State Codes and Statutes

Statutes > Illinois > Chapter225 > 1302

    (225 ILCS 45/1)(from Ch. 111 1/2, par. 73.101)
    Sec. 1. Payment under pre‑need contract. Except as otherwise provided in this Section, all sales proceeds paid to any person, partnership, association or corporation with respect to merchandise or services covered by this Act, upon any agreement or contract, or any series or combination of agreements or contracts, which has for a purpose the furnishing or performance of funeral services, or the furnishing or delivery of any personal property, merchandise, or services of any nature in connection with the final disposition of a dead human body, including, but not limited to, outer burial containers, urns, combination casket‑vault units, caskets and clothing, for future use at a time determinable by the death of the person or persons whose body or bodies are to be so disposed of, shall be held to be trust funds, and shall be placed in trust in accordance with Sections 1b and 2, or shall be used to purchase life insurance or annuities in accordance with Section 2a. The person, partnership, association or corporation receiving said payments under a pre‑need contract is hereby declared to be a trustee thereof until deposits of funds are made in accordance with Section 1b or 2a of this Act.
    Nothing in this Act shall be construed to prohibit the inclusion of outer burial containers in sales contracts under the Illinois Pre‑Need Cemetery Sales Act.
(Source: P.A. 96‑879, eff. 2‑2‑10.)

    (225 ILCS 45/1a) (from Ch. 111 1/2, par. 73.101a)
    Sec. 1a. For the purposes of this Act, the following terms shall have the meanings specified, unless the context clearly requires another meaning:
    "Beneficiary" means the person specified in the pre‑need contract upon whose death funeral services or merchandise shall be provided or delivered.
    "Licensee" means a seller of a pre‑need contract who has been licensed by the Comptroller under this Act.
    "Outer burial container" means any container made of concrete, steel, wood, fiberglass or similar material, used solely at the interment site, and designed and used exclusively to surround or enclose a separate casket and to support the earth above such casket, commonly known as a burial vault, grave box or grave liner, but not including a lawn crypt as defined in the Illinois Pre‑need Cemetery Sales Act.
    "Parent company" means a corporation owning more than 12 cemeteries or funeral homes in more than one state.
    "Person" means any person, partnership, association, corporation, or other entity.
    "Pre‑need contract" means any agreement or contract, or any series or combination of agreements or contracts, whether funded by trust deposits or life insurance policies or annuities, which has for a purpose the furnishing or performance of funeral services or the furnishing or delivery of any personal property, merchandise, or services of any nature in connection with the final disposition of a dead human body. Nothing in this Act is intended to regulate the content of a life insurance policy or a tax‑deferred annuity.
    "Provider" means a person who is obligated for furnishing or performing funeral services or the furnishing or delivery of any personal property, merchandise, or services of any nature in connection with the final disposition of a dead human body.
    "Purchaser" means the person who originally paid the money under or in connection with a pre‑need contract.
    "Sales proceeds" means the entire amount paid to a seller, exclusive of sales taxes paid by the seller, finance charges paid by the purchaser, and credit life, accident or disability insurance premiums, upon any agreement or contract, or series or combination of agreements or contracts, for the purpose of performing funeral services or furnishing personal property, merchandise, or services of any nature in connection with the final disposition of a dead human body, including, but not limited to, the retail price paid for such services and personal property and merchandise.
    "Purchase price" means sales proceeds less finance charges on retail installment contracts.
    "Seller" means the person who sells or offers to sell the pre‑need contract to a purchaser, whether funded by a trust agreement, life insurance policy, or tax‑deferred annuity.
    "Trustee" means a person authorized to hold funds under this Act.
(Source: P.A. 92‑419, eff. 1‑1‑02.)

    (225 ILCS 45/1a‑1)
    Sec. 1a‑1. Pre‑need contracts.
    (a) It shall be unlawful for any seller doing business within this State to accept sales proceeds from a purchaser, either directly or indirectly by any means, unless the seller enters into a pre‑need contract with the purchaser which meets the following requirements:
        (1) It states the name and address of the principal
     office of the seller and the parent company of the seller, if any.
        (1.5) If funded by a trust, it clearly identifies the
     trustee's name and address and the primary state or federal regulator of the trustee as a corporate fiduciary.
        (1.7) If funded by life insurance, it clearly
     identifies the life insurance provider and the primary regulator of the life insurance provider.
        (2) It clearly identifies the provider's name and
     address, the purchaser, and the beneficiary, if other than the purchaser.
        (2.5) If the provider has branch locations, the
     contract gives the purchaser the opportunity to identify the branch at which the funeral will be provided.
        (3) It contains a complete description of the
     funeral merchandise and services to be provided and the price of the merchandise and services, and it clearly discloses whether the price of the merchandise and services is guaranteed or not guaranteed as to price.
            (A) Each guaranteed price contract shall contain
         the following statement in 12 point bold type:
            THIS CONTRACT GUARANTEES THE BENEFICIARY THE
         SPECIFIC GOODS AND SERVICES CONTRACTED FOR. NO ADDITIONAL CHARGES MAY BE REQUIRED. FOR DESIGNATED GOODS AND SERVICES, ADDITIONAL CHARGES MAY BE INCURRED FOR UNEXPECTED EXPENSES INCLUDING, BUT NOT LIMITED TO, CASH ADVANCES, SHIPPING OF REMAINS FROM A DISTANT PLACE, OR DESIGNATED HONORARIA ORDERED OR DIRECTED BY SURVIVORS.
            (B) Except as provided in subparagraph (C) of
         this paragraph (3), each non‑guaranteed price contract shall contain the following statement in 12 point bold type:
            THIS CONTRACT DOES NOT GUARANTEE THE PRICE THE
         BENEFICIARY WILL PAY FOR ANY SPECIFIC GOODS OR SERVICES. ANY FUNDS PAID UNDER THIS CONTRACT ARE ONLY A DEPOSIT TO BE APPLIED TOWARD THE FINAL PRICE OF THE GOODS OR SERVICES CONTRACTED FOR. ADDITIONAL CHARGES MAY BE REQUIRED.
            (C) If a non‑guaranteed price contract may
         subsequently become guaranteed, the contract shall clearly disclose the nature of the guarantee and the time, occurrence, or event upon which the contract shall become a guaranteed price contract.
        (4) It provides that if the particular supplies and
     services specified in the pre‑need contract are unavailable at the time of delivery, the provider shall be required to furnish supplies and services similar in style and at least equal in quality of material and workmanship.
        (5) It discloses any penalties or restrictions,
     including but not limited to geographic restrictions or the inability of the provider to perform, on the delivery of merchandise, services, or pre‑need contract guarantees.
        (6) Regardless of the method of funding the pre‑need
     contract, the following must be disclosed:
            (A) Whether the pre‑need contract is to be
         funded by a trust, life insurance, or an annuity;
            (B) The nature of the relationship among the
         person funding the pre‑need contract, the provider, and the seller; and
            (C) The impact on the pre‑need contract of (i)
         any changes in the funding arrangement including but not limited to changes in the assignment, beneficiary designation, or use of the funds; (ii) any specific penalties to be incurred by the contract purchaser as a result of failure to make payments; (iii) penalties to be incurred or moneys or refunds to be received as a result of cancellations; and (iv) all relevant information concerning what occurs and whether any entitlements or obligations arise if there is a difference between the proceeds of the particular funding arrangement and the amount actually needed to pay for the funeral at‑need.
            (D) The method of changing the provider.
    (b) All pre‑need contracts are subject to the Federal Trade Commission Rule concerning the Cooling‑Off Period for Door‑to‑Door Sales (16 CFR Part 429).
    (c) No pre‑need contract shall be sold in this State unless there is a provider for the services and personal property being sold. If the seller is not a provider, then the seller must have a binding agreement with a provider, and the identity of the provider and the nature of the agreement between the seller and the provider shall be disclosed in the pre‑need contract at the time of the sale and before the receipt of any sales proceeds. The failure to disclose the identity of the provider, the nature of the agreement between the seller and the provider, or any changes thereto to the purchaser and beneficiary, or the failure to make the disclosures required in subdivision (a)(1), constitutes an intentional violation of this Act.
    (d) All pre‑need contracts must be in writing in at least 11 point type, numbered, and executed in duplicate. A signed copy of the pre‑need contract must be provided to the purchaser at the time of entry into the pre‑need contract. The Comptroller may by rule develop a model pre‑need contract form that meets the requirements of this Act.
    (e) The State Comptroller shall by rule develop a booklet for consumers in plain English describing the scope, application, and consumer protections of this Act. After the adoption of these rules, no pre‑need contract shall be sold in this State unless (i) the seller distributes to the purchaser prior to the sale a booklet promulgated or approved for use by the State Comptroller; (ii) the seller explains to the purchaser the terms of the pre‑need contract prior to the purchaser signing; and (iii) the purchaser initials a statement in the contract confirming that the seller has explained the terms of the contract prior to the purchaser signing.
    (f) All sales proceeds received in connection with a pre‑need contract shall be deposited into a trust account as provided in Section 1b and Section 2 of this Act, or shall be used to purchase a life insurance policy or tax‑deferred annuity as provided in Section 2a of this Act.
    (g) No pre‑need contract shall be sold in this State unless it is accompanied by a funding mechanism permitted under this Act, and unless the seller is licensed by the Comptroller as provided in Section 3 of this Act. Nothing in this Act is intended to relieve sellers of pre‑need contracts from being licensed under any other Act required for their profession or business, and being subject to the rules promulgated to regulate their profession or business, including rules on solicitation and advertisement.
(Source: P.A. 96‑879, eff. 2‑2‑10.)

    (225 ILCS 45/1a‑2)
    Sec. 1a‑2. Pre‑Need Funeral Consumer Protection Fund.
    (a) Each licensee shall pay a fee of $5 out of the funds received for each pre‑need contract sold and shall forward this sum to the Comptroller semi‑annually within 30 days of the end of June and December. Fees collected under this Section shall be deposited into the Pre‑need Funeral Consumer Protection Fund, which is hereby created as a special fund in the State treasury. Moneys in the Fund may be expended for the purposes specified in subsection (b) and to purchase insurance to cover losses guaranteed by the Fund.
    (b) In the event that the purchaser is unable to receive the benefits of his or her pre‑need contract or to receive the funds due by reason of cancellation of the contract, the purchaser may apply to the Comptroller on a form prescribed by the Comptroller for restitution from the Pre‑need Funeral Consumer Protection Fund. Upon a finding by the Comptroller that the benefits or return of payment is not available to the purchaser, the Comptroller may cause restitution to be paid to the purchaser from the Pre‑need Funeral Consumer Protection Fund.
    (c) In all such cases where a purchaser is paid restitution from the Fund, the Comptroller shall be subrogated to that purchaser's claims against the licensee for all amounts paid from the Fund. If the licensee's liability for default is subsequently proven, any award made by a court of law shall be made payable to the Pre‑need Funeral Consumer Protection Fund up to the amount paid to the purchaser from the Fund and the Comptroller shall request that the Attorney General engage in all reasonable post‑judgment collection steps to collect such claims from the judgment debtor and reimburse the Fund.
    (d) The Fund shall not be applied toward any restitution for losses in any lawsuit initiated by the Attorney General or Comptroller or with respect to any claim made on a pre‑need contract that occurred prior to the effective date of this amendatory Act of the 96th General Assembly.
    (e) Notwithstanding any other provision of this Section, the payment of restitution from the Fund shall be a matter of grace and not of right and no purchaser shall have any vested right in the Fund as a beneficiary or otherwise.
    (f) The Fund may not be allocated for any purpose other than that specified in this Act.
(Source: P.A. 96‑879, eff. 2‑2‑10.)

    (225 ILCS 45/1b)(from Ch. 111 1/2, par. 73.101b)
    Sec. 1b. (a) Whenever a seller receives sales proceeds under a pre‑need contract that the purchaser elects to fund by a trust agreement, the seller may retain an initial amount equal to 5% of the purchase price of the services, personal property or merchandise, or 15% of the purchase price of outer burial containers. Thereafter, a seller shall deposit into trust the amounts specified in this Section so that no later than upon the final payment on the contract, the trust shall equal or exceed 95% of the purchase price of all services, personal property, or merchandise, except for outer burial containers, and 85% of the purchase price of outer burial containers.
    (b) In the event that sales proceeds to be deposited into a trust are received pursuant to a cash sale or an installment contract, the seller may retain the initial percentage authorized by subsection (a) of this Section, and thereafter shall deposit into the trust the entire balance of sales proceeds received.
    (c) In the event that the deposits into a trust required by this Section do not, after final payment by the consumer, result in the trust containing at least 95% of the purchase price of all services, personal property or merchandise, except for outer burial containers and 85% of the purchase price of outer burial containers, the seller shall make an additional deposit into the trust in an amount sufficient to meet these percentages.
    (d) The trustee may not be the seller or provider of funeral services or merchandise.
(Source: P.A. 96‑879, eff. 2‑2‑10.)

    (225 ILCS 45/2)(from Ch. 111 1/2, par. 73.102)
    Sec. 2. (a) If a purchaser selects a trust arrangement to fund the pre‑need contract, all trust deposits as determined by Section 1b shall be made within 30 days of receipt.
    (b) A trust established under this Act must be maintained with a corporate fiduciary as defined in Section 1‑5.05 of the Corporate Fiduciary Act.
    (c) Trust agreements and amendments to the trust agreements used to fund a pre‑need contract shall be filed with the Comptroller.
    (d) (Blank).
    (e) A seller or provider shall furnish to the trustee and depositary the name of each payor and the amount of payment on each such account for which deposit is being so made. Nothing shall prevent the trustee from commingling the deposits in any such trust fund for purposes of its management and the investment of its funds as provided in the Common Trust Fund Act. In addition, multiple trust funds maintained under this Act may be commingled or commingled with other funeral or burial related trust funds if all record keeping requirements imposed by law are met.
    (f) (Blank).
    (g) Upon no less than 30 days prior notice to the Comptroller, the seller may change the trustee of the fund. Failure to provide the Comptroller with timely prior notice is an intentional violation of this Act.
    (h) A trustee shall at least annually furnish to each purchaser a statement containing: (1) the receipts, disbursements, and inventory of the trust, including an explanation of any fees or expenses charged by the trustee under Section 5 of this Act or otherwise, (2) an explanation of the purchaser's right to a refund, if any, under this Act, and (3) identifying the primary regulator of the trust as a corporate fiduciary under state or federal law.
(Source: P.A. 96‑879, eff. 2‑2‑10.)

    (225 ILCS 45/2a)
    Sec. 2a. Purchase of insurance or annuity.
    (a) If a purchaser selects the purchase of a life insurance policy or tax‑deferred annuity contract to fund the pre‑need contract, the application and collected premium shall be mailed within 30 days of signing the pre‑need contract.
    (b) If life insurance or an annuity is used to fund a pre‑need contract, the seller or provider shall not be named as the owner or beneficiary of the policy or annuity. No person whose only insurable interest in the insured is the receipt of proceeds from the policy or in naming who shall receive the proceeds nor any trust acting on behalf of such person or seller or provider shall be named as owner or beneficiary of the policy or annuity.
    (c) Nothing shall prohibit the purchaser from irrevocably assigning ownership of the policy or annuity used to fund a guaranteed price pre‑need contract to a person or trust for the purpose of obtaining favorable consideration for Medicaid, Supplemental Security Income, or another public assistance program, as permitted under federal law. The seller or contract provider may be named a nominal owner of the life insurance policy only for such time as it takes to immediately transfer the policy into a trust. Except for this purpose, neither the seller nor the contract provider shall be named the owner or the beneficiary of the policy or annuity.
    (d) If a life insurance policy or annuity contract is used to fund a pre‑need contract, except for guaranteed price contracts permitted in Section 4(a) of this Act, the pre‑need contract must be revocable, and any assignment provision in the pre‑need contract must contain the following disclosure in 12 point bold type:
    THIS ASSIGNMENT MAY BE REVOKED BY THE ASSIGNOR OR ASSIGNOR'S SUCCESSOR OR, IF THE ASSIGNOR IS ALSO THE INSURED AND DECEASED, BY THE REPRESENTATIVE OF THE INSURED'S ESTATE BEFORE THE RENDERING TO THE CEMETERY SERVICES OR GOODS OR FUNERAL SERVICES OR GOODS. IF THE ASSIGNMENT IS REVOKED, THE DEATH BENEFIT UNDER THE LIFE INSURANCE POLICY OR ANNUITY CONTRACT SHALL BE PAID IN ACCORDANCE WITH THE BENEFICIARY DESIGNATION UNDER THE INSURANCE POLICY OR ANNUITY CONTRACT.
    (e) Sales proceeds shall not be used to purchase life insurance policies or tax‑deferred annuities unless the company issuing the life insurance policies or tax‑deferred annuities is licensed with the Illinois Department of Insurance, and the insurance producer or annuity seller is licensed to do business in the State of Illinois.
(Source: P.A. 92‑419, eff. 1‑1‑02.)

    (225 ILCS 45/3)(from Ch. 111 1/2, par. 73.103)
    Sec. 3. Licensing.
    (a) No person, firm, partnership, association or corporation may act as seller without first securing from the State Comptroller a license to so act. Application for such license shall be in writing, signed by the applicant and duly verified on forms furnished by the Comptroller. Each application shall contain at least the following:
        (1) The full name and address (both residence and
     place of business) of the applicant, and every member, officer and director thereof if the applicant is a firm, partnership, association, or corporation, and of every shareholder holding more than 10% of the corporate stock if the applicant is a corporation;
        (2) A statement of the applicant's assets and
     liabilities;
        (3) The name and address of the applicant's
     principal place of business at which the books, accounts, and records shall be available for examination by the Comptroller as required by this Act;
        (4) The names and addresses of the applicant's
     branch locations at which pre‑need sales shall be conducted and which shall operate under the same license number as the applicant's principal place of business;
        (5) For each individual listed under item (1) above,
     a detailed statement of the individual's business experience for the 10 years immediately preceding the application; any present or prior connection between the individual and any other person engaged in pre‑need sales; any felony or misdemeanor convictions for which fraud was an essential element; any charges or complaints lodged against the individual for which fraud was an essential element and which resulted in civil or criminal litigation; any failure of the individual to satisfy an enforceable judgment entered against him based upon fraud; and any other information requested by the Comptroller relating to past business practices of the individual. Since the information required by this item (5) may be confidential or contain proprietary information, this information shall not be available to other licensees or the general public and shall be used only for the lawful purposes of the Comptroller in enforcing this Act;
        (6) The name of the trustee and, if applicable, the
     names of the advisors to the trustee, including a copy of the proposed trust agreement under which the trust funds are to be held as required by this Act; and
        (7) Such other information as the Comptroller may
     reasonably require in order to determine the qualification of the applicant to be licensed under this Act.
    (b) Applications for license shall be accompanied by a fidelity bond executed by the applicant and a surety company authorized to do business in this State or an irrevocable, unconditional letter of credit issued by a bank, credit union, or trust company authorized to do business in the State of Illinois, as approved by the State Comptroller, in such amount not exceeding $10,000 as the Comptroller may require. If, after notice and an opportunity to be heard, it has been determined that a licensee has violated this Act within the past 5 calendar years, the Comptroller may require an additional bond or letter of credit from the licensee from time to time in amounts equal to one‑tenth of such trust funds, which bond or letter of credit shall run to the Comptroller for the use and benefit of the beneficiaries of such trust funds.
    The licensee shall keep accurate accounts, books and records in this State, at the principal place of business identified in the licensee's license application or as otherwise approved by the Comptroller in writing, of all transactions, copies of all pre‑need contracts, trust agreements, and other agreements, dates and amounts of payments made and accepted thereon, the names and addresses of the contracting parties, the persons for whose benefit such funds are accepted, and the names of the depositaries of such funds. Each licensee shall maintain the documentation for a period of 3 years after the licensee has fulfilled his obligations under the pre‑need contract. Additionally, for a period not to exceed 6 months after the performance of all terms in a pre‑need sales contract, the licensee shall maintain copies of the contract at the licensee branch location where the contract was entered or at some other location agreed to by the Comptroller in writing. If an insurance policy or tax‑deferred annuity is used to fund the pre‑need contract, the licensee under this Act shall keep and maintain accurate accounts, books, and records in this State, at the principal place of business identified in the licensee's application or as otherwise approved by the Comptroller in writing, of all insurance policies and tax‑deferred annuities used to fund the pre‑need contract, the name and address of insured, annuitant, and initial beneficiary, and the name and address of the insurance company issuing the policy or annuity. If a life insurance policy or tax‑deferred annuity is used to fund a pre‑need contract, the licensee shall notify the insurance company of the name of each pre‑need contract purchaser and the amount of each payment when the pre‑need contract, insurance policy or annuity is purchased.
    The licensee shall make reports to the Comptroller annually or at such other time as the Comptroller may require, on forms furnished by the Comptroller. The licensee shall file the annual report with the Comptroller within 75 days after the end of the licensee's fiscal year. The Comptroller shall for good cause shown grant an extension for the filing of the annual report upon the written request of the licensee. Such extension shall not exceed 60 days. If a licensee fails to submit an annual report to the Comptroller within the time specified in this Section, the Comptroller shall impose upon the licensee a penalty of $5 for each and every day the licensee remains delinquent in submitting the annual report. The Comptroller may abate all or part of the $5 daily penalty for good cause shown. Every application shall be accompanied by a check or money order in the amount of $25 and every report shall be accompanied by a check or money order in the amount of $10 payable to: Comptroller, State of Illinois.
    The licensee shall make all required books and records pertaining to trust funds, insurance policies, or tax‑deferred annuities available to the Comptroller for examination. The Comptroller, or a person designated by the Comptroller who is trained to perform such examinations, may at any time investigate the books, records and accounts of the licensee with respect to trust funds, insurance policies, or tax‑deferred annuities and for that purpose may require the attendance of and examine under oath all persons whose testimony he may require. The licensee shall pay a fee for such examination in accordance with a schedule established by the Comptroller. The fee shall not exceed the cost of such examination. For pre‑need contracts funded by trust arrangements, the cost of an initial examination shall be borne by the licensee if it has $10,000 or more in trust funds, otherwise, by the Comptroller. The charge made by the Comptroller for an examination shall be based upon the total amount of trust funds held by the licensee at the end of the calendar or fiscal year for which the report is required by this Act and shall be in accordance with the following schedule:
Less than $10,000...................................no charge;
$10,000 or more but less than $50,000.....................$10;
$50,000 or more but less than $100,000....................$40;
$100,000 or more but less than $250,000...................$80;
$250,000 or more.........................................$100.
    The Comptroller may order additional audits or examinations as he or she may deem necessary or advisable to ensure the safety and stability of the trust funds and to ensure compliance with this Act. These additional audits or examinations shall only be made after good cause is established by the Comptroller in the written order. The grounds for ordering these additional audits or examinations may include, but shall not be limited to:
        (1) material and unverified changes or fluctuations
     in trust balances or insurance or annuity policy amounts;

State Codes and Statutes

Statutes > Illinois > Chapter225 > 1302

    (225 ILCS 45/1)(from Ch. 111 1/2, par. 73.101)
    Sec. 1. Payment under pre‑need contract. Except as otherwise provided in this Section, all sales proceeds paid to any person, partnership, association or corporation with respect to merchandise or services covered by this Act, upon any agreement or contract, or any series or combination of agreements or contracts, which has for a purpose the furnishing or performance of funeral services, or the furnishing or delivery of any personal property, merchandise, or services of any nature in connection with the final disposition of a dead human body, including, but not limited to, outer burial containers, urns, combination casket‑vault units, caskets and clothing, for future use at a time determinable by the death of the person or persons whose body or bodies are to be so disposed of, shall be held to be trust funds, and shall be placed in trust in accordance with Sections 1b and 2, or shall be used to purchase life insurance or annuities in accordance with Section 2a. The person, partnership, association or corporation receiving said payments under a pre‑need contract is hereby declared to be a trustee thereof until deposits of funds are made in accordance with Section 1b or 2a of this Act.
    Nothing in this Act shall be construed to prohibit the inclusion of outer burial containers in sales contracts under the Illinois Pre‑Need Cemetery Sales Act.
(Source: P.A. 96‑879, eff. 2‑2‑10.)

    (225 ILCS 45/1a) (from Ch. 111 1/2, par. 73.101a)
    Sec. 1a. For the purposes of this Act, the following terms shall have the meanings specified, unless the context clearly requires another meaning:
    "Beneficiary" means the person specified in the pre‑need contract upon whose death funeral services or merchandise shall be provided or delivered.
    "Licensee" means a seller of a pre‑need contract who has been licensed by the Comptroller under this Act.
    "Outer burial container" means any container made of concrete, steel, wood, fiberglass or similar material, used solely at the interment site, and designed and used exclusively to surround or enclose a separate casket and to support the earth above such casket, commonly known as a burial vault, grave box or grave liner, but not including a lawn crypt as defined in the Illinois Pre‑need Cemetery Sales Act.
    "Parent company" means a corporation owning more than 12 cemeteries or funeral homes in more than one state.
    "Person" means any person, partnership, association, corporation, or other entity.
    "Pre‑need contract" means any agreement or contract, or any series or combination of agreements or contracts, whether funded by trust deposits or life insurance policies or annuities, which has for a purpose the furnishing or performance of funeral services or the furnishing or delivery of any personal property, merchandise, or services of any nature in connection with the final disposition of a dead human body. Nothing in this Act is intended to regulate the content of a life insurance policy or a tax‑deferred annuity.
    "Provider" means a person who is obligated for furnishing or performing funeral services or the furnishing or delivery of any personal property, merchandise, or services of any nature in connection with the final disposition of a dead human body.
    "Purchaser" means the person who originally paid the money under or in connection with a pre‑need contract.
    "Sales proceeds" means the entire amount paid to a seller, exclusive of sales taxes paid by the seller, finance charges paid by the purchaser, and credit life, accident or disability insurance premiums, upon any agreement or contract, or series or combination of agreements or contracts, for the purpose of performing funeral services or furnishing personal property, merchandise, or services of any nature in connection with the final disposition of a dead human body, including, but not limited to, the retail price paid for such services and personal property and merchandise.
    "Purchase price" means sales proceeds less finance charges on retail installment contracts.
    "Seller" means the person who sells or offers to sell the pre‑need contract to a purchaser, whether funded by a trust agreement, life insurance policy, or tax‑deferred annuity.
    "Trustee" means a person authorized to hold funds under this Act.
(Source: P.A. 92‑419, eff. 1‑1‑02.)

    (225 ILCS 45/1a‑1)
    Sec. 1a‑1. Pre‑need contracts.
    (a) It shall be unlawful for any seller doing business within this State to accept sales proceeds from a purchaser, either directly or indirectly by any means, unless the seller enters into a pre‑need contract with the purchaser which meets the following requirements:
        (1) It states the name and address of the principal
     office of the seller and the parent company of the seller, if any.
        (1.5) If funded by a trust, it clearly identifies the
     trustee's name and address and the primary state or federal regulator of the trustee as a corporate fiduciary.
        (1.7) If funded by life insurance, it clearly
     identifies the life insurance provider and the primary regulator of the life insurance provider.
        (2) It clearly identifies the provider's name and
     address, the purchaser, and the beneficiary, if other than the purchaser.
        (2.5) If the provider has branch locations, the
     contract gives the purchaser the opportunity to identify the branch at which the funeral will be provided.
        (3) It contains a complete description of the
     funeral merchandise and services to be provided and the price of the merchandise and services, and it clearly discloses whether the price of the merchandise and services is guaranteed or not guaranteed as to price.
            (A) Each guaranteed price contract shall contain
         the following statement in 12 point bold type:
            THIS CONTRACT GUARANTEES THE BENEFICIARY THE
         SPECIFIC GOODS AND SERVICES CONTRACTED FOR. NO ADDITIONAL CHARGES MAY BE REQUIRED. FOR DESIGNATED GOODS AND SERVICES, ADDITIONAL CHARGES MAY BE INCURRED FOR UNEXPECTED EXPENSES INCLUDING, BUT NOT LIMITED TO, CASH ADVANCES, SHIPPING OF REMAINS FROM A DISTANT PLACE, OR DESIGNATED HONORARIA ORDERED OR DIRECTED BY SURVIVORS.
            (B) Except as provided in subparagraph (C) of
         this paragraph (3), each non‑guaranteed price contract shall contain the following statement in 12 point bold type:
            THIS CONTRACT DOES NOT GUARANTEE THE PRICE THE
         BENEFICIARY WILL PAY FOR ANY SPECIFIC GOODS OR SERVICES. ANY FUNDS PAID UNDER THIS CONTRACT ARE ONLY A DEPOSIT TO BE APPLIED TOWARD THE FINAL PRICE OF THE GOODS OR SERVICES CONTRACTED FOR. ADDITIONAL CHARGES MAY BE REQUIRED.
            (C) If a non‑guaranteed price contract may
         subsequently become guaranteed, the contract shall clearly disclose the nature of the guarantee and the time, occurrence, or event upon which the contract shall become a guaranteed price contract.
        (4) It provides that if the particular supplies and
     services specified in the pre‑need contract are unavailable at the time of delivery, the provider shall be required to furnish supplies and services similar in style and at least equal in quality of material and workmanship.
        (5) It discloses any penalties or restrictions,
     including but not limited to geographic restrictions or the inability of the provider to perform, on the delivery of merchandise, services, or pre‑need contract guarantees.
        (6) Regardless of the method of funding the pre‑need
     contract, the following must be disclosed:
            (A) Whether the pre‑need contract is to be
         funded by a trust, life insurance, or an annuity;
            (B) The nature of the relationship among the
         person funding the pre‑need contract, the provider, and the seller; and
            (C) The impact on the pre‑need contract of (i)
         any changes in the funding arrangement including but not limited to changes in the assignment, beneficiary designation, or use of the funds; (ii) any specific penalties to be incurred by the contract purchaser as a result of failure to make payments; (iii) penalties to be incurred or moneys or refunds to be received as a result of cancellations; and (iv) all relevant information concerning what occurs and whether any entitlements or obligations arise if there is a difference between the proceeds of the particular funding arrangement and the amount actually needed to pay for the funeral at‑need.
            (D) The method of changing the provider.
    (b) All pre‑need contracts are subject to the Federal Trade Commission Rule concerning the Cooling‑Off Period for Door‑to‑Door Sales (16 CFR Part 429).
    (c) No pre‑need contract shall be sold in this State unless there is a provider for the services and personal property being sold. If the seller is not a provider, then the seller must have a binding agreement with a provider, and the identity of the provider and the nature of the agreement between the seller and the provider shall be disclosed in the pre‑need contract at the time of the sale and before the receipt of any sales proceeds. The failure to disclose the identity of the provider, the nature of the agreement between the seller and the provider, or any changes thereto to the purchaser and beneficiary, or the failure to make the disclosures required in subdivision (a)(1), constitutes an intentional violation of this Act.
    (d) All pre‑need contracts must be in writing in at least 11 point type, numbered, and executed in duplicate. A signed copy of the pre‑need contract must be provided to the purchaser at the time of entry into the pre‑need contract. The Comptroller may by rule develop a model pre‑need contract form that meets the requirements of this Act.
    (e) The State Comptroller shall by rule develop a booklet for consumers in plain English describing the scope, application, and consumer protections of this Act. After the adoption of these rules, no pre‑need contract shall be sold in this State unless (i) the seller distributes to the purchaser prior to the sale a booklet promulgated or approved for use by the State Comptroller; (ii) the seller explains to the purchaser the terms of the pre‑need contract prior to the purchaser signing; and (iii) the purchaser initials a statement in the contract confirming that the seller has explained the terms of the contract prior to the purchaser signing.
    (f) All sales proceeds received in connection with a pre‑need contract shall be deposited into a trust account as provided in Section 1b and Section 2 of this Act, or shall be used to purchase a life insurance policy or tax‑deferred annuity as provided in Section 2a of this Act.
    (g) No pre‑need contract shall be sold in this State unless it is accompanied by a funding mechanism permitted under this Act, and unless the seller is licensed by the Comptroller as provided in Section 3 of this Act. Nothing in this Act is intended to relieve sellers of pre‑need contracts from being licensed under any other Act required for their profession or business, and being subject to the rules promulgated to regulate their profession or business, including rules on solicitation and advertisement.
(Source: P.A. 96‑879, eff. 2‑2‑10.)

    (225 ILCS 45/1a‑2)
    Sec. 1a‑2. Pre‑Need Funeral Consumer Protection Fund.
    (a) Each licensee shall pay a fee of $5 out of the funds received for each pre‑need contract sold and shall forward this sum to the Comptroller semi‑annually within 30 days of the end of June and December. Fees collected under this Section shall be deposited into the Pre‑need Funeral Consumer Protection Fund, which is hereby created as a special fund in the State treasury. Moneys in the Fund may be expended for the purposes specified in subsection (b) and to purchase insurance to cover losses guaranteed by the Fund.
    (b) In the event that the purchaser is unable to receive the benefits of his or her pre‑need contract or to receive the funds due by reason of cancellation of the contract, the purchaser may apply to the Comptroller on a form prescribed by the Comptroller for restitution from the Pre‑need Funeral Consumer Protection Fund. Upon a finding by the Comptroller that the benefits or return of payment is not available to the purchaser, the Comptroller may cause restitution to be paid to the purchaser from the Pre‑need Funeral Consumer Protection Fund.
    (c) In all such cases where a purchaser is paid restitution from the Fund, the Comptroller shall be subrogated to that purchaser's claims against the licensee for all amounts paid from the Fund. If the licensee's liability for default is subsequently proven, any award made by a court of law shall be made payable to the Pre‑need Funeral Consumer Protection Fund up to the amount paid to the purchaser from the Fund and the Comptroller shall request that the Attorney General engage in all reasonable post‑judgment collection steps to collect such claims from the judgment debtor and reimburse the Fund.
    (d) The Fund shall not be applied toward any restitution for losses in any lawsuit initiated by the Attorney General or Comptroller or with respect to any claim made on a pre‑need contract that occurred prior to the effective date of this amendatory Act of the 96th General Assembly.
    (e) Notwithstanding any other provision of this Section, the payment of restitution from the Fund shall be a matter of grace and not of right and no purchaser shall have any vested right in the Fund as a beneficiary or otherwise.
    (f) The Fund may not be allocated for any purpose other than that specified in this Act.
(Source: P.A. 96‑879, eff. 2‑2‑10.)

    (225 ILCS 45/1b)(from Ch. 111 1/2, par. 73.101b)
    Sec. 1b. (a) Whenever a seller receives sales proceeds under a pre‑need contract that the purchaser elects to fund by a trust agreement, the seller may retain an initial amount equal to 5% of the purchase price of the services, personal property or merchandise, or 15% of the purchase price of outer burial containers. Thereafter, a seller shall deposit into trust the amounts specified in this Section so that no later than upon the final payment on the contract, the trust shall equal or exceed 95% of the purchase price of all services, personal property, or merchandise, except for outer burial containers, and 85% of the purchase price of outer burial containers.
    (b) In the event that sales proceeds to be deposited into a trust are received pursuant to a cash sale or an installment contract, the seller may retain the initial percentage authorized by subsection (a) of this Section, and thereafter shall deposit into the trust the entire balance of sales proceeds received.
    (c) In the event that the deposits into a trust required by this Section do not, after final payment by the consumer, result in the trust containing at least 95% of the purchase price of all services, personal property or merchandise, except for outer burial containers and 85% of the purchase price of outer burial containers, the seller shall make an additional deposit into the trust in an amount sufficient to meet these percentages.
    (d) The trustee may not be the seller or provider of funeral services or merchandise.
(Source: P.A. 96‑879, eff. 2‑2‑10.)

    (225 ILCS 45/2)(from Ch. 111 1/2, par. 73.102)
    Sec. 2. (a) If a purchaser selects a trust arrangement to fund the pre‑need contract, all trust deposits as determined by Section 1b shall be made within 30 days of receipt.
    (b) A trust established under this Act must be maintained with a corporate fiduciary as defined in Section 1‑5.05 of the Corporate Fiduciary Act.
    (c) Trust agreements and amendments to the trust agreements used to fund a pre‑need contract shall be filed with the Comptroller.
    (d) (Blank).
    (e) A seller or provider shall furnish to the trustee and depositary the name of each payor and the amount of payment on each such account for which deposit is being so made. Nothing shall prevent the trustee from commingling the deposits in any such trust fund for purposes of its management and the investment of its funds as provided in the Common Trust Fund Act. In addition, multiple trust funds maintained under this Act may be commingled or commingled with other funeral or burial related trust funds if all record keeping requirements imposed by law are met.
    (f) (Blank).
    (g) Upon no less than 30 days prior notice to the Comptroller, the seller may change the trustee of the fund. Failure to provide the Comptroller with timely prior notice is an intentional violation of this Act.
    (h) A trustee shall at least annually furnish to each purchaser a statement containing: (1) the receipts, disbursements, and inventory of the trust, including an explanation of any fees or expenses charged by the trustee under Section 5 of this Act or otherwise, (2) an explanation of the purchaser's right to a refund, if any, under this Act, and (3) identifying the primary regulator of the trust as a corporate fiduciary under state or federal law.
(Source: P.A. 96‑879, eff. 2‑2‑10.)

    (225 ILCS 45/2a)
    Sec. 2a. Purchase of insurance or annuity.
    (a) If a purchaser selects the purchase of a life insurance policy or tax‑deferred annuity contract to fund the pre‑need contract, the application and collected premium shall be mailed within 30 days of signing the pre‑need contract.
    (b) If life insurance or an annuity is used to fund a pre‑need contract, the seller or provider shall not be named as the owner or beneficiary of the policy or annuity. No person whose only insurable interest in the insured is the receipt of proceeds from the policy or in naming who shall receive the proceeds nor any trust acting on behalf of such person or seller or provider shall be named as owner or beneficiary of the policy or annuity.
    (c) Nothing shall prohibit the purchaser from irrevocably assigning ownership of the policy or annuity used to fund a guaranteed price pre‑need contract to a person or trust for the purpose of obtaining favorable consideration for Medicaid, Supplemental Security Income, or another public assistance program, as permitted under federal law. The seller or contract provider may be named a nominal owner of the life insurance policy only for such time as it takes to immediately transfer the policy into a trust. Except for this purpose, neither the seller nor the contract provider shall be named the owner or the beneficiary of the policy or annuity.
    (d) If a life insurance policy or annuity contract is used to fund a pre‑need contract, except for guaranteed price contracts permitted in Section 4(a) of this Act, the pre‑need contract must be revocable, and any assignment provision in the pre‑need contract must contain the following disclosure in 12 point bold type:
    THIS ASSIGNMENT MAY BE REVOKED BY THE ASSIGNOR OR ASSIGNOR'S SUCCESSOR OR, IF THE ASSIGNOR IS ALSO THE INSURED AND DECEASED, BY THE REPRESENTATIVE OF THE INSURED'S ESTATE BEFORE THE RENDERING TO THE CEMETERY SERVICES OR GOODS OR FUNERAL SERVICES OR GOODS. IF THE ASSIGNMENT IS REVOKED, THE DEATH BENEFIT UNDER THE LIFE INSURANCE POLICY OR ANNUITY CONTRACT SHALL BE PAID IN ACCORDANCE WITH THE BENEFICIARY DESIGNATION UNDER THE INSURANCE POLICY OR ANNUITY CONTRACT.
    (e) Sales proceeds shall not be used to purchase life insurance policies or tax‑deferred annuities unless the company issuing the life insurance policies or tax‑deferred annuities is licensed with the Illinois Department of Insurance, and the insurance producer or annuity seller is licensed to do business in the State of Illinois.
(Source: P.A. 92‑419, eff. 1‑1‑02.)

    (225 ILCS 45/3)(from Ch. 111 1/2, par. 73.103)
    Sec. 3. Licensing.
    (a) No person, firm, partnership, association or corporation may act as seller without first securing from the State Comptroller a license to so act. Application for such license shall be in writing, signed by the applicant and duly verified on forms furnished by the Comptroller. Each application shall contain at least the following:
        (1) The full name and address (both residence and
     place of business) of the applicant, and every member, officer and director thereof if the applicant is a firm, partnership, association, or corporation, and of every shareholder holding more than 10% of the corporate stock if the applicant is a corporation;
        (2) A statement of the applicant's assets and
     liabilities;
        (3) The name and address of the applicant's
     principal place of business at which the books, accounts, and records shall be available for examination by the Comptroller as required by this Act;
        (4) The names and addresses of the applicant's
     branch locations at which pre‑need sales shall be conducted and which shall operate under the same license number as the applicant's principal place of business;
        (5) For each individual listed under item (1) above,
     a detailed statement of the individual's business experience for the 10 years immediately preceding the application; any present or prior connection between the individual and any other person engaged in pre‑need sales; any felony or misdemeanor convictions for which fraud was an essential element; any charges or complaints lodged against the individual for which fraud was an essential element and which resulted in civil or criminal litigation; any failure of the individual to satisfy an enforceable judgment entered against him based upon fraud; and any other information requested by the Comptroller relating to past business practices of the individual. Since the information required by this item (5) may be confidential or contain proprietary information, this information shall not be available to other licensees or the general public and shall be used only for the lawful purposes of the Comptroller in enforcing this Act;
        (6) The name of the trustee and, if applicable, the
     names of the advisors to the trustee, including a copy of the proposed trust agreement under which the trust funds are to be held as required by this Act; and
        (7) Such other information as the Comptroller may
     reasonably require in order to determine the qualification of the applicant to be licensed under this Act.
    (b) Applications for license shall be accompanied by a fidelity bond executed by the applicant and a surety company authorized to do business in this State or an irrevocable, unconditional letter of credit issued by a bank, credit union, or trust company authorized to do business in the State of Illinois, as approved by the State Comptroller, in such amount not exceeding $10,000 as the Comptroller may require. If, after notice and an opportunity to be heard, it has been determined that a licensee has violated this Act within the past 5 calendar years, the Comptroller may require an additional bond or letter of credit from the licensee from time to time in amounts equal to one‑tenth of such trust funds, which bond or letter of credit shall run to the Comptroller for the use and benefit of the beneficiaries of such trust funds.
    The licensee shall keep accurate accounts, books and records in this State, at the principal place of business identified in the licensee's license application or as otherwise approved by the Comptroller in writing, of all transactions, copies of all pre‑need contracts, trust agreements, and other agreements, dates and amounts of payments made and accepted thereon, the names and addresses of the contracting parties, the persons for whose benefit such funds are accepted, and the names of the depositaries of such funds. Each licensee shall maintain the documentation for a period of 3 years after the licensee has fulfilled his obligations under the pre‑need contract. Additionally, for a period not to exceed 6 months after the performance of all terms in a pre‑need sales contract, the licensee shall maintain copies of the contract at the licensee branch location where the contract was entered or at some other location agreed to by the Comptroller in writing. If an insurance policy or tax‑deferred annuity is used to fund the pre‑need contract, the licensee under this Act shall keep and maintain accurate accounts, books, and records in this State, at the principal place of business identified in the licensee's application or as otherwise approved by the Comptroller in writing, of all insurance policies and tax‑deferred annuities used to fund the pre‑need contract, the name and address of insured, annuitant, and initial beneficiary, and the name and address of the insurance company issuing the policy or annuity. If a life insurance policy or tax‑deferred annuity is used to fund a pre‑need contract, the licensee shall notify the insurance company of the name of each pre‑need contract purchaser and the amount of each payment when the pre‑need contract, insurance policy or annuity is purchased.
    The licensee shall make reports to the Comptroller annually or at such other time as the Comptroller may require, on forms furnished by the Comptroller. The licensee shall file the annual report with the Comptroller within 75 days after the end of the licensee's fiscal year. The Comptroller shall for good cause shown grant an extension for the filing of the annual report upon the written request of the licensee. Such extension shall not exceed 60 days. If a licensee fails to submit an annual report to the Comptroller within the time specified in this Section, the Comptroller shall impose upon the licensee a penalty of $5 for each and every day the licensee remains delinquent in submitting the annual report. The Comptroller may abate all or part of the $5 daily penalty for good cause shown. Every application shall be accompanied by a check or money order in the amount of $25 and every report shall be accompanied by a check or money order in the amount of $10 payable to: Comptroller, State of Illinois.
    The licensee shall make all required books and records pertaining to trust funds, insurance policies, or tax‑deferred annuities available to the Comptroller for examination. The Comptroller, or a person designated by the Comptroller who is trained to perform such examinations, may at any time investigate the books, records and accounts of the licensee with respect to trust funds, insurance policies, or tax‑deferred annuities and for that purpose may require the attendance of and examine under oath all persons whose testimony he may require. The licensee shall pay a fee for such examination in accordance with a schedule established by the Comptroller. The fee shall not exceed the cost of such examination. For pre‑need contracts funded by trust arrangements, the cost of an initial examination shall be borne by the licensee if it has $10,000 or more in trust funds, otherwise, by the Comptroller. The charge made by the Comptroller for an examination shall be based upon the total amount of trust funds held by the licensee at the end of the calendar or fiscal year for which the report is required by this Act and shall be in accordance with the following schedule:
Less than $10,000...................................no charge;
$10,000 or more but less than $50,000.....................$10;
$50,000 or more but less than $100,000....................$40;
$100,000 or more but less than $250,000...................$80;
$250,000 or more.........................................$100.
    The Comptroller may order additional audits or examinations as he or she may deem necessary or advisable to ensure the safety and stability of the trust funds and to ensure compliance with this Act. These additional audits or examinations shall only be made after good cause is established by the Comptroller in the written order. The grounds for ordering these additional audits or examinations may include, but shall not be limited to:
        (1) material and unverified changes or fluctuations
     in trust balances or insurance or annuity policy amounts;
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State Codes and Statutes

Statutes > Illinois > Chapter225 > 1302

    (225 ILCS 45/1)(from Ch. 111 1/2, par. 73.101)
    Sec. 1. Payment under pre‑need contract. Except as otherwise provided in this Section, all sales proceeds paid to any person, partnership, association or corporation with respect to merchandise or services covered by this Act, upon any agreement or contract, or any series or combination of agreements or contracts, which has for a purpose the furnishing or performance of funeral services, or the furnishing or delivery of any personal property, merchandise, or services of any nature in connection with the final disposition of a dead human body, including, but not limited to, outer burial containers, urns, combination casket‑vault units, caskets and clothing, for future use at a time determinable by the death of the person or persons whose body or bodies are to be so disposed of, shall be held to be trust funds, and shall be placed in trust in accordance with Sections 1b and 2, or shall be used to purchase life insurance or annuities in accordance with Section 2a. The person, partnership, association or corporation receiving said payments under a pre‑need contract is hereby declared to be a trustee thereof until deposits of funds are made in accordance with Section 1b or 2a of this Act.
    Nothing in this Act shall be construed to prohibit the inclusion of outer burial containers in sales contracts under the Illinois Pre‑Need Cemetery Sales Act.
(Source: P.A. 96‑879, eff. 2‑2‑10.)

    (225 ILCS 45/1a) (from Ch. 111 1/2, par. 73.101a)
    Sec. 1a. For the purposes of this Act, the following terms shall have the meanings specified, unless the context clearly requires another meaning:
    "Beneficiary" means the person specified in the pre‑need contract upon whose death funeral services or merchandise shall be provided or delivered.
    "Licensee" means a seller of a pre‑need contract who has been licensed by the Comptroller under this Act.
    "Outer burial container" means any container made of concrete, steel, wood, fiberglass or similar material, used solely at the interment site, and designed and used exclusively to surround or enclose a separate casket and to support the earth above such casket, commonly known as a burial vault, grave box or grave liner, but not including a lawn crypt as defined in the Illinois Pre‑need Cemetery Sales Act.
    "Parent company" means a corporation owning more than 12 cemeteries or funeral homes in more than one state.
    "Person" means any person, partnership, association, corporation, or other entity.
    "Pre‑need contract" means any agreement or contract, or any series or combination of agreements or contracts, whether funded by trust deposits or life insurance policies or annuities, which has for a purpose the furnishing or performance of funeral services or the furnishing or delivery of any personal property, merchandise, or services of any nature in connection with the final disposition of a dead human body. Nothing in this Act is intended to regulate the content of a life insurance policy or a tax‑deferred annuity.
    "Provider" means a person who is obligated for furnishing or performing funeral services or the furnishing or delivery of any personal property, merchandise, or services of any nature in connection with the final disposition of a dead human body.
    "Purchaser" means the person who originally paid the money under or in connection with a pre‑need contract.
    "Sales proceeds" means the entire amount paid to a seller, exclusive of sales taxes paid by the seller, finance charges paid by the purchaser, and credit life, accident or disability insurance premiums, upon any agreement or contract, or series or combination of agreements or contracts, for the purpose of performing funeral services or furnishing personal property, merchandise, or services of any nature in connection with the final disposition of a dead human body, including, but not limited to, the retail price paid for such services and personal property and merchandise.
    "Purchase price" means sales proceeds less finance charges on retail installment contracts.
    "Seller" means the person who sells or offers to sell the pre‑need contract to a purchaser, whether funded by a trust agreement, life insurance policy, or tax‑deferred annuity.
    "Trustee" means a person authorized to hold funds under this Act.
(Source: P.A. 92‑419, eff. 1‑1‑02.)

    (225 ILCS 45/1a‑1)
    Sec. 1a‑1. Pre‑need contracts.
    (a) It shall be unlawful for any seller doing business within this State to accept sales proceeds from a purchaser, either directly or indirectly by any means, unless the seller enters into a pre‑need contract with the purchaser which meets the following requirements:
        (1) It states the name and address of the principal
     office of the seller and the parent company of the seller, if any.
        (1.5) If funded by a trust, it clearly identifies the
     trustee's name and address and the primary state or federal regulator of the trustee as a corporate fiduciary.
        (1.7) If funded by life insurance, it clearly
     identifies the life insurance provider and the primary regulator of the life insurance provider.
        (2) It clearly identifies the provider's name and
     address, the purchaser, and the beneficiary, if other than the purchaser.
        (2.5) If the provider has branch locations, the
     contract gives the purchaser the opportunity to identify the branch at which the funeral will be provided.
        (3) It contains a complete description of the
     funeral merchandise and services to be provided and the price of the merchandise and services, and it clearly discloses whether the price of the merchandise and services is guaranteed or not guaranteed as to price.
            (A) Each guaranteed price contract shall contain
         the following statement in 12 point bold type:
            THIS CONTRACT GUARANTEES THE BENEFICIARY THE
         SPECIFIC GOODS AND SERVICES CONTRACTED FOR. NO ADDITIONAL CHARGES MAY BE REQUIRED. FOR DESIGNATED GOODS AND SERVICES, ADDITIONAL CHARGES MAY BE INCURRED FOR UNEXPECTED EXPENSES INCLUDING, BUT NOT LIMITED TO, CASH ADVANCES, SHIPPING OF REMAINS FROM A DISTANT PLACE, OR DESIGNATED HONORARIA ORDERED OR DIRECTED BY SURVIVORS.
            (B) Except as provided in subparagraph (C) of
         this paragraph (3), each non‑guaranteed price contract shall contain the following statement in 12 point bold type:
            THIS CONTRACT DOES NOT GUARANTEE THE PRICE THE
         BENEFICIARY WILL PAY FOR ANY SPECIFIC GOODS OR SERVICES. ANY FUNDS PAID UNDER THIS CONTRACT ARE ONLY A DEPOSIT TO BE APPLIED TOWARD THE FINAL PRICE OF THE GOODS OR SERVICES CONTRACTED FOR. ADDITIONAL CHARGES MAY BE REQUIRED.
            (C) If a non‑guaranteed price contract may
         subsequently become guaranteed, the contract shall clearly disclose the nature of the guarantee and the time, occurrence, or event upon which the contract shall become a guaranteed price contract.
        (4) It provides that if the particular supplies and
     services specified in the pre‑need contract are unavailable at the time of delivery, the provider shall be required to furnish supplies and services similar in style and at least equal in quality of material and workmanship.
        (5) It discloses any penalties or restrictions,
     including but not limited to geographic restrictions or the inability of the provider to perform, on the delivery of merchandise, services, or pre‑need contract guarantees.
        (6) Regardless of the method of funding the pre‑need
     contract, the following must be disclosed:
            (A) Whether the pre‑need contract is to be
         funded by a trust, life insurance, or an annuity;
            (B) The nature of the relationship among the
         person funding the pre‑need contract, the provider, and the seller; and
            (C) The impact on the pre‑need contract of (i)
         any changes in the funding arrangement including but not limited to changes in the assignment, beneficiary designation, or use of the funds; (ii) any specific penalties to be incurred by the contract purchaser as a result of failure to make payments; (iii) penalties to be incurred or moneys or refunds to be received as a result of cancellations; and (iv) all relevant information concerning what occurs and whether any entitlements or obligations arise if there is a difference between the proceeds of the particular funding arrangement and the amount actually needed to pay for the funeral at‑need.
            (D) The method of changing the provider.
    (b) All pre‑need contracts are subject to the Federal Trade Commission Rule concerning the Cooling‑Off Period for Door‑to‑Door Sales (16 CFR Part 429).
    (c) No pre‑need contract shall be sold in this State unless there is a provider for the services and personal property being sold. If the seller is not a provider, then the seller must have a binding agreement with a provider, and the identity of the provider and the nature of the agreement between the seller and the provider shall be disclosed in the pre‑need contract at the time of the sale and before the receipt of any sales proceeds. The failure to disclose the identity of the provider, the nature of the agreement between the seller and the provider, or any changes thereto to the purchaser and beneficiary, or the failure to make the disclosures required in subdivision (a)(1), constitutes an intentional violation of this Act.
    (d) All pre‑need contracts must be in writing in at least 11 point type, numbered, and executed in duplicate. A signed copy of the pre‑need contract must be provided to the purchaser at the time of entry into the pre‑need contract. The Comptroller may by rule develop a model pre‑need contract form that meets the requirements of this Act.
    (e) The State Comptroller shall by rule develop a booklet for consumers in plain English describing the scope, application, and consumer protections of this Act. After the adoption of these rules, no pre‑need contract shall be sold in this State unless (i) the seller distributes to the purchaser prior to the sale a booklet promulgated or approved for use by the State Comptroller; (ii) the seller explains to the purchaser the terms of the pre‑need contract prior to the purchaser signing; and (iii) the purchaser initials a statement in the contract confirming that the seller has explained the terms of the contract prior to the purchaser signing.
    (f) All sales proceeds received in connection with a pre‑need contract shall be deposited into a trust account as provided in Section 1b and Section 2 of this Act, or shall be used to purchase a life insurance policy or tax‑deferred annuity as provided in Section 2a of this Act.
    (g) No pre‑need contract shall be sold in this State unless it is accompanied by a funding mechanism permitted under this Act, and unless the seller is licensed by the Comptroller as provided in Section 3 of this Act. Nothing in this Act is intended to relieve sellers of pre‑need contracts from being licensed under any other Act required for their profession or business, and being subject to the rules promulgated to regulate their profession or business, including rules on solicitation and advertisement.
(Source: P.A. 96‑879, eff. 2‑2‑10.)

    (225 ILCS 45/1a‑2)
    Sec. 1a‑2. Pre‑Need Funeral Consumer Protection Fund.
    (a) Each licensee shall pay a fee of $5 out of the funds received for each pre‑need contract sold and shall forward this sum to the Comptroller semi‑annually within 30 days of the end of June and December. Fees collected under this Section shall be deposited into the Pre‑need Funeral Consumer Protection Fund, which is hereby created as a special fund in the State treasury. Moneys in the Fund may be expended for the purposes specified in subsection (b) and to purchase insurance to cover losses guaranteed by the Fund.
    (b) In the event that the purchaser is unable to receive the benefits of his or her pre‑need contract or to receive the funds due by reason of cancellation of the contract, the purchaser may apply to the Comptroller on a form prescribed by the Comptroller for restitution from the Pre‑need Funeral Consumer Protection Fund. Upon a finding by the Comptroller that the benefits or return of payment is not available to the purchaser, the Comptroller may cause restitution to be paid to the purchaser from the Pre‑need Funeral Consumer Protection Fund.
    (c) In all such cases where a purchaser is paid restitution from the Fund, the Comptroller shall be subrogated to that purchaser's claims against the licensee for all amounts paid from the Fund. If the licensee's liability for default is subsequently proven, any award made by a court of law shall be made payable to the Pre‑need Funeral Consumer Protection Fund up to the amount paid to the purchaser from the Fund and the Comptroller shall request that the Attorney General engage in all reasonable post‑judgment collection steps to collect such claims from the judgment debtor and reimburse the Fund.
    (d) The Fund shall not be applied toward any restitution for losses in any lawsuit initiated by the Attorney General or Comptroller or with respect to any claim made on a pre‑need contract that occurred prior to the effective date of this amendatory Act of the 96th General Assembly.
    (e) Notwithstanding any other provision of this Section, the payment of restitution from the Fund shall be a matter of grace and not of right and no purchaser shall have any vested right in the Fund as a beneficiary or otherwise.
    (f) The Fund may not be allocated for any purpose other than that specified in this Act.
(Source: P.A. 96‑879, eff. 2‑2‑10.)

    (225 ILCS 45/1b)(from Ch. 111 1/2, par. 73.101b)
    Sec. 1b. (a) Whenever a seller receives sales proceeds under a pre‑need contract that the purchaser elects to fund by a trust agreement, the seller may retain an initial amount equal to 5% of the purchase price of the services, personal property or merchandise, or 15% of the purchase price of outer burial containers. Thereafter, a seller shall deposit into trust the amounts specified in this Section so that no later than upon the final payment on the contract, the trust shall equal or exceed 95% of the purchase price of all services, personal property, or merchandise, except for outer burial containers, and 85% of the purchase price of outer burial containers.
    (b) In the event that sales proceeds to be deposited into a trust are received pursuant to a cash sale or an installment contract, the seller may retain the initial percentage authorized by subsection (a) of this Section, and thereafter shall deposit into the trust the entire balance of sales proceeds received.
    (c) In the event that the deposits into a trust required by this Section do not, after final payment by the consumer, result in the trust containing at least 95% of the purchase price of all services, personal property or merchandise, except for outer burial containers and 85% of the purchase price of outer burial containers, the seller shall make an additional deposit into the trust in an amount sufficient to meet these percentages.
    (d) The trustee may not be the seller or provider of funeral services or merchandise.
(Source: P.A. 96‑879, eff. 2‑2‑10.)

    (225 ILCS 45/2)(from Ch. 111 1/2, par. 73.102)
    Sec. 2. (a) If a purchaser selects a trust arrangement to fund the pre‑need contract, all trust deposits as determined by Section 1b shall be made within 30 days of receipt.
    (b) A trust established under this Act must be maintained with a corporate fiduciary as defined in Section 1‑5.05 of the Corporate Fiduciary Act.
    (c) Trust agreements and amendments to the trust agreements used to fund a pre‑need contract shall be filed with the Comptroller.
    (d) (Blank).
    (e) A seller or provider shall furnish to the trustee and depositary the name of each payor and the amount of payment on each such account for which deposit is being so made. Nothing shall prevent the trustee from commingling the deposits in any such trust fund for purposes of its management and the investment of its funds as provided in the Common Trust Fund Act. In addition, multiple trust funds maintained under this Act may be commingled or commingled with other funeral or burial related trust funds if all record keeping requirements imposed by law are met.
    (f) (Blank).
    (g) Upon no less than 30 days prior notice to the Comptroller, the seller may change the trustee of the fund. Failure to provide the Comptroller with timely prior notice is an intentional violation of this Act.
    (h) A trustee shall at least annually furnish to each purchaser a statement containing: (1) the receipts, disbursements, and inventory of the trust, including an explanation of any fees or expenses charged by the trustee under Section 5 of this Act or otherwise, (2) an explanation of the purchaser's right to a refund, if any, under this Act, and (3) identifying the primary regulator of the trust as a corporate fiduciary under state or federal law.
(Source: P.A. 96‑879, eff. 2‑2‑10.)

    (225 ILCS 45/2a)
    Sec. 2a. Purchase of insurance or annuity.
    (a) If a purchaser selects the purchase of a life insurance policy or tax‑deferred annuity contract to fund the pre‑need contract, the application and collected premium shall be mailed within 30 days of signing the pre‑need contract.
    (b) If life insurance or an annuity is used to fund a pre‑need contract, the seller or provider shall not be named as the owner or beneficiary of the policy or annuity. No person whose only insurable interest in the insured is the receipt of proceeds from the policy or in naming who shall receive the proceeds nor any trust acting on behalf of such person or seller or provider shall be named as owner or beneficiary of the policy or annuity.
    (c) Nothing shall prohibit the purchaser from irrevocably assigning ownership of the policy or annuity used to fund a guaranteed price pre‑need contract to a person or trust for the purpose of obtaining favorable consideration for Medicaid, Supplemental Security Income, or another public assistance program, as permitted under federal law. The seller or contract provider may be named a nominal owner of the life insurance policy only for such time as it takes to immediately transfer the policy into a trust. Except for this purpose, neither the seller nor the contract provider shall be named the owner or the beneficiary of the policy or annuity.
    (d) If a life insurance policy or annuity contract is used to fund a pre‑need contract, except for guaranteed price contracts permitted in Section 4(a) of this Act, the pre‑need contract must be revocable, and any assignment provision in the pre‑need contract must contain the following disclosure in 12 point bold type:
    THIS ASSIGNMENT MAY BE REVOKED BY THE ASSIGNOR OR ASSIGNOR'S SUCCESSOR OR, IF THE ASSIGNOR IS ALSO THE INSURED AND DECEASED, BY THE REPRESENTATIVE OF THE INSURED'S ESTATE BEFORE THE RENDERING TO THE CEMETERY SERVICES OR GOODS OR FUNERAL SERVICES OR GOODS. IF THE ASSIGNMENT IS REVOKED, THE DEATH BENEFIT UNDER THE LIFE INSURANCE POLICY OR ANNUITY CONTRACT SHALL BE PAID IN ACCORDANCE WITH THE BENEFICIARY DESIGNATION UNDER THE INSURANCE POLICY OR ANNUITY CONTRACT.
    (e) Sales proceeds shall not be used to purchase life insurance policies or tax‑deferred annuities unless the company issuing the life insurance policies or tax‑deferred annuities is licensed with the Illinois Department of Insurance, and the insurance producer or annuity seller is licensed to do business in the State of Illinois.
(Source: P.A. 92‑419, eff. 1‑1‑02.)

    (225 ILCS 45/3)(from Ch. 111 1/2, par. 73.103)
    Sec. 3. Licensing.
    (a) No person, firm, partnership, association or corporation may act as seller without first securing from the State Comptroller a license to so act. Application for such license shall be in writing, signed by the applicant and duly verified on forms furnished by the Comptroller. Each application shall contain at least the following:
        (1) The full name and address (both residence and
     place of business) of the applicant, and every member, officer and director thereof if the applicant is a firm, partnership, association, or corporation, and of every shareholder holding more than 10% of the corporate stock if the applicant is a corporation;
        (2) A statement of the applicant's assets and
     liabilities;
        (3) The name and address of the applicant's
     principal place of business at which the books, accounts, and records shall be available for examination by the Comptroller as required by this Act;
        (4) The names and addresses of the applicant's
     branch locations at which pre‑need sales shall be conducted and which shall operate under the same license number as the applicant's principal place of business;
        (5) For each individual listed under item (1) above,
     a detailed statement of the individual's business experience for the 10 years immediately preceding the application; any present or prior connection between the individual and any other person engaged in pre‑need sales; any felony or misdemeanor convictions for which fraud was an essential element; any charges or complaints lodged against the individual for which fraud was an essential element and which resulted in civil or criminal litigation; any failure of the individual to satisfy an enforceable judgment entered against him based upon fraud; and any other information requested by the Comptroller relating to past business practices of the individual. Since the information required by this item (5) may be confidential or contain proprietary information, this information shall not be available to other licensees or the general public and shall be used only for the lawful purposes of the Comptroller in enforcing this Act;
        (6) The name of the trustee and, if applicable, the
     names of the advisors to the trustee, including a copy of the proposed trust agreement under which the trust funds are to be held as required by this Act; and
        (7) Such other information as the Comptroller may
     reasonably require in order to determine the qualification of the applicant to be licensed under this Act.
    (b) Applications for license shall be accompanied by a fidelity bond executed by the applicant and a surety company authorized to do business in this State or an irrevocable, unconditional letter of credit issued by a bank, credit union, or trust company authorized to do business in the State of Illinois, as approved by the State Comptroller, in such amount not exceeding $10,000 as the Comptroller may require. If, after notice and an opportunity to be heard, it has been determined that a licensee has violated this Act within the past 5 calendar years, the Comptroller may require an additional bond or letter of credit from the licensee from time to time in amounts equal to one‑tenth of such trust funds, which bond or letter of credit shall run to the Comptroller for the use and benefit of the beneficiaries of such trust funds.
    The licensee shall keep accurate accounts, books and records in this State, at the principal place of business identified in the licensee's license application or as otherwise approved by the Comptroller in writing, of all transactions, copies of all pre‑need contracts, trust agreements, and other agreements, dates and amounts of payments made and accepted thereon, the names and addresses of the contracting parties, the persons for whose benefit such funds are accepted, and the names of the depositaries of such funds. Each licensee shall maintain the documentation for a period of 3 years after the licensee has fulfilled his obligations under the pre‑need contract. Additionally, for a period not to exceed 6 months after the performance of all terms in a pre‑need sales contract, the licensee shall maintain copies of the contract at the licensee branch location where the contract was entered or at some other location agreed to by the Comptroller in writing. If an insurance policy or tax‑deferred annuity is used to fund the pre‑need contract, the licensee under this Act shall keep and maintain accurate accounts, books, and records in this State, at the principal place of business identified in the licensee's application or as otherwise approved by the Comptroller in writing, of all insurance policies and tax‑deferred annuities used to fund the pre‑need contract, the name and address of insured, annuitant, and initial beneficiary, and the name and address of the insurance company issuing the policy or annuity. If a life insurance policy or tax‑deferred annuity is used to fund a pre‑need contract, the licensee shall notify the insurance company of the name of each pre‑need contract purchaser and the amount of each payment when the pre‑need contract, insurance policy or annuity is purchased.
    The licensee shall make reports to the Comptroller annually or at such other time as the Comptroller may require, on forms furnished by the Comptroller. The licensee shall file the annual report with the Comptroller within 75 days after the end of the licensee's fiscal year. The Comptroller shall for good cause shown grant an extension for the filing of the annual report upon the written request of the licensee. Such extension shall not exceed 60 days. If a licensee fails to submit an annual report to the Comptroller within the time specified in this Section, the Comptroller shall impose upon the licensee a penalty of $5 for each and every day the licensee remains delinquent in submitting the annual report. The Comptroller may abate all or part of the $5 daily penalty for good cause shown. Every application shall be accompanied by a check or money order in the amount of $25 and every report shall be accompanied by a check or money order in the amount of $10 payable to: Comptroller, State of Illinois.
    The licensee shall make all required books and records pertaining to trust funds, insurance policies, or tax‑deferred annuities available to the Comptroller for examination. The Comptroller, or a person designated by the Comptroller who is trained to perform such examinations, may at any time investigate the books, records and accounts of the licensee with respect to trust funds, insurance policies, or tax‑deferred annuities and for that purpose may require the attendance of and examine under oath all persons whose testimony he may require. The licensee shall pay a fee for such examination in accordance with a schedule established by the Comptroller. The fee shall not exceed the cost of such examination. For pre‑need contracts funded by trust arrangements, the cost of an initial examination shall be borne by the licensee if it has $10,000 or more in trust funds, otherwise, by the Comptroller. The charge made by the Comptroller for an examination shall be based upon the total amount of trust funds held by the licensee at the end of the calendar or fiscal year for which the report is required by this Act and shall be in accordance with the following schedule:
Less than $10,000...................................no charge;
$10,000 or more but less than $50,000.....................$10;
$50,000 or more but less than $100,000....................$40;
$100,000 or more but less than $250,000...................$80;
$250,000 or more.........................................$100.
    The Comptroller may order additional audits or examinations as he or she may deem necessary or advisable to ensure the safety and stability of the trust funds and to ensure compliance with this Act. These additional audits or examinations shall only be made after good cause is established by the Comptroller in the written order. The grounds for ordering these additional audits or examinations may include, but shall not be limited to:
        (1) material and unverified changes or fluctuations
     in trust balances or insurance or annuity policy amounts;

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