§ 58-60-35. Disclosure of prearrangement insurance policy provisions.
§58‑60‑35. Disclosure of prearrangement insurance policyprovisions.
(a) As used in thissection:
(1) "Prearrangement"means any contract, agreement, or mutual understanding, or any series orcombination of contracts, agreements or mutual understandings, whether fundedby trust deposits or prearrangement insurance policies, or any combinationthereof, which has for a purpose the furnishing or performance of specificfuneral services, or the furnishing or delivery of specific personal property,merchandise, or services of any nature in connection with the final dispositionof a dead human body, to be furnished or delivered at a time determinable bythe death of the person whose body is to be disposed of, but does not mean thefurnishing of a cemetery lot, crypt, niche, mausoleum, grave marker ormonument.
(2) "Prearrangementinsurance policy" means a life insurance policy, annuity contract, orother insurance contract, or any series of contracts or agreements in any formor manner, issued on a group or individual basis by an insurance companyauthorized by law to do business in this State, which, whether by assignment orotherwise, has for its sole purpose the funding of a specific preneed funeralcontract or a specific insurance‑funded funeral or burial prearrangement,the insured being the person for whose service the funds were paid.
(b) The followinginformation shall be adequately disclosed by the insurance agent or limitedrepresentative at the time an application is made, prior to accepting theapplicant's initial premium, for a prearrangement insurance policy:
(1) The fact that aprearrangement insurance policy is involved or being used to fund aprearrangement;
(2) The nature of therelationship among the insurance agent or limited representative, the providerof the funeral or cemetery merchandise or services, the administrator, and anyother person;
(3) The relationship ofthe prearrangement insurance policy to the funding of the prearrangement andthe nature and existence of any guarantees relating to the prearrangement;
(4) The effect on theprearrangement of (i) any changes in the prearrangement insurance policy,including but not limited to, changes in the assignment, beneficiarydesignation, or use of the policy proceeds; (ii) any penalties to be incurredby the insured as a result of failure to make premium payments; and (iii) anypenalties to be incurred or monies to be received as a result of cancellationor surrender of the prearrangement insurance policy;
(5) All relevantinformation concerning what occurs and whether any entitlements or obligationsarise if there is a difference between the policy proceeds and the amountactually needed to fund the prearrangement; and
(6) Any penalties orrestrictions, including geographic restrictions or the inability of theprovider to perform, on the delivery of merchandise, services, or theprearrangement guarantee. (1989, c. 738, s. 1; 1991, c. 644, s. 10; 1995, c.517, s. 32.)