§36-6125.

§36-6125.
   
   A. 1. The organization may retain from the first funds collected, the
   first ten percent (10%) of the purchase price of all contracts issued
   pursuant to paragraph 1 of subsection B of this section. Thereafter,
   one hundred percent (100%) of all funds collected pursuant to the
   provisions of contracts for prepaid funeral benefits, except for outer
   enclosures as defined by the Funeral Service Licensing Act, shall be
   placed in interest-bearing investments authorized by Article 16 of the
   Insurance Code, except to the extent the Insurance Commission may
   determine that a particular asset may be inappropriate for investment
   for prepaid funeral benefits.
   
   2. For outer enclosures at the option of the organization the first
   thirty-five percent (35%) of the retail price of the outer enclosures
   collected may be retained by the organization. The remaining
   sixty-five percent (65%) of the retail price collected for the outer
   enclosures shall be invested as otherwise provided by this subsection
   pursuant to the provisions of contracts for prepaid funeral benefits.
   
   3. The funds required to be deposited pursuant to paragraphs 1 and 2
   of this subsection shall be deposited within ten (10) days of the end
   of the calendar month after the collection of said funds and shall be
   held in a trust fund in this state for the use, benefit, and
   protection of purchasers of contracts for prepaid funeral benefits.
   Nothing contained within this section shall be construed to prohibit
   an organization authorized to accept prepaid funds from transferring
   the funds held in trust from one trust depository to another if notice
   of the transfer is given to the Insurance Commissioner within ten (10)
   days before the transfer. This subsection shall not affect funds
   invested prior to November 1, 1988.
   
   B. An organization authorized to accept prepaid funds shall be
   authorized to provide purchasers with a choice of either of the
   following types of contracts:
   
   1. A contract for specific and described funeral merchandise and
   service at a guaranteed price. The provisions of this type of contract
   shall provide that interest paid by the organization upon monies
   deposited in trust shall be added to the principal and that principal
   and interest shall become available for disbursement to the
   organization upon the death of the beneficiary and if withdrawal of
   monies occurs prior to death, the net value, plus the amount withheld
   pursuant to paragraph 1 of subsection A of this section, shall be paid
   to the purchaser. Net value shall be determined as provided in
   subsection C of this section; or
   
   2. A contract establishing a fund for prepaid funeral benefits. The
   provisions of this type of contract shall require an initial minimum
   deposit of Twenty-five Dollars ($25.00) and shall grant the purchaser
   the right to add to the fund at his discretion. The provisions of this
   contract shall provide that the funds accumulated shall apply to the
   cost of the funeral services and merchandise selected and that any
   funds remaining unused shall be refunded to the purchaser or to his
   personal representative or designated beneficiary and if withdrawal of
   monies occurs prior to death, the organization may retain from the
   interest, all interest incurred in excess of the minimum amount
   payable pursuant to subsection D of this section less taxes and
   administrative fees. This type of contract shall also bear upon it the
   language: "Exact Funeral Merchandise and Services to be Selected at
   Time of Death".
   
   C. If an organization other than the organization with which the
   purchaser contracted provides funeral merchandise and services upon
   the death of the beneficiary of the contract, the organization with
   whom the purchaser contracted shall forward, upon receipt of request
   in writing from the purchaser or his personal representative, the net
   value of the contract to the organization which provided said
   merchandise and services or to the purchaser or his personal
   representative. The net value of the contract for purposes of this
   section shall be determined by adding the amount of all principal paid
   in pursuant to the provisions of the contract plus all interest
   payable pursuant to subsection D of this section less taxes and
   administrative fees.
   
   D. Funds deposited in trust pursuant to the provisions of either type
   of contract authorized by the provisions of this section shall earn
   for the account of the purchaser a rate of interest which is not less
   than the minimum rate of interest offered by the qualified
   depositories specified in subsection A of this section to their
   savings customers having interest-bearing accounts. The organization,
   in a nondiscriminatory manner, may pay or accrue interest for the
   accounts of purchasers at any rate greater than the minimum rate that
   the organization desires, provided, however, that the organization may
   retain from the interest, all interest incurred in excess of the
   minimum amount payable pursuant to this subsection.
   
   E. A purchaser of either of the types of contracts authorized by the
   provisions of this section may withdraw the net value of the contract
   by signing a statement requesting the withdrawal. The organization
   shall provide a copy of the statement to the Insurance Commissioner.
   The organization shall retain in its files a copy of the statement
   requesting the withdrawal. Withdrawal of funds deposited pursuant to
   the provisions of a contract authorized by the provisions of paragraph
   1 of subsection B of this section shall void the obligation of the
   contracting organization to provide funeral merchandise and services
   at a guaranteed price. Withdrawal forms shall be retained on file for
   at least three (3) years by the organization.
   
   F. Following the death of a beneficiary for whom a contract has been
   purchased, the organization shall prepare a statement, acknowledged by
   the purchaser if the purchaser is not the beneficiary, or by the
   personal representative of the purchaser if the purchaser is the
   beneficiary, setting forth the use of the funds deposited and the
   party to whom any unused funds were disbursed. A copy of this
   statement shall remain in the files of the organization for at least
   three (3) years and a copy shall be delivered to the trust depository.
   Copies of the statement shall also be sent to the Insurance
   Commissioner and the purchaser.
   
   G. After thirty (30) days, a contract of either type authorized by the
   provisions of this section may become irrevocable and not subject to
   withdrawal prior to the death of the beneficiary if the purchaser
   signs an election making said contract irrevocable. This election
   shall not become effective until thirty (30) days after signing the
   original contract.
   
   H. In no event shall more funds be withdrawn or paid pursuant to the
   provisions of one contract than were deposited with the organization
   and which were accumulated as interest. All funds deposited pursuant
   to the provisions of a contract authorized by the provisions of this
   section and deposited pursuant to the terms of this section and the
   interest earned on said funds shall be exempt from attachment,
   garnishment, execution, and the claims of creditors, receivers, or
   trustees in bankruptcy, until such time as the funds have been
   withdrawn from the trust account and paid to the organization or
   refunded to the purchaser.
   
   I. Each organization subject to the provisions of this section shall
   furnish a bond in the form of a cash bond, letter of credit, or
   fidelity bond, to be approved by the Insurance Commissioner, in the
   amount of Three Hundred Thousand Dollars ($300,000.00) or fifteen
   percent (15%) of all funds collected for prepaid funeral benefits,
   whichever is less.
   
   J. Organizations contracting with purchasers for prepaid funeral
   benefits pursuant to paragraphs 1 and 2 of subsection B of this
   section shall be entitled to deduct from the principal and interest
   allocable to the contracts an administrative fee which shall not
   exceed the product of .001146 times the total contract fund including
   accrued interest per month or any major portion thereof.
   
   K. No organization holding a permit issued pursuant to the provisions
   of Sections 6121 and 6124 of this title shall accept any funds except
   pursuant to the provisions of a contract for prepaid funeral or burial
   benefits authorized by the provisions of Sections 6121 through 6136 of
   this title, and no organization shall accept funds from a purchaser in
   excess of the contracted price of prepaid funeral or burial benefits
   purchased.
   
   L. Any organization which knowingly commits any of the acts set forth
   in the first sentence of Section 6121 of this title without first
   having obtained a permit to engage in said activity from the Insurance
   Commissioner, or any organization which commits said acts while
   knowingly operating with an invalid or expired permit, upon
   conviction, shall be guilty of a misdemeanor. Each separate act
   performed without a valid permit shall be deemed a separate offense.
   The punishment upon conviction for such offense shall be a fine not to
   exceed One Thousand Dollars ($1,000.00) or imprisonment in the county
   jail for not less than sixty (60) days nor more than one (1) year, or
   both such fine and imprisonment.