(A) There is established the Preneed Funeral Loss Reimbursement Fund which must be administered by the department. The purpose of the fund is to reimburse the estates of beneficiaries of preneed funeral contacts, or in the absence of an estate filing, the purchaser or applicant with payment jointly to the funeral home providing services or merchandise or both, who have suffered financial loss as a result of the misfeasance, fraud, default, failure, or insolvency of a South Carolina funeral home or South Carolina funeral director.

(B) From the service charge for each preneed contract as required by § 32-7-50(C), the department shall deposit into the fund that portion of the charge as established by the department. The department may suspend or resume deposits into the fund at any time and for any period to ensure that a sufficient amount is available to meet likely disbursements and to maintain an adequate reserve. The maximum amount of the service charge to be allocated to the Preneed Funeral Loss Reimbursement Fund as required by § 32-7-50(C)(2) may not exceed the amount of five dollars for each preneed contract.

(C) All sums received by the department pursuant to this section must be held in a separate account maintained by the Office of State Treasurer to be used solely as provided in this section. All interest or other income earned on the fund must be retained by the fund.

(D) Reimbursements from the fund may not exceed the total payment made for preneed funeral services or merchandise or both. Interest or future graduated insurance benefits must not be reimbursed. Upon the death of the beneficiary and the applicant’s compliance with all applicable rules of the department, reimbursement from the fund may be made to the estate of the beneficiary, the purchaser, or applicant with payment jointly to the funeral home providing services or merchandise or both only to the extent to which losses are not bonded or otherwise covered. If the department makes payments from the fund under this section, the department is subrogated in the reimbursed amount and may bring an action against a person, including a preneed licensee. The department may enforce claims it may have for restitution or otherwise and may employ and compensate from the fund consultants, legal counsel, accountants, and other persons it considers appropriate to ensure compliance with this section.

(E) The department shall investigate all applications made and may reject or allow claims in whole or in part. Payment must be made to the extent that monies become available in the fund. Reimbursements for completed claims must be processed in the order in which they are received subject to availability of monies in the fund. The department has complete discretion to determine the order and manner of payment of approved applications. All payments are a matter of privilege and not a right, and a person does not have a right in the fund as a third party beneficiary or otherwise.

(F) The department shall furnish a form of application for reimbursement which shall require the following minimum information:

(1) the name and address of the applicant;

(2) the name and address of the funeral service or funeral director, or both, who caused the loss;

(3) the amount of the alleged loss for which application for reimbursement is made;

(4) a copy of a preneed funeral contract or written agreement which was the basis of the alleged loss;

(5) a copy of payment receipts or canceled checks, or both;

(6) a copy of the death certificate;

(7) a general statement of facts relative to the application;

(8) supporting documents, including copies of court proceedings and other papers indicating the efforts of the applicant to obtain reimbursement from the provider, insurance companies, or others;

(9) documentation of receipt of funds in partial payment of the loss;

(10) name and address of the funeral home that provided services or merchandise or both.

(G) This fund and all interest earned may be used only as prescribed in this section and may not be used for another purpose. The department may expend monies from the fund to:

(1) make reimbursements on approved applications;

(2) purchase insurance to cover losses and department liability as considered appropriate by the department and not inconsistent with the purpose of the fund;

(3) invest portions of the fund as are not currently needed to reimburse losses and maintain adequate reserves, as are permitted to be made by fiduciaries under state law;

(4) pay the expenses, other than normal operating expenses, of the department for administering the fund, including employment of legal counsel, accountants, consultants, and other persons the department considers necessary to ensure compliance with this section.

(H) A person may not make, publish, disseminate, circulate, or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, poster, or over any radio station or television station, or in any other way any advertisement, announcement, or statement that uses the existence of the fund for the purpose of sales, solicitation, or inducement to purchase any form of preneed contract covered by this chapter.

(I) The department may establish procedures and promulgate regulations it determines necessary to implement the purposes of the section.