§ 30-2-13-12.1 — Contracts entered into after December 31, 1995, and before July 1, 1999

Indiana § 30-2-13-12.1

• Jurisdiction: Indiana
• Art. 2: GENERAL PROVISIONS
• Ch. 13: Payment of Funeral, Burial Services, or Merchandise in

Text

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.

Legislative History

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.