§ 46-1-206 — Sales of pre-need cemetery merchandise and services

(a) Except as provided in this section, no cemetery company shall directly or indirectly offer to or enter into a contract for the sale of cemetery merchandise or services to be used or performed in connection with the interment or commemoration of a deceased human being, if delivery of the cemetery merchandise, other than for incidental additions, such as dates, scrolls, or other supplementary matter representing not more than ten percent (10%) of the total contract price, or performance of the services is to be made more than sixty (60) days after the receipt of any payment under the contract of sale. This subsection (a) includes, but is not limited to, the pre-need sales of cemetery merchandise and services. (b) (1) If a cemetery company enters into a contract for the sale of cemetery merchandise or services that provides for delivery within sixty (60) days, and the cemetery company fails inexcusably to deliver cemetery merchandise or services within one hundred twenty (120) days after the receipt of any payment under the contract, the cemetery company shall deposit to a pre-need merchandise and services trust account or a pre-need trust account established pursuant to § 46-1-207 all moneys received under the contract. (2) (A) For purposes of this part, "delivery" includes physical delivery of the cemetery merchandise to the buyer or the cemetery company has paid its supplier for the cemetery merchandise, the supplier has caused the cemetery merchandise to be manufactured and stored, and has caused certificate of ownership of the cemetery merchandise to be sent to the purchaser, and has agreed to ship the cemetery merchandise upon the purchaser's request of the cemetery company; provided, that the cemetery company set aside funds for the installation of the cemetery merchandise pursuant to § 46-1-207 . (B) For the purposes of this part, no person, firm or corporation will be deemed a supplier to a Tennessee cemetery company, unless it: (i) Permanently and unalterably identifies all cemetery merchandise with the name of the contract beneficiary; (ii) Submits, upon request of the commissioner, a report of all cemetery merchandise that has been purchased through a Tennessee cemetery company and has been placed in storage; (iii) Permits the commissioner or the commissioner's designee, at any time, to examine stored cemetery merchandise that was purchased through a Tennessee cemetery company and to examine any document pertaining to the cemetery merchandise; (iv) Submits evidence to the cemetery company of a bond insuring the existing and good title of any cemetery merchandise due any contract beneficiary purchased through a Tennessee cemetery company; and (v) Submits evidence to the cemetery company ensuring that all cemetery merchandise purchased through a Tennessee cemetery company and being stored by the supplier is insured for casualty, theft or other loss. (c) Except as provided in subsection (d), nothing in this part shall apply to contracts for the sale of funeral merchandise and services, such contracts being regulated under title 62, chapter 5, and other general laws of this state. (d) A cemetery company may offer a pre-need sales contract that covers funeral merchandise as defined in § 62-5-403 , or a pre-need sales contract that covers both cemetery merchandise as defined in § 46-1-102 and funeral merchandise, if: (1) The cemetery company uses a contract issued by the commissioner for general use. If the commissioner has not issued a contract pursuant to this subdivision (d)(1), then the cemetery company may use a contract that has been approved by the commissioner. To submit a contract for approval, the cemetery company shall submit a request for approval to the commissioner prior to the execution of the contract. If the cemetery company has not received approval from the commissioner within sixty (60) days of submitting the request or receives no disapproval of the contract within the sixty-day period, then the contract shall be deemed approved; provided, that the commissioner may disapprove a previously approved contract if the contract violates this section upon giving notice and an opportunity for a hearing to the pre-need seller; (2) The cemetery company deposits all moneys received for funeral merchandise as defined in § 62-5-403 under the contract in a pre-need merchandise and services trust account or a pre-need trust account established pursuant to § 46-1-207 ; (3) The cemetery company complies with the requirements of selling funeral merchandise as provided in the Tennessee Prepaid Funeral Benefits Act, compiled in title 62, chapter 5, part 4; and (4) The cemetery company submits a price list to the commissioner for the funeral merchandise as defined in § 62-5-403 .

Legislative History

Amended by 2016 Tenn. Acts, ch. 911,Secs.s5, s6, s16, s18 eff. 4/27/2016. Acts 1979, ch. 307, § 4(A); T.C.A., §46-2-202; Acts 1986, ch. 693, § 20; T.C.A. §46-2-402; Acts 2006, ch. 1012, § 3.