Ala. Admin. Code r. 482-3-004-.02 - Funding Methods
(1)
The following are available for use as the funding methods to defray the cost
of future performance of preneed contracts:
(a) A funeral or cemetery merchandise and
services trust.
(b) Life insurance
or annuities sold in conjunction with the preneed contract.
(c) A preneed seller's current revenues if
the seller has in force an approved surety bond.
(d) A preneed seller's current revenues if
the seller has in force an approved letter of credit.
(2) If a preneed seller is funding preneed
contracts through the use of a trust, the timing and percentage of trust
deposits must be consistent for all preneed contracts sold. The Commissioner
must approve any subsequent change in the method on such terms and conditions
as the Commissioner may prescribe.
(3) Preneed contract forms must identify the
funding method being used and contain provisions pertinent to that method, and
not include references to or provisions relevant only to another funding
method.
(4) A preneed seller must
maintain a detailed and accurate record of funds collected in payment for
preneed contracts and disbursements of those funds as pertinent to the funding
method used.
Notes
Author: Commissioner of Insurance
Statutory Authority: Code of Ala. 1975, ยงยง 27-2-17, 27-17A-1 to -57 (2014).
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