeral service is to be performed. Funeral homes, funeral establishments and licensees under this chapter may enter into contracts or agreements for prearranged funeral services or plans provided that as long as they do not in any manner either as, or through, principals or agents solicit such that contract or agreement.

No A funeral home, funeral establishment or person licensed under this chapter shall may not pay or cause to be paid, directly or indirectly, any money or other thing of value to a person not responsible for payment for the funeral as a commission or gratuity for the securing of business for such funeral home, establishment or licensee. Nothing in this section limits or precludes the payment of a commission earned in connection with the sale of limited line preneed life insurance by producers of those products who are licensed to make sales of those products pursuant to Title 24-A, section 1420-Q.

Any person who violates this section is guilty of a Class E crime.

Sec. 11. 32 MRSA §1455-B, sub-§5, as enacted by PL 2007, c. 402, Pt. J, §7, is amended to read:

5. Unauthorized commission to secure business. The direct or indirect payment or offer of payment of a commission by the licensee or the licensee's agents, assistants or employees for the purpose of securing business , except that nothing in this subsection limits or precludes the payment of a commission earned in connection with the sale of limited line preneed life insurance by producers of those products who are licensed to make sales of those products pursuant to Title 24-A, section 1420-Q;

summary

This bill:

1. Authorizes a limited line preneed life insurance product and a limited line preneed life insurance producer license;

2. For purposes of the laws governing funeral practices, limits impermissible solicitations to uninvited telephone and door-to-door contacts;

3. Authorizes the payment of commissions in connection with the sale of limited line preneed life insurance by producers who are duly licensed to make such sales;

4. Repeals the prohibition on an insurer retaining or employing a funeral establishment or its employees as producers; and

5. Requires that an authorized representative of a mortuary sign the prearranged funeral or burial plan.

HP1270 LD 1717	Second Regular Session - 125th Maine Legislature		LR 2485 Item 1
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