Iowa Admin. Code r. 191-100.35 - Preneed seller's change of ownership and cessation of business operations
(1)
Sale or transfer of purchase agreements or of business. A
preneed seller shall not change ownership of a business, sell all or part of a
business, cease business, or sell or transfer purchase agreements as part of
the sale of a business or the assets of a business, unless:
a. The preneed seller has notified the
commissioner of the change at least 90 days prior to the sale or
transfer.
b. The person receiving
assets and purchase agreements has an active preneed seller's license at the
time of the sale or transfer.
c. A
certified public accountant has performed and filed with the commissioner an
agreed-upon procedures (AUP) report or other audit acceptable to the
commissioner , as required by Iowa Code section
523A207..
d. The commissioner has conducted an
examination of the sales and market practices of the preneed seller, if the
commissioner requests.
e. The
preneed seller has provided the commissioner with any other information
required for the commissioner to approve the sale or transfer.
(2)
Cessation of
business by a preneed seller. At least 90 days prior to the cessation
of business operations, if a preneed seller voluntarily or involuntarily ceases
doing business, and the preneed seller's obligation to provide merchandise or
services has not been assumed by another preneed seller holding an active
preneed seller's license , the preneed seller shall:
a. Send a notice to the commissioner , in a
manner as directed by the commissioner . Pursuant to subrule 100.10(3), the
commissioner shall place the preneed seller's license on restricted status when
the preneed seller ceases doing business.
b. Send written notice of the proposed
cessation of business to the purchaser and beneficiary, if different than the
purchaser, of each purchase agreement by certified mail, return receipt
requested. The notice shall indicate the preneed seller's ability to transfer
any trust funds and transfer the proceeds from any insurance to another
licensed preneed seller.
c. During
the 90 days prior to the cessation of business operations, the preneed seller
shall work with financial institutions and insurance companies to modify the
title to financial accounts and modify assignments and ownership of annuities
and insurance policies as necessary or distribute trust funds to the purchaser
or transfer to another licensed preneed seller.
(3)
Failure to notify the
commissioner of a change of ownership, sale of a business, or cessation of
business.
a. A preneed seller's
failure to notify the commissioner , as set forth in this rule, of a change of
ownership of a business, sale of all or part of a business, cessation of
business, or sale or transfer of purchase agreements as part of the sale of a
business or the assets of a business may be a ground for penalty under rule
191-100.40 (523A) or 191-100.41 (523A).
b. If trust funds are transferred without
compliance with this rule or with Iowa Code sections
523A207.
and
523A602.,
the commissioner may petition for the appointment of a receiver pursuant to
Iowa Code section
523A811..
(4)
Annual
reports. A preneed seller holding a restricted license shall continue
to file annual reports pursuant to Iowa Code section
523A204.
regarding any purchase agreement not transferred to another seller holding a
current preneed seller's license through an assumption agreement or otherwise.
For purposes of this rule, the sale of a business shall include any change of controlling interest in any corporation or other business entity.
Notes
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