Florida Statutes 497.462 – Other alternatives to deposits under s. 497.458
Current as of: 2024 | Check for updates
|
Other versions
(1)(a) As an alternative to the requirements of s. 497.458 that relate to trust funds for contracts written prior to July 1, 2001, or that relate to trust funds for contracts written prior to December 31, 2004, by any preneed licensee authorized to do business in this state that has total bonded liability exceeding $100 million as of July 1, 2001, and subject to the other restrictions of this section, a preneed licensee may purchase a surety bond for funds not held in trust as of July 1, 2001, in an amount not less than the aggregate value of outstanding liabilities on undelivered preneed contracts for merchandise and services. For the purpose of this section, the term “outstanding liabilities” means the gross replacement or wholesale value of the preneed merchandise and services. The bond shall be made payable to the State of Florida for the benefit of the licensing authority and all purchasers of preneed cemetery merchandise or services. The bond must be approved by the licensing authority.
Terms Used In Florida Statutes 497.462
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
- Cemetery: means a place dedicated to and used or intended to be used for the permanent interment of human remains or cremated remains. See Florida Statutes 497.005
- Contract: A legal written agreement that becomes binding when signed.
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Licensee: means the person or entity holding any license or other authorization issued under this chapter, except where expressly indicated otherwise. See Florida Statutes 497.005
- merchandise: means any personal property offered or sold by any person for use in connection with the final disposition, memorialization, interment, entombment, or inurnment of human remains or cremated remains, including, but not limited to, caskets, outer burial containers, alternative containers, cremation containers, cremation interment containers, urns, monuments, private mausoleums, flowers, benches, vases, acknowledgment cards, register books, memory folders, prayer cards, and clothing. See Florida Statutes 497.005
- Preneed: means any arrangement or method, of which the provider of funeral merchandise or services has actual knowledge, whereby any person agrees to furnish funeral merchandise or service in the future. See Florida Statutes 497.005
- Preneed contract: means any arrangement or method for which the provider of funeral merchandise or services receives any payment in advance for funeral or burial merchandise and services after the death of the contract beneficiary. See Florida Statutes 497.005
- Purchaser: means a person who executes a preneed or an at-need contract with a licensee for merchandise or services. See Florida Statutes 497.005
- Restitution: The court-ordered payment of money by the defendant to the victim for damages caused by the criminal action.
- Rules: refers to rules adopted under this chapter unless expressly indicated to the contrary. See Florida Statutes 497.005
- service: means any service offered or provided in connection with the final disposition, memorialization, interment, entombment, or inurnment of human remains or cremated remains. See Florida Statutes 497.005
(b) The amount of the bond shall be based on a report documenting the outstanding liabilities of the preneed licensee and shall be prepared by the preneed licensee using generally accepted accounting principles and signed by the preneed licensee’s chief financial officer.
(c) The report shall be compiled as of the end of the preneed licensee’s fiscal year and updated annually. The amount of the bond shall be increased or decreased as necessary to correlate with changes in the outstanding liabilities.
(d) If a preneed licensee fails to maintain a bond pursuant to this section, the preneed licensee shall cease the sale of preneed merchandise and services.
(2)(a) A buyer of preneed merchandise or services who does not receive such services or merchandise due to the economic failure, closing, or bankruptcy of the preneed licensee must file a claim with the surety as a prerequisite to payment of the claim and, if the claim is not paid, may bring an action based on the bond and recover against the surety.
(b) In order to qualify for recovery on any claim under paragraph (a), the buyer must file the claim no later than 1 year after the date on which the preneed licensee closed or bankruptcy was filed.
(c) The licensing authority may file a claim with the surety on behalf of any buyer under paragraph (a). The surety shall pay the amount of the claims to the licensing authority for distribution to claimants entitled to restitution and shall be relieved of liability to that extent.
(d) The liability of the surety under any bond may not exceed the aggregate amount of the bond, regardless of the number or amount of claims filed.
(e) If the total value of the claims filed exceeds the amount of the bond, the surety shall pay the amount of the bond to the licensing authority for distribution to claimants entitled to restitution and shall be relieved of all liability under the bond.
(3) The preneed licensee shall maintain accurate records of the bond and premium payments on it, which records shall be open to inspection by the licensing authority.
(4) This act does not relieve the preneed licensee or other entity from liability for nonperformance of contractual terms unless the preneed licensee cannot deliver the merchandise or services because of a national emergency, strike, or act of God.
(5) The licensing authority may require the holder of any assets of the preneed licensee to furnish written verification of the financial report required to be submitted by the preneed licensee or other entity.
(6) Any preneed contract which promises future delivery of merchandise at no cost constitutes a paid-up contract. Merchandise which has been delivered is not covered by the required performance bond even though the contract is not completely paid. The preneed licensee may not cancel a contract unless the purchaser is in default according to the terms of the contract and subject to the requirements of s. 497.459. A contract sold, discounted, and transferred to a third party constitutes a paid-up contract for the purposes of the performance bond.
(7) Each contract must state the type, size, and design of merchandise and the description of service to be delivered or performed.
(8) A purchaser and a preneed licensee who are parties to a preneed contract executed prior to July 2, 1988, may enter into an amended preneed contract which is made subject to this section. On and after January 1, 2006, this subsection may no longer be used to make any additional contracts subject to a bond under this section, provided that contracts already amended and made subject to a bond as of December 31, 2005, may remain under such bond.
(9) The licensing authority may adopt forms and rules necessary to implement this section, including, but not limited to, rules which ensure that the surety bond provides liability coverage for preneed merchandise and services.
(10) Preneed licensees may utilize the bonding alternatives to s. 497.458 provided in this section only for contracts written prior to July 1, 2001, for funds not held in trust as of July 1, 2001, or for contracts written prior to December 31, 2004, by any preneed licensee authorized to do business in this state that has total bonded liability exceeding $100 million as of July 1, 2001, for funds not held in trust as of July 1, 2001.