R9-9B-307. Prearranged Funeral Agreements Funded by Trust

A. A licensee of a funeral establishment: 1. May only offer prearranged funeral agreement funded by trust if the funeral establishment has a prearranged funeral sales endorsement to the funeral establishment’s license issued according to this Article, and 2. Shall only include in a prearranged funeral agreement those funeral goods and services regularly sold by the funeral establishment at the time of execution of the prearranged funeral agreement. B. A licensee of a funeral establishment with a prearranged funeral sales endorsement shall maintain a corporate surety bond, according to A.R.S. § 32-1391.12: 1. In the applicable amount, as follows, depending on the number of prearranged funeral agreements the funeral establishment sold or expects to sell: a. Fewer than 100 during the immediately preceding calendar year or current calendar year, $15,000; b. At least 100 but fewer than 250 prearranged funeral agreements during the immediately preceding calendar year or current calendar year, $30,000; or c. 250 or more prearranged funeral agreements during the immediately preceding calendar year or current calendar year, $50,000; and 2. Documented in a Department-provided format and containing at least the following: a. The name of the company issuing the surety bond; b. The state in which the company issuing the surety bond is regulated; c. The name of the funeral establishment; d. The amount of the surety bond; e. The effective date of the surety bond; f. The conditions upon which the surety bond would be paid, consistent with A.R.S. § 32-1391.12(A)(4); g. A statement that the surety bond protects from the commission of fraud, misappropriation, misrepresentation, or professionally negligent practices on the part of the funeral establishment; h. The signature and date of signing of the designated representative of the company issuing the surety bond; and i. The signature of each individual representing a person owning 10 percent or more of the funeral establishment. C. A licensee shall ensure that each prearranged funeral agreement funded by trust: 1. Contains the information required in A.R.S. § 1391.09(A) and (C); 2. Indicates all provisions of the contract, with all details accurately filled in and the prices of selected funeral goods and services specified in the contract, before the contract is signed; and 3. Specifies: a. Whether the prices of selected funeral goods and services specified in the contract may increase before the contract is fulfilled; b. Any funeral, burial, cemetery, or crematory expenses that are not covered under the prearranged funeral agreement; c. Whether a transportation protection agreement has been included in the prearranged funeral agreement; d. Whether the prearranged funeral is to be paid through insurance or by trust; e. Conditions under which the contract may be cancelled and the process for cancellation, as specified in R9-9B-304(C)(7) and subsection (J); f. For a trust account that is specific to a single prearranged funeral agreement, whether the individual purchasing the prearranged funeral prefers to: i. Obtain a copy of the financial institution statements, certificate of deposit, or other similar documentation of the prearranged funeral trust account for the individual’s personal possession; or ii. Authorize the funeral establishment to maintain the documentation in subsection (C)(3)(f)(i) on behalf of the purchaser; and g. As applicable, the amount of: i. The initial service fee, as specified according to A.R.S. § 1391.06(A); ii. Annual service fees, as specified according to A.R.S. § 1391.06(B); and iii. Any fees imposed by the financial institution in which the trust funds are deposited. D. If an individual inquires about a prearranged funeral, a licensee shall ensure that: 1. The individual is: a. Given price lists according to R9-9B-306(C) showing all the goods and services that may be provided, and b. Told whether the prices on the price lists may increase; 2. During a discussion about the purchase of a prearranged funeral, an individual employed by or contracted with the funeral establishment to offer prearranged funerals funded by trust complies with requirements in R9-9B- 306(E)(2)(a) through (f) and (3); and 3. If the individual decides to purchase a prearranged funeral: a. A prearranged funeral agreement is presented to the individual that clearly indicates near the top of the first page whether the cost of the prearranged funeral is to be paid through insurance or by trust; b. If the funeral services selected according to R9-9B- 306(E)(2)(d) require embalming, give the individual an opportunity to provide authorization for embalming, containing the names of the individual and the funeral establishment; c. If the funeral services selected according to R9-9B- 306(E)(2)(d) require cremation, give the individual an opportunity to provide authorization for cremation, containing the names of the individual and the funeral establishment; d. The individual is provided with a copy of the signed prearranged funeral agreement in subsection (D)(3)(a); and e. A funeral director complies with R9-9B-306(E)(4). E. A licensee shall ensure that: 1. All monies paid to a funeral establishment towards funding a prearranged funeral funded by trust are deposited in a trust account according to A.R.S. § 32-1391.05; 2. If applicable according to subsection (C)(3)(f), the purchaser of the prearranged funeral agreement funded by trust is provided with the documentation about the trust account; and 3. Within 14 calendar days after a request from the purchaser of a prearranged funeral agreement funded by trust, the purchaser of the prearranged funeral agreement funded by trust is provided with the most currently available information concerning: a. The purchaser’s principal payments and the total amount paid to date, b. The interest accrued on the principal in the trust account, c. The total service fees charged concerning the purchase of the prearranged funeral, and d. The outstanding balance on the prearranged funeral agreement funded by trust. F. As specified in A.R.S. 32-1391.06(C), a licensee may direct a financial institution in which trust funds have been deposited, pursuant to a prearranged funeral agreement funded by trust, to release funds from a trust account related to the payment of taxes on income earned on the funds deposited in the trust account: 1. For a trust account that is not specific to a single prearranged funeral agreement, by submitting to the financial institution a statement of accrued taxes that includes: a. The name of the funeral establishment; b. The name and address of the financial institution; c. The account number of the trust account; d. The amount of taxes due and payable; e. The fiscal period the taxes concern; f. The name and address of the taxing authority to which payment is to be made; and g. The signature and date of signing of: i. The licensee, and ii. The responsible funeral director; 2. For a trust account that is specific to a single prearranged funeral agreement, by submitting to the financial institution, a statement of accrued taxes that includes: a. The name of the funeral establishment; b. The name and address of the financial institution; c. The name and address of the beneficiary of the prearranged funeral agreement; d. The account number of the trust account; e. The amount of taxes due and payable; f. The fiscal period the taxes concern; g. The name and address of the taxing authority; h. Whether the payment of the amount of taxes due is to be made to the taxing authority or to the beneficiary; and i. The signature and date of signing of: i. The licensee, and ii. The responsible funeral director; and 3. If the amount in subsection (F)(2)(e) is to be paid to the beneficiary, documentation that the beneficiary has paid the taxes. G. If a prearranged funeral agreement funded by trust includes an annual service fee charged by the funeral establishment, a licensee shall ensure that: 1. The certificate of entitlement delivered by the funeral establishment to the financial institution in which trust funds have been deposited, according to A.R.S. § 32- 1391.06(B), includes: a. The name of the funeral establishment, b. The name and address of the financial institution, c. The prearranged funeral trust account number(s), d. The amount of trust funds to be withdrawn as the annual service fee for each prearranged funeral agreement funding the trust account, e. The total amount of trust funds to be withdrawn, f. An attestation that the funeral establishment is contractually entitled to an annual service fee for the preceding calendar year according to the terms of each prearranged funeral agreement funded by trust; and g. The signature and date of signing of: i. The licensee, and ii. The responsible funeral director; and 2. The amount of the trust funds released to the funeral establishment does not exceed 10 percent of the interest that has accrued on the trust funds during the preceding calendar year or the percentage of the interest specified in the prearranged funeral agreement funded by trust, whichever is less. H. When a funeral establishment has provided the funeral goods and services specified in a prearranged funeral agreement funded by trust to the deceased individual specified in the prearranged funeral agreement, a licensee shall ensure that: 1. The certificate of performance delivered by the funeral establishment to the financial institution in which trust funds have been deposited, according to A.R.S. § 32- 1391.08, includes: a. The name of the funeral establishment; b. The name and address of the financial institution; c. The name of the deceased individual; d. The trust account number into which the funds paid to satisfy the prearranged funeral agreement funded by trust were deposited; e. The amount of trust funds to be withdrawn; f. An attestation that the funeral establishment provided the funeral goods and services according to the terms of the prearranged funeral agreement funded by trust; g. For a fixed price prearranged funeral agreement funded by trust, an attestation that the funeral establishment agreed in the prearranged funeral agreement to fix the prices of the funeral goods and services provided under the prearranged funeral agreement at the price levels in effect at the time of the execution of the prearranged funeral agreement by the purchaser; h. An attestation that the amount in subsection (H)(1)(e) constitutes: i. The total charges for the funeral goods and services provided according to the funeral arrangements specified in the prearranged funeral agreement funded by trust; or ii. For a fixed price prearranged funeral agreement funded by trust, the total amount specified in the prearranged funeral agreement funded by trust for the provided funeral goods and services plus the percentage of all interest accruing on the trust fund, as specified in the prearranged funeral agreement funded by trust; and i. The signature and date of signing of: i. The licensee, and ii. The responsible funeral director; 2. A certified copy of the deceased individual’s certificate of death registration, according to A.A.C. R9-19-315, accompanies the certificate of performance in subsection (H)(1); and 3. After the disbursement made according to A.R.S. § 32- 1391.08 and subsection (H)(1)(e), any applicable trust funds remaining are paid to the estate of the deceased individual. I. If the purchaser of a prearranged funeral or another individual designated by the purchaser, according to A.R.S. § 32- 1391.07(A), decides to cancel all or any part of a prearranged funeral agreement funded by trust, the purchaser or designated individual shall: 1. Send a written request to the funeral establishment for termination of the contract containing: a. The name of the funeral establishment; b. The full name and address of the prearranged funeral purchaser or designated individual making the request; c. A statement that the purchaser or designated individual is, as applicable, canceling: i. The prearranged funeral agreement funded by trust and requesting refund of the trust funds, or ii. Specific items that are included in the prearranged funeral agreement funded by trust and requesting refund of the charges for the specific items from the trust funds; and d. The dated signature of the individual making the written request, as specified according to subsection (I)(1)(b); and 2. Include the information or documentation required to verify the identity of the individual making the written request, according to the instructions provided as required in the policies and procedures in R9-9B- 304(C)(7). J. If a funeral establishment receives a request for cancellation of a prearranged funeral agreement funded by trust according to subsection (I), a licensee shall: 1. Within seven calendar days: a. Direct the financial institution in which the trust funds are held to release the applicable amount of trust funds to the funeral establishment, and b. Refund the applicable amount of trust funds to the purchaser or designated individual requesting the cancellation; and 2. If the request in subsection (I) is made according to A.R.S. § 32-1391.07(B), ensure that the refund includes all monies paid under the prearranged funeral agreement funded by trust, including the full amount of any initial service fee paid by the purchaser and any interest accrued.