§ 523A.601 — Disclosures

Iowa § 523A.601

• Jurisdiction: Iowa
• Title XIII: COMMERCE
• Ch. 523A: CEMETERY AND FUNERAL MERCHANDISE AND FUNERAL SERVICES

Text

1. A purchase agreement for cemetery merchandise, funeral merchandise, funeral
services, or a combination thereof shall be written in clear, understandable language, and
shall be printed or typed in an easy-to-read font, size, and style, and shall:
a. Identify the preneed seller by name and license number, the sales agent by name
and license number, the purchaser, and the person for whom the cemetery merchandise,
funeral merchandise, funeral services, or a combination thereof is purchased, if other than
the purchaser.
b. Specify the cemetery merchandise, funeral merchandise, funeral services, or a
combination thereof to be provided, and the cost of each merchandise item or service.
c. State clearly the conditions upon which substitution will be allowed.
d. State the total purchase price and the terms under which it is to be paid.
e. State clearly whether the purchase agreement is a guaranteed price agreement or a
nonguaranteed price agreement. A nonguaranteed price agreement shall contain in twelve
point boldface type an explanation of the consequences of such agreement in substantially
the following language:
21 CEMETERY AND FUNERAL MERCHANDISE AND FUNERAL SERVICES, §523A.601
The prices of merchandise and services under this agreement
are subject to change in the future. Any funds paid under this
agreement are only a deposit to be applied, together with accrued
income, toward the final costs of the merchandise or services
agreed upon. Additional charges may be incurred when additional
merchandise or services or both are provided or when prices have
increased more than accrued income.
f. State that the purchase of the cemetery merchandise, funeral merchandise, and funeral
services is revocable and specify the damages for cancellation, if any.
g. Stateclearlywhohastheauthoritytocancel, amend, orrevokethepurchaseagreement
to purchase cemetery merchandise, funeral merchandise, and funeral services.
h. State clearly that the purchaser is entitled to rescind the purchase agreement under
terms and conditions specified by section 523A.602.
i. Include an explanation of regulatory oversight by the insurance division in twelve point
boldface type, in substantially the following language:
This agreement is subject to rules administered by the Iowa
insurance division. You may call the insurance division at
(telephone number). Written inquiries or complaints should be
mailed to the Iowa securities and regulated industries bureau,
(street address), (city), Iowa (zip code).
2. A purchase agreement that is funded by a trust shall also:
a. State the percentage of money to be placed in trust.
b. Explain the disposition of the income generated from investments and include a
statementofthepurchaser’sresponsibilityforincometaxesowedontheincomeifapplicable.
c. State that if, after all payments are made under the conditions and terms of the
purchase agreement for cemetery merchandise, funeral merchandise, funeral services, or a
combination thereof, any funds remain in the nonguaranteed irrevocable burial trust fund,
the seller shall disburse the remaining funds according to law.
d. State clearly the terms of the funeral and burial trust agreement and whether it is
revocable or irrevocable.
e. State clearly that the purchaser is entitled to transfer the trust funding, insurance
funding, or other trust assets or select another seller to receive the trust funding, insurance
funding, or any other trust assets.
f. Stateclearlywhohastheauthoritytoamendorrevokethetrustagreement, ifrevocable,
andwhohastheauthoritytoappointsuccessortrusteesifthepurchaseagreementiscanceled.
3. The commissioner may adopt rules establishing disclosure and format requirements
to promote consumer understanding of the merchandise and services purchased and the
available funding mechanisms for a purchase agreement under this chapter.
4. All purchase agreements, including a purchase agreement delivered or executed by
electronic means, must have a sales agent identified. A purchase agreement, including a
purchaseagreementdeliveredorexecutedbyelectronicmeans,shallbereviewedbythesales
agent identified and named in the purchase agreement pursuant to subsection 1, paragraph
“a”, and be signed by the purchaser and seller. If the purchase agreement is for mortuary
science services as “mortuary science” is defined in section 156.1, the purchase agreement
must also be signed by a person licensed to deliver funeral services.
5. Thesellershalldisclosethefollowinginformationpriortoacceptingtheinitialpayment
under a purchase agreement:
a. The specific method or methods, including but not limited to trust deposits, certificates
of deposit, life insurance or an annuity, a surety bond, or warehousing, that will be used to
fund the purchase agreement.
b. The relationship between the soliciting agent or agents, the provider of the cemetery
merchandise, funeral merchandise, or funeral services, or combination thereof, the
commissioner, and any other person.
c. The relationship of the life insurance policy or other trust assets to the funding of the
§523A.601, CEMETERY AND FUNERAL MERCHANDISE AND FUNERAL SERVICES 22
purchase agreement and the nature and existence of any guarantees regarding the purchase
agreement.
d. The impact on the purchase agreement of the following:
(1) Changes in the funding, including but not limited to changes in the assignment,
beneficiary designation, trustee, or use of proceeds.
(2) Any penalties to be incurred by the purchaser as a result of the failure to make any
additional payments required.
(3) Penalties to be incurred upon cancellation.
e. A list of cemetery merchandise, funeral merchandise, and funeral services which are
agreed upon under the purchase agreement and all relevant information concerning the
price of the cemetery merchandise, funeral merchandise, funeral services, or a combination
thereof, including a statement that the purchase price is either guaranteed at the time of
purchase or to be determined at the time of need.
f. All relevant information concerning what occurs and whether any entitlements or
obligations arise if there is a difference between the funding and the amount actually needed
to fund the purchase agreement.
g. Any penalties or restrictions, including but not limited to geographic restrictions or
the inability of the provider to perform, upon delivery of cemetery merchandise, funeral
merchandise, or funeral services, or the purchase agreement guarantee.
h. If the funding is being transferred from another seller, any material facts related to the
revocation of the prior purchase agreement and the transfer of the existing trust funds.
6. a. (1) A guaranteed purchase agreement that is funded by a trust shall include a
conspicuous statement in language substantially similar to the following language:
For your prearranged funeral agreement, we will deposit not less
than eighty percent of your payments in trust at (name of financial
institution), (street address), (city), (state) (zip code) within fifteen
days following receipt of the funds. For your protection, you
will be notified within sixty days from the date of deposit by the
financial institution, if acting as a trustee of trust funds under this
chapter, to confirm that the deposit of these funds has been made
establishing a trust fund as required by law. If you do not receive
this notification, you may contact the Iowa insurance division for
assistance by calling the insurance division at (telephone number)
or by mail at (street address), (city), Iowa (zip code), or you may
contact the financial institution by calling the financial institution
at (telephone number) or by mail at the address indicated above.
(2) A nonguaranteed purchase agreement that is funded by a trust shall include a
conspicuous statement in language substantially similar to the following language:
For your prearranged funeral agreement, we will deposit all of
your payments in trust at (name of financial institution), (street
address), (city), (state) (zip code) within fifteen days following
receipt of the funds. For your protection, you will be notified within
sixty days from the date of deposit by the financial institution, if
acting as a trustee of trust funds under this chapter, to confirm
that the deposit of these funds has been made establishing a trust
fund as required by law. If you do not receive this notification, you
may contact the Iowa insurance division for assistance by calling
the insurance division at (telephone number) or by mail at (street
address), (city), Iowa (zip code), or you may contact the financial
institution by calling the financial institution at (telephone number)
or by mail at the address indicated above.
b. A purchase agreement that is funded with an insurance policy or an annuity shall
include a conspicuous statement in language substantially similar to the following language:
23 CEMETERY AND FUNERAL MERCHANDISE AND FUNERAL SERVICES, §523A.602
An (insurance policy or annuity) will be purchased from (name
of issuer of the policy or annuity), (street address), (city), (state)
(zip code). You should receive confirmation of the purchase of
an insurance policy or certificate or an annuity within sixty days
of making payment. Delivery of the actual insurance policy or
certificate or annuity shall also constitute confirmation. For your
protection, you have the right to confirm that the insurance policy
or annuity is issued as required by law. If you do not receive
confirmation that an insurance policy or certificate or an annuity
has been purchased or receive the insurance policy or certificate
or the annuity, you should report this fact to the Iowa insurance
division by calling the insurance division at (telephone number).
Written reports should be mailed to the Iowa insurance division at
(street address), (city), Iowa (zip code).
c. A purchase agreement that is funded with a surety bond shall include a conspicuous
statement in language substantially similar to the following language:
Coverage under a surety bond in the amount of $(amount) will be
purchased from (name of issuer of surety bond), (street address),
(city), (state) (zip code) to fund your purchase. If you pay pursuant
to your purchase agreement with a single payment, you should
receive confirmation of the purchase of a surety bond within sixty
days of making the payment. If you pay pursuant to your purchase
agreement with multiple, periodic payments, you should receive
confirmation of the purchase of a surety bond within sixty days of
making the first payment and within sixty days of making the last
payment pursuant to the agreement. For your protection, you have
the right to confirm that the surety bond is issued as required by
law. If you do not receive confirmation of coverage under a surety
bond within sixty days of making the first payment and within
sixty days of making the last payment, you should report this fact
to the Iowa insurance division by calling the insurance division at
(telephone number). Written reports should be mailed to the Iowa
insurance division at (street address), (city), Iowa (zip code).