CHAPTER 13. PAYMENT OF FUNERAL, BURIAL SERVICES, OR MERCHANDISE IN ADVANCE OF NEED
IC 30-2-13
Chapter 13. Payment of Funeral, Burial Services, or Merchandise
in Advance of Need
IC 30-2-13-1
Applicability of chapter
Sec. 1. (a) Except as provided in subsection (b), this chapter
applies to any written agreement between a purchaser and a seller
that obligates the seller to provide prepaid services or merchandise,
or both, for a named individual in conjunction with the death,
funeral, burial, or final disposition of the individual.
(b) Except as provided in subsections (c) and (d), this chapter
does not apply to the following:
(1) Perpetual care funds under IC 23-14-48.
(2) The sale of burial rights. However, this chapter applies to
the sale of services or merchandise sold in conjunction with the
sale of burial rights and to the use of free or discounted burial
rights as an inducement for a purchaser to transfer sellers.
(3) A contract between a purchaser and a seller that requires
delivery of prepaid services or merchandise, or both, not later
than one (1) year after the date of final payment and for
circumstances other than death.
(c) The annual reporting requirements of section 31 of this chapter
apply to a perpetual care fund.
(d) The solicitation requirements of section 24 of this chapter and
the provisions concerning inducement in section 13(h) of this chapter
apply to the sale of burial rights.
As added by P.L.200-1991, SEC.1. Amended by P.L.207-1993,
SEC.25; P.L.120-1994, SEC.2; P.L.241-1995, SEC.2; P.L.114-1999,
SEC.1; P.L.14-2000, SEC.62.
IC 30-2-13-2
"Agent" defined
Sec. 2. As used in this chapter, "agent" means a person authorized
by a seller to offer, sell, or solicit the sale of a contract on behalf of
the seller and includes an employee or independent contractor of the
seller.
As added by P.L.200-1991, SEC.1.
IC 30-2-13-2.5
"At-need services and merchandise" defined
Sec. 2.5. (a) As used in this chapter, "at-need services and
merchandise" includes personal property or services:
(1) listed in section 8(1) of this chapter; and
(2) purchased after the time of death.
(b) The term does not include burial rights.
As added by P.L.207-1993, SEC.26.
IC 30-2-13-3
"Board" defined
Sec. 3. As used in this chapter, "board" refers to the state board of
funeral and cemetery service established by IC 25-15-9-1.
As added by P.L.200-1991, SEC.1.
IC 30-2-13-4
"Contract" defined
Sec. 4. As used in this chapter, "contract" means a written
agreement between a purchaser and a seller that:
(1) obligates the seller to provide prepaid services or
merchandise, or both, for a named individual; and
(2) becomes irrevocable thirty (30) days after the written
agreement is signed by the purchaser and seller.
As added by P.L.200-1991, SEC.1.
IC 30-2-13-5
"Delivery" defined
Sec. 5. As used in this chapter, "delivery" means the time when:
(1) services are performed in connection with the funeral or
other disposition of the purchaser or the individual for whom
services are to be provided under the contract;
(2) except for merchandise described in section 8(1)(A) and
8(1)(C) of this chapter, the merchandise is:
(A) in the possession of the purchaser or used for the
intended purpose of the merchandise; or
(B) permanently installed on or in cemetery property, the
burial rights to which have been transferred or granted to the
purchaser or individual for whose interment the merchandise
is to be used; or
(3) except for merchandise described in section 8(1)(A) and
8(1)(C) of this chapter, the merchandise is:
(A) purchased by the seller and stored in manufactured form,
in a manner and number equal to all merchandise sold, on
the premises where the merchandise is to be used or installed
and specifically identified in the name of the purchaser,
although any applicable installation or final finishing fees
remain subject to the terms of the contract made under this
chapter; or
(B) permanently identified with the name of the purchaser or
individual for whom the merchandise is to be provided and
delivered to a warehouse, with both title to the merchandise
and a warehouse receipt delivered to the purchaser, and
notification to and acceptance of delivery acknowledged in
writing by the purchaser.
As added by P.L.200-1991, SEC.1. Amended by P.L.241-1995,
SEC.3; P.L.236-1995, SEC.52; P.L.114-1999, SEC.2.
IC 30-2-13-6
"Fund" defined
Sec. 6. As used in this chapter, "fund" refers to the preneed
consumer protection fund established by section 28 of this chapter.
As added by P.L.200-1991, SEC.1.
IC 30-2-13-7
"Insurance policy" defined
Sec. 7. As used in this chapter, "insurance policy" means a policy
providing one (1) or more of the types of insurance described in
IC 27-1-5-1, Class 1(a) and Class 1(c).
As added by P.L.200-1991, SEC.1.
IC 30-2-13-8
"Prepaid services or merchandise" or "services or merchandise"
defined
Sec. 8. As used in this chapter, "prepaid services or merchandise"
or "services or merchandise" includes personal property or services:
(1) typically sold or provided in connection with the final
disposition or memorialization of human remains, including:
(A) caskets or other primary containers, including rental,
temporary, or disposable caskets or containers;
(B) outer burial containers;
(C) cremation or transportation containers;
(D) funeral clothing or accessories;
(E) monuments;
(F) grave markers;
(G) cremation urns;
(H) embalming services;
(I) funeral directing services provided at the time of death
and in connection with the final disposition of human
remains;
(J) final date carving fees, including carving fees for double
monuments;
(K) cremation;
(L) cremation services;
(M) other funeral and burial items, including items of
service or merchandise that may be rented or leased; and
(N) services or merchandise otherwise described as cash
advance items under section 11.5 of this chapter and sold
directly by the seller and not provided by a third person; and
(2) purchased in advance of need to be provided or delivered
after the death of the purchaser or individual for whom services
or merchandise are to be provided in the contract.
As added by P.L.200-1991, SEC.1. Amended by P.L.207-1993,
SEC.27; P.L.241-1995, SEC.4; P.L.114-1999, SEC.3.
IC 30-2-13-9
"Purchaser" defined
Sec. 9. (a) Except as provided in subsection (b), as used in this
chapter, "purchaser" means a person or firm contracting with a seller
for services or merchandise to be provided or delivered for a named
individual.
(b) As used in section 13(b) of this chapter, "purchaser" means:
(1) the person named in a United States Department of Defense
form "Record of Emergency Data" (DD Form 93) or a successor
form adopted by the United States Department of Defense, if
the decedent died while serving in any branch of the United
States Armed Forces (as defined in 10 U.S.C. 1481) and
completed the form.
(2) an individual granted the authority in a funeral planning
declaration executed by the decedent under IC 29-2-19;
(3) an individual described in subsection (a);
(4) the attorney in fact, appointed under IC 30-5, of an
individual described in subsection (a);
(5) the guardian, appointed under IC 29-3, of an individual
described in subsection (a); or
(6) if an individual described in subsection (a) is deceased:
(A) the surviving spouse of the individual;
(B) if there is no surviving spouse, the adult children of the
individual;
(C) if there is no surviving spouse or surviving adult child,
the surviving parent or parents of the individual; or
(D) if there is neither a surviving spouse nor adult children,
nor a surviving parent, the personal representative (as
defined in IC 29-1-1-3) of the individual.
As added by P.L.200-1991, SEC.1. Amended by P.L.207-1993,
SEC.28; P.L.114-1999, SEC.4; P.L.143-2009, SEC.17;
P.L.101-2010, SEC.5.
IC 30-2-13-10
"Seller" defined
Sec. 10. As used in this chapter, "seller" means a person doing
business as a sole proprietor, a firm, a limited liability company, a
corporation, an association, or a partnership contracting to provide
services or merchandise, or both, to a named individual.
As added by P.L.200-1991, SEC.1. Amended by P.L.8-1993,
SEC.468; P.L.114-1999, SEC.5.
IC 30-2-13-11
"Trustee" or "escrow agent, acting as a fiduciary" defined
Sec. 11. (a) As used in this chapter, "trustee" or "escrow agent,
acting as a fiduciary", means a:
(1) bank;
(2) trust company;
(3) savings association; or
(4) credit union;
that maintains an office in Indiana and is qualified under state or
federal law to serve as a trustee or escrow agent, acting as a
fiduciary.
(b) For a contract using a life insurance policy as consideration,
the term also includes a life insurance company or other entity that
establishes a trust for the purposes of holding and administering life
insurance policies issued by an insurance company to fund contracts
under this chapter. Notwithstanding any other law to the contrary, a
life insurance company or other entity acting as a trustee shall
comply with this chapter.
(c) For a contract using a previously issued life insurance policy
as consideration, the seller is considered to be a qualified trustee if
ownership is irrevocably assigned to the seller in conjunction with an
assignment of death benefits.
As added by P.L.200-1991, SEC.1. Amended by P.L.241-1995,
SEC.5; P.L.79-1998, SEC.94; P.L.114-1999, SEC.6.
IC 30-2-13-11.5
"Cash advance item" defined
Sec. 11.5. (a) As used in this chapter, "cash advance item" means
an item of property, or services, or merchandise that is not sold
directly by a seller and is described to a purchaser as one (1) of the
following:
(1) A cash advance.
(2) An accommodation.
(3) A cash disbursement.
(4) An estimated future charge by a third party.
(5) A similar term.
(b) The term also refers to a service or property obtained from a
third party for which the seller collects an estimated payment to be
held in trust or escrow until services or merchandise subject to a
contract are delivered because the cost of the service or property can
only be estimated at the time the contract is made.
(c) Cash advance items include the following:
(1) Cemetery or crematory services.
(2) Pallbearers.
(3) Public transportation.
(4) Clergy honoraria.
(5) Flowers.
(6) Musicians or singers.
(7) Nurses.
(8) Obituary notices.
(9) Gratuities.
(10) Death Certificates.
(11) Sales tax.
(12) Foreign language interpreters.
(13) Religious commemorative services.
(14) Fees charged for the following:
(A) Interment.
(B) Opening and closing of a grave or crypt.
(d) If property or services are not cash advance items under this
section, they are services or merchandise under section 8 of this
chapter.
As added by P.L.114-1999, SEC.7.
IC 30-2-13-12
Contracts
Sec. 12. (a) This section applies to contracts for prepaid services
or merchandise, or both, entered into under this chapter before
January 1, 1996.
(b) A purchaser may enter into more than one (1) contract under
this chapter for prepaid services or merchandise, or both. Each
contract may be funded with cash, either in a lump sum or
installment payments, or an insurance policy, or both. The purchaser
may revoke the contract if the purchaser sends the seller written
notice of the revocation within thirty (30) days after the contract is
signed by the purchaser and seller. If a purchaser revokes a contract
the seller shall refund to the purchaser, without interest, all property
used to fund the contract. If the seller receives payment of at least
five hundred dollars ($500) in cash that must ultimately be placed in
trust or escrow under this section, the seller shall, not more than five
(5) days after receiving the payment, deposit the payment in escrow
pending irrevocable deposit to trust or escrow authorized by
IC 30-2-10. Thirty (30) days after the contract is signed all property
paid or delivered to the seller to fund each contract shall be
irrevocably deposited by the seller to trust or escrow authorized by
either IC 30-2-10 or IC 23-14-49-1. All property received for services
or merchandise sold by a seller licensed under IC 25-15 shall be
irrevocably deposited to trust in compliance with IC 30-2-10. All
sellers shall guarantee the provision of all services and merchandise
sold under a contract authorized by this chapter.
(c) If a contract under this chapter is funded with an insurance
policy, the ownership of the insurance policy must be irrevocably
assigned to a trustee. The seller may not borrow against, pledge,
withdraw, or impair the cash value of the policy.
(d) A finance charge may be assessed on a contract sold on an
installment basis, and the seller shall disclose to the purchaser all the
applicable requirements under federal and state law.
(e) A seller or successor seller who has accepted cash or an
insurance policy, or both, as full payment of a contract under
subsection (b), is responsible for providing all contracted prepaid
services and merchandise if the insurance company or trust company
used to fund the contract is insolvent.
(f) A purchaser who purchases a contract with cash in a lump sum
or through an insurance contract shall make the payment for the
contract payable only to the seller. A purchaser who purchases a
contract with cash in installments may make payments for the
contract to the seller.
As added by P.L.200-1991, SEC.1. Amended by P.L.1-1992,
SEC.159; P.L.207-1993, SEC.29; P.L.120-1994, SEC.3;
P.L.241-1995, SEC.6; P.L.52-1997, SEC.52.
IC 30-2-13-12.1
Contracts entered into after December 31, 1995, and before July 1,
1999
Sec. 12.1. (a) This section applies to contracts for prepaid services
or merchandise, or both, entered into under this chapter after
December 31, 1995, and before July 1, 1999.
(b) A purchaser may enter into more than one (1) contract under
this chapter for prepaid services or merchandise, or both. Each
contract may be funded with cash, either in a lump sum or
installment payments, or an insurance policy, or both. The purchaser
may revoke the contract if the purchaser sends the seller written
notice of the revocation within thirty (30) days after the contract is
signed by the purchaser and seller. If a purchaser revokes a contract,
the seller shall refund to the purchaser, without interest, all property
used to fund the contract. If the seller receives payment of at least
five hundred dollars ($500) in cash that must ultimately be placed in
trust or escrow under this section, the seller shall, not more than five
(5) days after receiving the payment, deposit the payment in escrow
pending irrevocable deposit to trust or escrow authorized by either
subsection (h) or (i). Thirty (30) days after the contract is signed all
property paid or delivered to the seller to fund each contract shall be
irrevocably deposited by the seller to trust or escrow authorized by
either subsection (h) or (i). Except for installment contracts funded
with cash and contracts funded with a newly issued insurance policy
that has a limited or qualified death benefit period, all sellers shall
guarantee the provision of all services and merchandise sold under
a contract authorized by this chapter. At delivery, a seller may not
impose additional charges to recover a difference between the
original contract retail prices or current retail prices for services and
merchandise that are sold under the contract, whichever is greater,
and the amount on deposit in trust or escrow.
(c) If a contract under this chapter is funded with an insurance
policy, the ownership of the insurance policy must be irrevocably
assigned to a trustee. The seller may not borrow against, pledge,
withdraw, or impair the cash value of the policy.
(d) A finance charge may be assessed on a contract sold on an
installment basis, and the seller shall disclose to the purchaser all the
applicable requirements under federal and state law.
(e) A seller or successor seller who has accepted cash or an
insurance policy, or both as full payment of a contract under
subsection (b) is responsible for providing all contracted prepaid
services and merchandise if the insurance company or trust company
used to fund the contract is insolvent.
(f) A purchaser who purchases a contract with cash or through an
insurance contract shall make the payment for the contract payable
only to the seller or insurer, respectively.
(g) A seller may not accept or deposit to trust or escrow cash, an
insurance policy, or any other property as consideration for services
or merchandise to be provided in the future except in connection
with a contract authorized by this chapter.
(h) A trust account authorized and established under this chapter
must:
(1) be irrevocable and require the seller to deposit to trust all
sums or property received from the purchaser;
(2) designate the seller as settlor and the seller as beneficiary;
(3) designate a trustee qualified under this chapter and authorize
the trustee to charge a reasonable fee for services;
(4) require that a separate account be maintained in the name of
each purchaser;
(5) require that interest earned on the account be added to the
principal and reinvested;
(6) permit assets of the separate accounts of several purchasers
to be commingled for investment; and
(7) require that on delivery of services or merchandise the
trustee shall remit to the seller the amount on deposit in the
purchaser's trust.
Upon full delivery of all services and merchandise under the
contract, if the amount on deposit in the trust is greater than the
seller's total current retail price of all services and merchandise under
the contract, the remaining amount may but need not be returned to
the individual, if any, designated by the purchaser to receive the
remainder, or to the purchaser's estate.
(i) An escrow account authorized and established under this
chapter must:
(1) be irrevocable and require the seller to deposit to escrow all
sums or property received from the purchaser;
(2) designate the seller as settlor and beneficiary;
(3) designate a trustee qualified under this chapter and authorize
the trustee to charge a reasonable fee for services;
(4) require that the escrow account be maintained in the name
of the seller and serve as a depository for all cash or other
property received by the seller to fund contracts sold by the
seller;
(5) permit the commingling of cash for investment;
(6) permit the seller to withdraw from the escrow account the
current retail value of prepaid services or merchandise delivered
under this chapter; and
(7) permit any interest earned or appreciation in value of money
or other property deposited in escrow to be paid to the seller not
more frequently than monthly, to the extent that the total value
of the escrow account after a payment under this subdivision is
not less than the current retail value of all services and
merchandise under the contracts that remain undelivered.
(j) A trust account or an escrow account established under this
chapter:
(1) must include the provisions set forth in either subsection (h)
or (i);
(2) may be included as an integral part of a seller's contract
through the execution of an adoption agreement that references
the trust account or escrow account; and
(3) is not required to be represented by a separate trust or
escrow document for each contract.
(k) The entire value of an irrevocable trust or an escrow
established under this chapter may not be considered as a resource in
determining a person's eligibility for Medicaid under IC 12-15-2-17.
(l) A contract for prepaid services or merchandise, or both,
entered into after June 30, 1997, must contain a statement that:
(1) the purchaser may revoke the contract under subsection (b)
within thirty (30) days after the contract is signed; and
(2) after thirty (30) days, the contract is irrevocable.
(m) This chapter does not prohibit a purchaser from immediately
making the trust or escrow required under this chapter irrevocable
and assigning ownership of an insurance policy used to fund a
contract to obtain favorable consideration for Medicaid,
Supplemental Security Income, or another public assistance program
under federal or state law.
As added by P.L.241-1995, SEC.7. Amended by P.L.113-1996,
SEC.2; P.L.195-1997, SEC.1; P.L.114-1999, SEC.8.
IC 30-2-13-12.5
Contracts entered into after June 30, 1999
Sec. 12.5. (a) This section applies to the following contracts
entered into or established under this chapter after June 30, 1999:
(1) Contracts for prepaid services.
(2) Contracts for prepaid merchandise.
(3) Trusts or escrows established to hold consideration paid for
services or merchandise subject to a contract entered into under
this chapter.
(b) A contract between a purchaser and a seller must:
(1) specify that the consideration for the contract is:
(A) cash, payable either in a lump sum or in installments; or
(B) an insurance policy that is:
(i) newly issued in conjunction with and integral to the
contract;
(ii) issued previously in a transaction separate and distinct
from the contract; or
(iii) both.
If a contract is funded with an insurance policy, the
ownership of the policy must be irrevocably assigned to a
trustee, and the seller may not borrow against, pledge,
withdraw, or impair the cash value of the policy;
(2) specify that only the purchaser, acting by written notice to
the seller, may revoke the contract within thirty (30) days after
the date the contract is signed by the purchaser and the seller
and that the contract becomes irrevocable upon the expiration
of the thirty (30) day period;
(3) specify that, if the contract is revoked, the seller shall refund
and return to the purchaser, without interest, the cash or
insurance policy used to fund the contract;
(4) specify that not more than thirty (30) days after the contract
is signed by the purchaser and the seller, the whole of the cash
or insurance policy serving as consideration for the contract
must be deposited into a trust or escrow authorized by
subsection (c) or (d). However, a seller may elect to serve as
trustee of a previously existing life insurance contract;
(5) except as provided in subsection (f), unconditionally require
that the seller shall deliver all services or merchandise, or both,
specified in the contract and receive as consideration for the
delivery of services or merchandise, or both, only the cash or
insurance policy held in trust or escrow without regard to the
solvency of the insurer or the adequacy or loss in value of any
cash deposit or insurance policy used to fund a contract;
(6) except as provided in subsection (f), prohibit a seller from
imposing additional charges to recover any shortage or
difference between the retail prices for services or merchandise,
or both, in effect on the date of delivery of the services or
merchandise, or both, and the value of the trust or escrow
applicable to the contract on the date of delivery;
(7) require that a seller accepting the transfer of a contract
permitted under section 13 of this chapter shall honor the
requirements and obligations of the contract;
(8) permit the seller to assess a finance charge on a contract
sold on an installment basis and require that the seller disclose
to the purchaser the applicable requirements of federal and
Indiana law;
(9) provide that the contract must comply with the following
requirements:
(A) The contract must be made in a form that is:
(i) written in clear and understandable language; and
(ii) printed in a size and style of type that is easy to read.
(B) The contract must describe the services, merchandise, or
cash advance items being purchased. If the merchandise or
cash advance items include a vault (as defined in
IC 23-14-33-33) that:
(i) will be used to encase the remains of a deceased
individual; and
(ii) is not airtight and watertight;
the contract must include a written statement indicating that
the vault is not airtight and watertight.
(C) The contract must identify the following by name,
address, and telephone number:
(i) The seller.
(ii) The purchaser.
(iii) The contract beneficiary if the beneficiary is an
individual other than the purchaser.
(D) The contract must contain the seller's certificate of
authority number and the date of the contract.
(E) The contract must provide that if an item of the
particular services or merchandise specified in the contract
is unavailable at the time of delivery, the seller shall deliver
services or merchandise similar in style, quality, and of
equal value to the unavailable item in the place of the item.
(F) The contract must disclose the precise manner in which
the contract is to be funded by:
(i) identifying the consideration for the contract;
(ii) identifying the name, number, if known, and issuer of
any insurance policy used to fund the contract; and
(iii) including the identity and location of the trustee or
escrow agent, acting as fiduciary, who is to hold the trust
or escrow.
(G) The contract must disclose that the seller reserves the
right to assess an extra charge for:
(i) transportation costs;
(ii) services or merchandise incurred in the transport of
human remains a distance greater than twenty-five (25)
miles from the seller's place of business; and
(iii) service charges necessarily incident to the transport of
human remains and in excess of those service charges
specified in the contract.
(H) The contract must disclose the following:
(i) The amount, if any, the seller has elected to receive
under subsection (c)(1) or subsection (d)(6).
(ii) That a commission or fee may be paid to the seller or
the seller's agent on a contract funded under subsection
(b)(1)(B)(i).
(10) specify that a purchaser has the unrestricted right to
designate one (1) or more successor sellers to whom the
contract may be transferred under section 13 of this chapter, but
that such a transfer is effective only with the consent of the
newly designated seller and upon the fulfillment of the other
requirements of section 13 of this chapter;
(11) specify that if cash advance items are funded in the
contract, the seller agrees to deliver the cash advance items
under one (1) of the following alternatives:
(A) Delivery is unconditionally guaranteed at the option of
the seller.
(B) Delivery is conditionally guaranteed for a seller and will
be equal in value to the total value of the trust or escrow
account maintained for the purchaser multiplied by the
percentage of the total original contract price represented by
cash advance items;
(12) specify that a release from trust or escrow shall occur only
upon the seller's delivery of services or merchandise, or both;
(13) permit, at the option of the seller, the incorporation of the
trust or escrow language contained in subsection (c) or (d)
directly into the contract;
(14) prohibit the seller from charging any service, transaction,
or other type of fee or charge unless the fee is:
(A) authorized under subsections (c)(1) and (d)(6) and
section 27 of this chapter; or
(B) included within the definitions contained in section 8 or
11.5 of this chapter.
(c) A trust account authorized and established under this chapter
must do all of the following:
(1) Be irrevocable and require either of the following:
(A) The seller deposit the insurance policy used to fund the
contract into the trust account. However, for contracts
funded after June 30, 1995, with a previously issued
insurance policy, the seller may serve instead of a trustee if
the seller is qualified to do so under section 11(c) of this
chapter.
(B) The seller deposit the cash used to fund the contract into
the trust account. However, as consideration for the sale of
the contract and any expense incurred by the seller in
conjunction with the sale of the contract, the contract must
permit the seller to notify, within a ten (10) day period
following the date the contract becomes irrevocable, the
trustee of its election to receive only up to ten percent (10%)
of the seller's original contract price for services or
merchandise, or both.
(2) Designate the seller as the beneficiary of the trust.
(3) Designate a trustee qualified under this chapter and
authorize the trustee to assess the charges authorized under
section 18 of this chapter.
(4) Require that a separate account be maintained in the name
of each purchaser.
(5) Require that any interest, dividend, or accumulation in the
account be reinvested and added to the principal.
(6) Permit the assets of the several, separate accounts to be
commingled for investment purposes.
(7) Require that on receipt of the seller's proof of delivery of
services or merchandise the trustee shall remit to the seller the
full amount in trust applicable to the purchaser's contract and all
of the accumulated interest.
(8) Permit the seller to retain the remaining amount if the
amount in the trust account is greater than the seller's total
current retail price of all services and merchandise subject to
the contract at the time of delivery of all services or
merchandise subject to the contract. However, in the case of a
contract funded under subsection (b)(1)(B)(ii), the seller may
not retain the remaining amount but must pay the remaining
amount to the entity or individual designated by the insured as
the beneficiary of the death benefit proceeds not later than sixty
(60) days after the receipt and deposit of the proceeds by the
seller. The seller may not qualify as a beneficiary of the
remaining amount or the insurance death benefit. In the case of
all other contracts funded under this chapter, the seller may opt
to return the remaining amount to the individual designated by
the purchaser to receive the remainder or to the purchaser's
estate.
(d) An escrow account authorized and established under this
chapter must do all of the following:
(1) Be irrevocable and require that the seller deposit all cash or
the insurance policy used to fund the contract into the escrow
account.
(2) Designate the seller as the recipient of the escrow funds.
(3) Designate an escrow agent, acting as fiduciary, qualified
under this chapter to act as escrow agent acting as fiduciary and
authorize the escrow agent acting as fiduciary to assess the
charges authorized under section 18 of this chapter.
(4) Require that the escrow account be maintained in the name
of the seller and serve as a depository for all cash or insurance
policies used to fund contracts sold by the seller.
(5) Permit the investment of and commingling of cash for
investment purposes.
(6) Permit the seller to receive an administrative or service fee
at the option of the seller. The seller may opt to receive the fee
after the day following the date the contract becomes
irrevocable. The amount of the fee may not exceed ten percent
(10%) of the seller's total contract price for services or
merchandise or both.
(7) Require that on delivery of services or merchandise, the
escrow agent shall remit to the seller an amount equal to:
(A) the seller's original retail price as set forth in the contract
for the services or merchandise delivered; minus
(B) the amount, if any, received by the seller under
subdivision (6).
(8) Permit the seller to receive monthly payments of the interest
earned and the appreciation in the value of the escrow assets to
the extent that the total value of the escrow after a payment
authorized under this subdivision is not less than:
(A) the original contract value of all services or merchandise
under the contracts, or parts of the contracts that remain
undelivered; minus
(B) the amounts, if any, received by the seller under
subdivision (6).
(e) A trust account or an escrow account established under this
section must contain a concise written description of all the
provisions of this chapter that apply to the account.
(f) A seller's guarantee of delivery of all services or merchandise
subject to a contract sold by the seller or transferred to a seller is
unconditional except in the instance of one (1) of the following
circumstances:
(1) An installment contract funded with cash or an insurance
policy issued in conjunction with the contract is guaranteed to
the extent of the cash paid or death benefits available at the time
of death of the individual for whom services or merchandise are
to be provided.
(2) A contract funded with an insurance policy issued
previously and not in conjunction with the contract is
guaranteed to the extent of the death benefit proceeds available
at the time of the individual for whom services or merchandise
are to be provided.
(3) A contract funded with an insurance policy issued in
conjunction with the contract, but having a limited or qualified
death benefit period, is guaranteed to the extent of the death
benefit proceeds available at the time of the death of the
individual for whom services or merchandise are to be
provided.
(4) A transportation expense incurred by the seller while
transporting human remains a distance greater than twenty-five
(25) miles from the seller's place of business, plus any charge
for services or merchandise necessarily incident to the transport
of the human remains.
(5) The seller agrees to conditionally guarantee the delivery of
cash advance items under subsection (b)(11)(B).
In the instance of unguaranteed delivery, the seller may reduce the
value or number of the services or merchandise subject to the
contract or cash advance items delivered or deliver the services or
merchandise in full on the condition that the seller receives adequate
consideration to compensate the seller for the unguaranteed part of
the contract.
(g) The entire value of an escrow or trust established under this
chapter may not be considered as a resource in determining a
person's eligibility for Medicaid under IC 12-15-2-17.
(h) This chapter does not prohibit a purchaser from immediately
making the trust or escrow required under this chapter irrevocable
and assigning ownership of an insurance policy used to fund a
contract to obtain favorable consideration for Medicaid,
Supplemental Security Income, or another public assistance program
under federal or state law.
(i) A seller may not accept or deposit into a trust or escrow
account cash, an insurance policy, or any other property as
consideration for services or merchandise to be provided in the future
except in conjunction with a contract authorized by this chapter.
As added by P.L.114-1999, SEC.9. Amended by P.L.76-2000, SEC.1;
P.L.61-2008, SEC.7.
IC 30-2-13-13
Designation of successor sellers
Sec. 13. (a) Notwithstanding section 10 of this chapter, as used in
this section, "seller" means an individual, a person doing business as
a sole proprietor, a firm, a corporation, an association, a limited
liability company, or a partnership:
(1) contracting to provide prepaid or at-need services or
merchandise, or both, to a named individual; and
(2) holding a certificate of authority under this chapter.
(b) A purchaser has the option to designate one (1) or more
successor sellers to provide:
(1) prepaid services or merchandise; or
(2) at-need services or merchandise.
A purchaser who exercises the purchaser's option to designate a
successor seller shall give written notice of the designation to the
currently designated seller, successor seller, and trustee or escrow
agent. Only a purchaser may exercise the option to designate a new
seller. However, the designation is ineffective unless the newly
designated seller consents to the designation.
(c) If a purchaser designates a successor seller, and the successor
seller consents to the designation, not less than thirty (30) days after
receiving notice under subsection (b), the seller who was previously
designated shall:
(1) relinquish and transfer all rights under the contract;
(2) transfer to the successor the contract; and
(3) release from trust or escrow for subsequent deposit to the
successor seller's trust or escrow all property being held as
consideration for the contract, together with an itemized
statement disclosing all services or merchandise delivered as of
the date of transfer.
However, a seller who was previously designated to provide the
services or merchandise shall comply with section 30 of this chapter.
The seller and the successor sellers shall cooperate to ensure that
there is no forfeiture or loss of a right or benefit under the contract
and that all contract terms are fulfilled. If similar prepaid or at-need
services or merchandise are purchased from one (1) or more sellers,
the contract that is first in time prevails and is valid.
(d) The trustee shall confirm the transfer to the seller, successor
seller, and purchaser by written notice confirming the identity and
value of the property transferred.
(e) It is a violation of this chapter for a seller to knowingly induce
a purchaser to breach an existing contract that provides for prepaid
or at-need services or merchandise.
(f) This section does not abrogate the requirements of IC 25-15-4
concerning contracting for or delivering at-need services and
merchandise.
(g) It is a violation of this chapter for a seller to knowingly:
(1) induce a purchaser who has the right to designate a
successor seller under subsection (b) to:
(A) make a designation of a successor seller;
(B) breach an existing contract for prepaid or at-need
services or merchandise; or
(C) enter into an at-need or prepaid contract calling for the
delivery of similar services or merchandise; or
(2) offer a monetary inducement or the exchange or substitution
of free or discounted services or merchandise in an effort to
induce a purchaser to effect a change in the designation of a
seller of prepaid or at-need services or merchandise.
(h) It is a violation of this chapter for a seller to provide free or
discounted burial rights:
(1) as an inducement or as consideration for the transfer of a
contract; or
(2) in an effort to induce a purchaser to effect a change in the
designation of a seller of prepaid or at-need services or
merchandise.
As added by P.L.200-1991, SEC.1. Amended by P.L.207-1993,
SEC.30; P.L.120-1994, SEC.4; P.L.241-1995, SEC.8; P.L.114-1999,
SEC.10; P.L.76-2000, SEC.2; P.L.61-2008, SEC.8.
IC 30-2-13-14
Conversion of trust or escrow agreement; change in method of
funding; new or successor trustee or escrow agent
Sec. 14. (a) A trust or an escrow agreement created under:
(1) IC 23-14-49-1;
(2) IC 30-2-9; or
(3) IC 30-2-10;
may not be converted to a trust or an escrow agreement required by
section 12 or 12.5 of this chapter.
(b) A contract that has been funded with cash may not
subsequently be changed to be funded with an insurance policy.
(c) A contract that has been funded with an insurance policy may
not subsequently be changed to be funded with cash.
(d) Unless a transaction occurs under section 15(a)(4) of this
chapter or the provisions of the contract permit otherwise, a new or
successor trustee or escrow agent may not qualify and serve as
trustee or escrow agent without the written consent of the purchaser
and the seller designated to provide services or merchandise subject
to a contract under this chapter.
As added by P.L.200-1991, SEC.1. Amended by P.L.241-1995,
SEC.9; P.L.52-1997, SEC.53; P.L.114-1999, SEC.11.
IC 30-2-13-15
Loss of certificate of authority or license by seller; notice to
purchaser; selection of new seller; transfer of unperformed
contracts and funds to successor owner
Sec. 15. (a) If a seller:
(1) ceases to have a certificate of authority or loses a
professional license required to provide services under this
chapter;
(2) ceases to exist or operate;
(3) is incapable of performing the seller's obligations under an
unperformed contract for any reason; or
(4) sells or leases the seller's business, facilities, or assets;
the seller shall give notice to the board and to each purchaser for
whom funds are held in a trust or escrow under this chapter. The
notice shall specify the reason for the issuance of the notice.
(b) The seller's written notice under subsection (a) must be:
(1) addressed to the purchaser's last known address; and
(2) mailed within fifteen (15) days after the seller becomes
incapable of performing the obligations under the contract.
(c) A purchaser who receives a notice under subsection (a) has
thirty (30) days after the date the notice was mailed by the seller to
select and designate a new seller under section 13 of this chapter to
become the beneficiary of the trust or the designated recipient of the
escrow funds. The first seller shall send written notice of the
designation of a new seller to the newly designated seller or to the
trustee.
(d) A seller shall transfer all unperformed contracts and funds
held in trust or escrow under this chapter to the seller who is the
successor owner or lessee of the transferring seller. The successor
seller shall perform all contracts transferred under this subsection.
(e) If:
(1) the seller fails to comply with subsection (a)(1), (a)(2), or
(a)(3); or
(2) a purchaser fails to designate a new seller;
the designation shall be made by the board.
As added by P.L.200-1991, SEC.1. Amended by P.L.241-1995,
SEC.10; P.L.114-1999, SEC.12; P.L.177-2009, SEC.60.
IC 30-2-13-16
Sale, consolidation, merger, disposal, or lease of assets in bulk;
designation of successor
Sec. 16. (a) Except for sales of stock or merchandise in the
ordinary course of the seller's business, a seller who has deposited
money or an insurance policy under section 12 or 12.5 of this chapter
may not:
(1) sell, consolidate, merge, or dispose of assets; or
(2) lease the seller's business, facilities, or assets;
without providing, as an integral part of the transaction or
occurrence, for the designation of a successor seller of the money or
insurance policy placed in trust. For purposes of this section, a
change in control determines the seller's obligation.
(b) If a seller acting as a trustee of an insurance policy fails to
designate a qualified successor seller, the board shall make the
designation. However, the designated successor must be willing to
accept the designation.
(c) This section does not restrict a purchaser's right to designate
a new seller in accordance with section 13 of this chapter.
As added by P.L.200-1991, SEC.1. Amended by P.L.241-1995,
SEC.11; P.L.114-1999, SEC.13.
IC 30-2-13-17
Successors to seller; obligations
Sec. 17. A seller may not sell the seller's stock, business, or assets,
transfer assets, merge or consolidate, in whole or in part, or sell,
transfer, or consolidate contracts unless:
(1) the purchaser of the stock, business, or assets or the
successor in interest is liable for shortages in a trust under this
chapter existing before or after the sale, however, the purchaser
or successor in interest has no obligation to cure a shortage in
a contract between the seller and the purchaser that is not
performed by the purchaser or successor in interest; or
(2) the purchaser of the stock, business, or assets or the
successor in interest will perform all obligations imposed under
this chapter, all obligations imposed under contracts between
the seller and the purchaser, and any other related obligations.
As added by P.L.200-1991, SEC.1.
IC 30-2-13-18
Compensation and expenses of trustee; withdrawal of tax liability
Sec. 18. A trustee or an escrow agent may be reimbursed for
necessary expenses and be paid reasonable compensation for those
services from the trust or escrow. A trustee or an escrow agent shall
also be permitted to withdraw from trust or escrow any federal or
state tax liability assessed against the purchasers' interest in the trust
or escrow.
As added by P.L.200-1991, SEC.1. Amended by P.L.114-1999,
SEC.14.
IC 30-2-13-19
Common trust fund
Sec. 19. (a) A trustee may place trust money in a common or
commingled trust fund under a single trust instrument.
(b) A trustee shall maintain a separate accounting record for each
seller who deposits funds in a trust.
(c) Except for trusts established under IC 30-2-10, records
maintained under this section do not need to be segregated on a
purchaser by purchaser basis.
As added by P.L.200-1991, SEC.1.
IC 30-2-13-20
Funeral service contracts; ratification by funeral director
Sec. 20. If an agent and a purchaser execute a contract covering
funeral services (as defined in IC 25-15), the contract is valid only if
the contract is ratified by a funeral director licensed under IC 25-15
who is directly affiliated with the seller as an agent when the contract
is made. A contract ratified by an unaffiliated licensed funeral
director is void.
As added by P.L.200-1991, SEC.1. Amended by P.L.114-1999,
SEC.15.
IC 30-2-13-21
Agents of seller; seller liability; written statement
Sec. 21. A seller who solicits for or enters into a contract under
this chapter must satisfy the following conditions:
(1) An agent who acts on behalf of a seller must be directly
affiliated with the seller for whom the agent is acting.
(2) The contract must state that the seller is responsible and
liable for the veracity and competency of the agent.
(3) An agent must provide to the purchaser a written statement
containing the following:
(A) The capacity of the person to act and whether the person
is acting for the seller as an agent.
(B) Notice that the seller is the only person or entity
authorized to provide the services or merchandise called for
by the contract.
(C) The name, address, and telephone number of the seller.
As added by P.L.200-1991, SEC.1.
IC 30-2-13-22
Seller bond or permit
Sec. 22. A bond or permit is not required of a seller except as
specifically required in this chapter.
As added by P.L.200-1991, SEC.1.
IC 30-2-13-23
Contracts; invalid provisions; unenforceable contracts
Sec. 23. (a) A contract is invalid if the contract allows the
purchaser the right to:
(1) convert, substitute, or exchange the purchase of burial rights
for the purchase of services or merchandise;
(2) free services or merchandise in exchange for the purchase
of other services or merchandise; or
(3) receive cash or gifts, other than burial rights and services
and merchandise, with a value of more than fifty dollars ($50)
as an inducement to purchase a contract.
(b) A contract is unenforceable if:
(1) the contract obligates the seller to provide prepaid services
or merchandise for a named individual in conjunction with the
death, burial, or final disposition of the individual;
(2) the purchaser under the contract is described in section
9(b)(4) of this chapter;
(3) the death of the named individual appears to have been the
result of:
(A) murder (IC 35-42-1-1);
(B) voluntary manslaughter (IC 35-42-1-3); or
(C) another criminal act, if the death does not result from the
operation of a vehicle; and
(4) the coroner, in consultation with the law enforcement
agency investigating the death of the decedent, determines that
there is a reasonable suspicion that the purchaser referred to in
subdivision (2) committed the offense.
The coroner, in consultation with the law enforcement agency
investigating the death of the decedent, shall inform the seller of the
determination of the purchaser described in subdivision (4).
As added by P.L.200-1991, SEC.1. Amended by P.L.241-1995,
SEC.12; P.L.102-2007, SEC.4.
IC 30-2-13-24
Seller or agent; prohibited acts
Sec. 24. A seller or an agent may not knowingly do the following:
(1) Except on request of a prospective purchaser, contact
prospective purchasers in hospitals, health facilities, or similar
institutions for the purpose of soliciting the sale of prepaid
services or merchandise.
(2) Solicit relatives of a person whose death is apparently
pending for the purpose of selling prepaid services or
merchandise.
(3) Except where the arrangement is the subject of a contract
allowed under this chapter, solicit, accept, or pay any
consideration for recommending or causing a deceased person
to be provided services or merchandise by specific sellers.
(4) Advertise prepaid services or merchandise in a false or
misleading manner.
As added by P.L.200-1991, SEC.1. Amended by P.L.1-1992,
SEC.160.
IC 30-2-13-25
Solicitation of sales; conditions
Sec. 25. Solicitation of a sale of prepaid services or merchandise
is permitted by a seller or an agent of a seller if the following exist:
(1) The conditions set forth in sections 21 and 24 of this chapter
are observed.
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