§ 5-33.1-4 - Escrow accounts.
SECTION 5-33.1-4
§ 5-33.1-4 Escrow accounts. – (a) A licensed funeral service establishment shall deposit any money which theestablishment receives pursuant to a funeral service contract, within fifteen(15) days of its receipt of that money, in one or more escrow accountsestablished in accordance with the provisions of this section.
(b) Each escrow account established pursuant to this sectionshall be administered and maintained by the escrow agent who is designated bythe funeral service establishment which deposits money in the escrow accountand who may be the funeral director of the funeral service establishment.
(c) Assets held in escrow accounts established pursuant tothis section shall be invested in one or more of the following:
(1) Deposit accounts insured by the Federal Deposit InsuranceCorporation;
(2) Accounts insured against loss of principal by an agencyor instrumentality of the United States government;
(3) Bonds in which savings banks in this state may, by law,invest;
(4) Obligations of the United States or any agency of theUnited States or of any state or any municipality of any state;
(5) Credit unions insured by the National Credit UnionAdministration; or
(6) Any other deposit account, insurance contract, of aquality, safety, and expense comparable to those prescribed in this subsectionor in shares or units of beneficial interests of any open-end investmentcompany or association or investment trust which is registered under thefederal Investment Company Act of 1940, 15 U.S.C. § 80a-1 et seq.,provided that the company, association, or trust invests solely in investmentswhich are set forth in this subsection or repurchase agreements secured bythose investments.
(d) All interest, dividends, and other income earned on theamounts deposited in an escrow account pursuant to this section shall beretained in the escrow account and credited to the interests of those personsfor whose benefit the escrow account is maintained. Amounts in an escrowaccount shall be removed from that account only as provided in this chapter.The party designated as an escrow agent shall receive an annual statement fromthe financial institution responsible for the escrow account, of the amountcredited to the party's escrow account unless those statements are not normallyprovided by the financial institution in the ordinary course of business. Thestatement shall include the name and address of the escrow agent.
(e) If a purchaser of funeral services, property, ormerchandise defaults in making payments required under the terms of thecontract, or if the purchaser or the person responsible for making funeralarrangements for a deceased beneficiary fails to have the funeral serviceestablishment provide services, the funeral service establishment may retainany origination fee and any costs actually and reasonably incurred by theestablishment in the performance of the contract as liquidated damages;provided, that the sum of the amount retained as an origination fee and theamount retained to pay for costs incurred by the funeral establishment in theperformance of the contract shall not exceed an amount equal to five percent(5%) of the amount in the escrow account at the time the purchaser of funeralservices defaults in making the payments, or two hundred dollars ($200),whichever is greater. The balance of any amount remaining in the escrow accountshall be paid to the purchaser within fifteen (15) days of request for payment.
(f) A person, firm, or corporation licensed in accordancewith the provisions of chapter 33.2 of this title which enters into a funeralservice contract shall furnish the agent of an escrow account established inaccordance with the provisions of this section with the name of the purchaserof the services, and the address and name of the beneficiary of the funeralservice contract. Nothing in this section shall prohibit the commingling ofmore than one escrow account for the purchaser of the money received under morethan one funeral service contract for the purpose of management and investmentof funds in the escrow account.
(g) A funeral service contract shall provide that, if theparticular merchandise provided for in the contract is not available at thetime of death, the funeral service establishment shall furnish merchandiseequal or superior in quality of material and workmanship to the merchandiseprovided for in the contract.