§ 10-15-111 — Insurance-funded preneed contracts

(1) If a contract seller
enters into a preneed contract in which the consideration is the assignment of life
insurance benefits, such preneed contract shall state that all or part of such
assigned funds shall be paid to the contract seller to pay for the services or
merchandise, or both, included in the preneed contract. The preneed contract and
the assignment shall identify the policy being assigned including the name of the
issuing company. The initial benefit assigned shall not exceed the preneed contract
price when the assignment is executed. The purchaser of any insurance policy to be
assigned under a preneed contract must have an insurable interest in the life of the
preneed contract beneficiary.

(2) If the value of the assignment exceeds the price of the preneed contract
services or merchandise, or both, at the time of the death of the preneed contract
beneficiary, based on the general provider's general price list in force in accordance
with the regulations of the federal trade commission, the excess amounts shall be
paid to the beneficiary under the policy or, if none, to the estate of the preneed
contract beneficiary.

Legislative History

Source: L. 95: Entire article R&RE, p. 1043, � 1, effective May 25.