§441-41  Investment of perpetual care funds
and pre-need trusts.  (a)  The investment of perpetual care funds and
pre-need trusts by a bank or trust company appointed as trustee shall be
governed by the standards prescribed in article 8 of chapter 412.



(b)  The investment of perpetual care funds and
pre-need trusts by a board of trustees shall be governed by the following
standards:



(1)  Funds may be invested in either:



(A)  An institution listed with the New York
Stock Exchange, that is a member of the Securities Investor Protection
Corporation (SIPC), and provides additional insurance coverage of $1,000,000
per account above and beyond the minimum cash and securities protected by the
Securities Investor Protection Corporation; or



(B)  An institution whose deposits are
federally insured.



(2)  Funds invested with an institution as provided in
section 441-41(b)(1) shall be insured on a cash basis by the institution for
the full amount of those funds. If the institution insures a portion of the
fund, the perpetual care and pre-need funeral authority shall acquire
additional insurance in the amount equal to or in excess of the funds held by
the institution.  The insurance shall be in full force and effect and shall not
lapse or be reduced below the full amount of the funds.  The perpetual care and
pre-need funeral authority shall immediately notify the director when the
insurance is not in conformity with the requirements stated herein.  Failure,
refusal, or neglect of a licensed cemetery and pre-need funeral authority to
maintain in full force and effect the insurance as required by this section
shall cause the automatic suspension of the license effective as of the date of
expiration or cancellation of the insurance.  The authority's license shall not
be reinstated until evidence of insurance as required in this section is
received by the director.  The director may assess a fee on the licensee not to
exceed $500 as a condition for the reinstatement of a suspended license,
pursuant to this section.  Failure to effect a reinstatement of a suspended
license within sixty days of the expiration of the requirement of licensing
shall cause it to be terminated, thereby forfeiting all license and biennial
renewal fees.  A licensee may, within fifteen days after receipt of the
notification of the license termination, request an administrative hearing
pursuant to chapter 91.



(3)  Investment by the board of trustees in an
institution described in section 441-41(b)(1)(A) shall be limited to stocks
which are either listed on a national securities exchange or traded
over-the-counter on the national market of the National Association of
Securities Dealers, Inc., Automated Quotation System.  Only the board of
trustees shall have the authority to make investment decisions.  No securities
salesperson shall be granted or allowed to have discretionary authority over
the account.



(4)  Investment of moneys designated for perpetual
care and pre-need services shall be held intact. [L 1967, c 199, pt of §1; HRS
§441-41; am L 1982, c 66, §8; am L 1985, c 101, §21; am L 1993, c 350, §22]