§ 5-33.1-4. Escrow accounts.
(a) A licensed funeral service establishment shall deposit any money that the establishment
receives pursuant to a funeral service contract, within fifteen (15) days of its receipt
of that money, in one or more escrow accounts established in accordance with the provisions
of this section.
(b) Each escrow account established pursuant to this section shall be administered and
maintained by the escrow agent who is designated by the funeral service establishment
that deposits money in the escrow account and who may be the funeral director of the
funeral service establishment.
(c) Assets held in escrow accounts established pursuant to this section shall be invested
in one or more of the following:
(1) Deposit accounts insured by the Federal Deposit Insurance Corporation;
(2) Accounts insured against loss of principal by an agency or instrumentality of the
United States government;
(3) Bonds in which savings banks in this state may, by law, invest;
(4) Obligations of the United States or any agency of the United States or of any state
or any municipality of any state;
(5) Credit unions insured by the National Credit Union Administration; or
(6) Any other deposit account, insurance contract, of a quality, safety, and expense comparable
to those prescribed in this subsection or in shares or units of beneficial interests
of any open-end investment company or association or investment trust that is registered
under the federal Investment Company Act of 1940, 15 U.S.C. § 80a-1 et seq.; provided that the company, association, or trust invests solely in investments
that are set forth in this subsection or repurchase agreements secured by those investments.
(d) All interest, dividends, and other income earned on the amounts deposited in an escrow
account pursuant to this section shall be retained in the escrow account and credited
to the interests of those persons for whose benefit the escrow account is maintained.
Amounts in an escrow account shall be removed from that account only as provided in
this chapter. The party designated as an escrow agent shall receive an annual statement
from the financial institution responsible for the escrow account, of the amount credited
to the party's escrow account, unless those statements are not normally provided by
the financial institution in the ordinary course of business. The statement shall
include the name and address of the escrow agent.
(e) If a purchaser of funeral services, property, or merchandise defaults in making payments
required under the terms of the contract, or if the purchaser or the person responsible
for making funeral arrangements for a deceased beneficiary fails to have the funeral
service establishment provide services, the funeral service establishment may retain
any origination fee and any costs actually and reasonably incurred by the establishment
in the performance of the contract as liquidated damages; provided, that the sum of
the amount retained as an origination fee and the amount retained to pay for costs
incurred by the funeral establishment in the performance of the contract shall not
exceed an amount equal to five percent (5%) of the amount in the escrow account at
the time the purchaser of funeral services defaults in making the payments, or two
hundred dollars ($200), whichever is greater. The balance of any amount remaining
in the escrow account shall be paid to the purchaser within fifteen (15) days of request
for payment.
(f) A person, firm, or corporation licensed in accordance with the provisions of chapter
33.2 of this title who or that enters into a funeral service contract shall furnish
the agent of an escrow account established in accordance with the provisions of this
section with the name of the purchaser of the services, and the address and name of
the beneficiary of the funeral service contract. Nothing in this section shall prohibit
the commingling of more than one escrow account for the purchaser of the money received
under more than one funeral service contract for the purpose of management and investment
of funds in the escrow account.
(g) A funeral service contract shall provide that, if the particular merchandise provided
for in the contract is not available at the time of death, the funeral service establishment
shall furnish merchandise equal or superior in quality of material and workmanship
to the merchandise provided for in the contract.