Rhode Island General Laws 5-33.1-4. Escrow accounts
(a) A licensed funeral service establishment shall deposit any money that the establishment receives pursuant to a funeral service contract, within fifteen (15) days of its receipt of that money, in one or more escrow accounts established in accordance with the provisions of this section.
Terms Used In Rhode Island General Laws 5-33.1-4
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Contract: A legal written agreement that becomes binding when signed.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- National Credit Union Administration: The federal regulatory agency that charters and supervises federal credit unions. (NCUA also administers the National Credit Union Share Insurance Fund, which insures the deposits of federal credit unions.) Source: OCC
- person: may be construed to extend to and include co-partnerships and bodies corporate and politic. See Rhode Island General Laws 43-3-6
- United States: include the several states and the territories of the United States. See Rhode Island General Laws 43-3-8
(b) Each escrow account established pursuant to this section shall be administered and maintained by the escrow agent who is designated by the funeral service establishment that deposits money in the escrow account and who may be the funeral director of the funeral service establishment.
(c) Assets held in escrow accounts established pursuant to this section shall be invested in one or more of the following:
(1) Deposit accounts insured by the Federal Deposit Insurance Corporation;
(2) Accounts insured against loss of principal by an agency or instrumentality of the United States government;
(3) Bonds in which savings banks in this state may, by law, invest;
(4) Obligations of the United States or any agency of the United States or of any state or any municipality of any state;
(5) Credit unions insured by the National Credit Union Administration; or
(6) Any other deposit account, insurance contract, of a quality, safety, and expense comparable to those prescribed in this subsection or in shares or units of beneficial interests of any open-end investment company or association or investment trust that is registered under the federal Investment Company Act of 1940, 15 U.S.C. § 80a-1 et seq.; provided that the company, association, or trust invests solely in investments that are set forth in this subsection or repurchase agreements secured by those investments.
(d) All interest, dividends, and other income earned on the amounts deposited in an escrow account pursuant to this section shall be retained in the escrow account and credited to the interests of those persons for whose benefit the escrow account is maintained. Amounts in an escrow account shall be removed from that account only as provided in this chapter. The party designated as an escrow agent shall receive an annual statement from the financial institution responsible for the escrow account, of the amount credited to the party’s escrow account, unless those statements are not normally provided by the financial institution in the ordinary course of business. The statement shall include the name and address of the escrow agent.
(e) If a purchaser of funeral services, property, or merchandise defaults in making payments required under the terms of the contract, or if the purchaser or the person responsible for making funeral arrangements for a deceased beneficiary fails to have the funeral service establishment provide services, the funeral service establishment may retain any origination fee and any costs actually and reasonably incurred by the establishment in the performance of the contract as liquidated damages; provided, that the sum of the amount retained as an origination fee and the amount retained to pay for costs incurred by the funeral establishment in the performance of the contract shall not exceed an amount equal to five percent (5%) of the amount in the escrow account at the time the purchaser of funeral services defaults in making the payments, or two hundred dollars ($200), whichever is greater. The balance of any amount remaining in the escrow account shall be paid to the purchaser within fifteen (15) days of request for payment.
(f) A person, firm, or corporation licensed in accordance with the provisions of chapter 33.2 of this title who or that enters into a funeral service contract shall furnish the agent of an escrow account established in accordance with the provisions of this section with the name of the purchaser of the services, and the address and name of the beneficiary of the funeral service contract. Nothing in this section shall prohibit the commingling of more than one escrow account for the purchaser of the money received under more than one funeral service contract for the purpose of management and investment of funds in the escrow account.
(g) A funeral service contract shall provide that, if the particular merchandise provided for in the contract is not available at the time of death, the funeral service establishment shall furnish merchandise equal or superior in quality of material and workmanship to the merchandise provided for in the contract.
History of Section.
P.L. 1990, ch. 103, § 1; P.L. 1993, ch. 57, § 1.