Deposits into trust; trustee responsibilities; interests in funds.

(a) Any person who is paid, collects, or receives funds under a preneed contract for funeral services or funeral merchandise to be funded by trust shall deposit in trust an amount at least equal to the sum of 75 percent of the amount collected on the purchase price for all funeral services and funeral merchandise sold, transportation, and facilities rented other than outer burial containers, 60 percent of the amount collected on the purchase price for outer burial containers, 110 percent of the wholesale cost of memorials from the amount collected on the purchase price of memorials, and 100 percent of the amount collected on the purchase price for all cash advance items sold.

(b) All deposits shall be made within 30 days after the end of the calendar month in which the preneed contract is paid in full, unless, prior to that time, all liabilities of the seller under the preneed contract to deliver the specific funeral merchandise or funeral services, or both, or the specific cash advances, identified by the preneed provider as properly allocated to the payment, have been satisfied, or the preneed contract is validly cancelled.

(c) The trustee shall take title to the property conveyed to the trust for the purpose of investing, protecting, and conserving it for the certificate holder; collecting income; and distributing the principal and income as prescribed in this article.

(d) The certificate holder is prohibited from sharing in the discharge of these responsibilities, except that the certificate holder may appoint an adviser to the trustee or elect tax free investments. Nothing in this chapter shall prohibit a trustee from electing the qualified funeral trust option under the Internal Revenue Code.

(e) The trust agreement shall be submitted to the commissioner for approval and filing.

(f) The funds shall be held in trust, both as to principal and income earned thereon, and shall remain intact, except that the cost of the operation of the trust or trust account authorized by this section may be deducted from the income earned thereon.

(g) The contract purchaser shall have no interest whatsoever in, or power whatsoever over, funds deposited in trust pursuant to this section.

(h) In no event may such funds be loaned to a certificate holder, an affiliate of a certificate holder, or any person directly or indirectly engaged in the burial, funeral home, or cemetery business. Furthermore, the certificate holder's interest in the trust shall not be pledged as collateral for any loans, debts, or liabilities of the certificate holder and shall not be transferred to any person without the prior written approval from the commissioner and the trustee. Even though the certificate holder shall be deemed and treated as the settlor and beneficiary of the trust for all purposes, all of the trust funds are exempt from all claims of creditors of the certificate holder except as to the claims of the contract purchaser, his or her representative, or the commissioner.

(i) For all preneed contracts written or entered into on or after January 1, 2015, all required deposits in trust shall commence not later than 30 days after the end of the calendar month in which the sum of the monies collected on the preneed contract exceeds the amount that is not required to be deposited in trust as determined under subsection (a) unless, prior to that time, all liabilities of the preneed seller under the preneed contract have been satisfied, or the preneed contract is validly cancelled. Further required deposits on the contract shall thereafter be made not later than 30 days after the end of the calendar month in which each contract payment is collected by the seller.

(Act 2002-74, p. 221, §1; Act 2014-216, p. 653, §3.)