4260

							Agency Name: Consumer Affairs
Statutory Authority: 32-7-10 et seq., particularly 32-7-110(A)
Document Number: 4260
Proposed in State Register Volume and Issue: 35/12
House Committee: Labor, Commerce and Industry Committee
Senate Committee: Judiciary Committee
120 Day Review Expiration Date for Automatic Approval: 02/02/2013
Status: Pending
Subject: Preneed Funeral Contracts

History: 4260

By   Date               Action Description                    Jt. Res. No.   Expiration Date
-    12/23/2011         Proposed Reg Published in SR
-    03/05/2012         Received by Lt. Gov & Speaker                        02/02/2013
H    03/06/2012         Referred to Committee
S    03/06/2012         Referred to Committee




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                                           Document No. 4260
                             DEPARTMENT OF CONSUMER AFFAIRS
                                              CHAPTER 28
                         Statutory Authority: 1976 Code Sections 32-7-10 et seq.,
                                    particularly Section 32-7-110(A)

28-800. Preneed Funeral Contracts

Synopsis:

   The Department proposes to promulgate Regulation 28-800 addressing licensed funeral directors who
offer to sell preneed funeral contracts. The purposes of the regulation are to give the funeral directors
guidance in complying with the law in the sale of preneed funeral contracts. Also addressed are the
financial responsibility requirements for the selling of preneed funeral contracts, to include bond and
letter of credit amounts. These amounts have been in place since before the Department became the
regulators on July 1, 2006.

  Section 32-7-110(A) allows the Department to promulgate regulations necessary to effectuate the
purposes of the Chapter.

  Notice of Drafting for the proposed regulation was published in the State Register on August 26, 2011.
Comments were solicited for consideration in drafting the proposed regulation.

Instructions: Print Regulation 28-800 as shown below.


Indicates Matter Stricken
Indicates New Matter


Text:

28-800. Preneed Funeral Contracts.

(Statutory Authority: 1976 Code Sections § 32-7-110(A))

(A) Definitions

  Definitions shall be those contained in the Preneed Funeral Contracts law, S.C. Code Ann. Section 32-
7-10 et seq. and the following:

  (1) “at need” means “after the beneficiary is deceased.”

  (2) “at preneed” means “before the beneficiary is deceased.”

  (3) “funeral services” means any of the following:

        (i) engaging in providing shelter, care, and custody of the human dead;

        (ii) preparing the human dead by embalming or other methods for burial or other disposition;


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       (iii) making arrangements before the time of death, financial or otherwise, including arrangements
for cremation, for providing these services, or the sale of funeral merchandise; or

       (iv) engaging in the practice or performing any functions of funeral directing or embalming as
presently recognized by persons engaged in these functions.

  (4) “other action by the Department,” as used in § 32-7-100(B), includes “a warning notice of a
deficiency, a cease and desist order for violations of the preneed law, additional education concerning the
preneed law, or a fine for violations of the preneed law.

   (5) “trust account” means a federally insured account where the funds can only be paid to the provider
when the provider furnishes the financial institution a certified certificate of death and a certified
statement that the services and merchandise has been performed.

(B) Licensing for Providers of Preneed Funeral Contracts

  A license is required for each location of the provider where preneed funeral contracts are signed or
held or where payments are accepted or held at preneed.

(C) Transfer of Preneed Contracts

  Preneed funeral contracts may be transferred as provided in §§ 32-7-35 and 32-7-45. In addition at
preneed, the contracts can only be transferred to a funeral home licensed to sell preneed contracts. If a
preneed contract is transferred, the receiving funeral home does not need to pay an additional service
charge unless some change is made to the contract. At need, the contracts may be transferred to any
funeral home licensed by the Board of Funeral Services.

(D) Financial Responsibility

  (1) The purpose of the required financial responsibility is to protect the public from errors and
omissions by a provider.

   (2) The Department will accept a bond written by a licensed insurance company or a letter of credit by
a financial institution.

  (3) Amount of Bond or Letter of Credit
  The amount required for the bond or letter of credit will increase as the total dollar amount of
outstanding contracts increases, as shown below. It is the responsibility of each provider to maintain the
appropriate bond or letter of credit amount.

  Total Ins. & Trust Balance             Amount of Bond or Letter of Credit Required
    $0-100.000                                 $15,000
    100,001-250,000                             30,000
    250,001-500,000                             45,000
    500,001 and over                            75,000

(5) Record Keeping

  A provider that receives any monies from a consumer at preneed must provide the consumer with a
receipt and retain a copy of the receipt at the funeral home. Records associated with preneed funeral
contracts must be retained for six years after the funeral services have been performed. When a provider

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has more than one location, the preneed contracts and records may be consolidated in one location, but
the provider shall notify the Department of the location where the records are kept.

Fiscal Impact Statement:

  The Department of Consumer Affairs estimates the costs incurred by the State in complying with the
proposed regulation will be approximately $0.

Statement of Rationale:

   The South Carolina preneed funeral contracts law permits and/or contemplates the drafting of
reporting, recordkeeping and financial responsibility requirements. Such additions are necessary to
effectuate the consumer protection purpose of the Act and to guide businesses with compliance.




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