§ 10-15-111.5 — Change of ownership - rules

Colorado § 10-15-111.5

• Jurisdiction: Colorado
• Title 10: Insurance
• Art.: Preneed Funeral Contracts

Text

(1) (a) A sale of an existing
preneed contract that changes who provides funeral goods and services is void
unless approved by the commissioner under this section. To transfer ownership, the
contract seller must report a pending sale of the preneed contract to the
commissioner in writing at least fourteen days before the sale closing. The notice
must include:

(I) The name and address of the contract seller;

(II) The name and address of the organization proposing to acquire
ownership of the preneed contract, referred to in this section as the transferee;

(III) The name and address of the owners, operators, corporate officers,
partners, or members of the transferee;

(IV) The name and address of the financial institution where preneed funds
are held;

(V) The name under which preneed funds are held;

(VI) A description of each preneed contract, arrangement, or agreement
included in the sale;

(VII) An accounting of the trust fund and all transferred and outstanding
preneed contracts, including the number of pending contracts, the full contract
value, the current value for each contract, a record of all disbursements from
preneed trust accounts within the last twenty-four months, and the information
required in the annual report;

(VIII) Any documents or amendments thereto concerning the trust or
insurance funds, or any other preplanning or prefunding agreements;

(IX) A copy of the notice proposed to be sent to the contract buyers after the
transfer; and

(X) Any other information that is reasonably required by the commissioner by
rule.

(b) The commissioner may, by rule or order, waive or reduce any or all of the
requirements in subparagraphs (I) to (X) of paragraph (a) of this subsection (1) as
unnecessary or inappropriate in the public interest or for the protection of the
contract buyers.

(2) (a) The commissioner shall approve the contract seller's application for
change of ownership by written authorization if:

(I) The accounting is complete, accurate, and shows the trust fund is whole
and intact;

(II) All required information and documents are filed with the commissioner;
and

(III) The transferee holds a valid contract seller's license, or is qualified under
section 10-15-103 for a contract seller's license, and is able to perform all
transferred preneed contracts in accordance with this article.

(b) The commissioner shall approve or disapprove of the sale of an existing
preneed contract in writing within sixty days after receiving the report required by
paragraph (a) of subsection (1) of this section. If the commissioner fails to
disapprove of the sale in writing within sixty days, the sale is deemed approved.

(3) (a) The contract seller, or person with an interest in the contract, remains
liable for all funds and transactions until the effective date of the transfer.

(b) Any discrepancies, malfeasance, or fraud prior to the sale of the preneed
contract is the responsibility of the seller, for which the seller is liable.

(4) Within thirty days after approval by the commissioner, the transferee of a
preneed contract shall send a notice to the last-known address of each contract
buyer informing the buyer of the change in ownership and the assumption of the
obligation to perform the preneed contract.

Legislative History

Source: L. 2013: Entire section added, (SB 13-125), ch. 287, p. 1518, � 6, effective August 7.