46-1-206 - Sales of pre-need merchandise and services.
46-1-206. Sales of pre-need merchandise and services.
(a) Except as provided in this section, no cemetery company shall directly or indirectly offer to or enter into a contract for the sale of merchandise or services to be used or performed in connection with the interment or commemoration of a deceased human being, if delivery of the merchandise, other than for incidental additions, such as dates, scrolls, or other supplementary matter representing not more than ten percent (10%) of the total contract price, or performance of the services is to be made more than sixty (60) days after the receipt of any payment under the contract of sale. The provisions of this subsection (a) include, but are not limited to, the pre-need sales of merchandise and services.
(b) (1) If a cemetery company enters into a contract for the sale of merchandise or services that provides for delivery within sixty (60) days, and the cemetery company fails inexcusably to deliver merchandise or services within one hundred twenty (120) days after the receipt of any payment under the contract, the cemetery company shall deposit to a pre-need merchandise and services trust account or a pre-need trust account established pursuant to § 46-1-207 all moneys received under the contract.
(2) (A) For purposes of this part, delivery includes physical delivery of the merchandise to the buyer or the cemetery company has paid its supplier for the merchandise, the supplier has caused the merchandise to be manufactured and stored, and has caused certificate of ownership of the merchandise to be sent to the purchaser, and has agreed to ship the merchandise upon the purchaser's request of the cemetery company; provided, that the cemetery company set aside funds for the installation of the merchandise pursuant to § 46-1-207.
(B) For the purposes of this part, no person, firm or corporation will be deemed a supplier to a Tennessee cemetery company, unless it:
(i) Permanently and unalterably identifies all merchandise with the name of the contract beneficiary;
(ii) Submits, upon request of the commissioner, a report of all merchandise that has been purchased through a Tennessee cemetery company and has been placed in storage;
(iii) Permits the commissioner or the commissioner's designee, at any time, to examine stored merchandise that was purchased through a Tennessee cemetery company and to examine any document pertaining to the merchandise;
(iv) Submits evidence to the cemetery company of a bond insuring the existing and good title of any merchandise due any contract beneficiary purchased through a Tennessee cemetery company; and
(v) Submits evidence to the cemetery company ensuring that all merchandise purchased through a Tennessee cemetery company and being stored by the supplier is insured for casualty, theft or other loss.
(c) Nothing in this part shall be construed to apply to contracts for the sale of funeral merchandise and services, such contracts being regulated under title 62, chapter 5, and other general laws of this state.
[Acts 1979, ch. 307, § 4(A); T.C.A., § 46-2-202; Acts 1986, ch. 693, § 20; T.C.A. § 46-2-402; Acts 2006, ch. 1012, § 3.]