To modify, clarify and update the language regarding preneed license; financial requirements.

 

DEPARTMENT OF FINANCIAL SERVICES

Division of Funeral, Cemetery, and Consumer Services

RULE NO.:RULE TITLE:

69K-5.0016Preneed License; Financial Requirements

PURPOSE AND EFFECT: To modify, clarify and update the language regarding preneed license; financial requirements.

SUMMARY: Update rule language regarding preneed license; financial requirements.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:

The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the Agency.

The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: During discussion of the economic impact of this rule at its Division meeting, the Division, based upon the expertise and experience of its members, and the substance of the rule amendment, determined that a Statement of Estimated Regulatory Costs (SERC) was not necessary because the rule does not impose additional rights, obligations, or duties on any persons or any businesses, and that the rule will not require ratification by the Legislature. No person or interested party submitted additional information regarding the economic impact at that time.

Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

RULEMAKING AUTHORITY: 497.103 FS.

LAW IMPLEMENTED: 497.452, 497.453 FS.

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE SCHEDULED AND ANNOUNCED IN THE FAR.

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Ellen Simon, Assistant Director, Division of Funeral, Cemetery, and Consumer Services, Department of Financial Services, 200 East Gaines Street, Tallahassee, Florida 32399-0361, [phone], Ellen [e-mail].

 

THE FULL TEXT OF THE PROPOSED RULE IS:

 

69K-5.0016 Preneed License; Financial Requirements.

(1) For the purposes of this section, “Total preneed contracts” is defined as the total retail value of all outstanding preneed contracts.

(2)(1) A Preneed Licensee or applicant must meet and maintain the following requirements on an annual basis, demonstrating its ability to discharge its liabilities as they become due in the normal course of business and must have sufficient funds available to perform its obligation under its existing preneed contracts.

(a)(2) A Preneed Licensee or applicant must submit its most recent year-end financial statements (including a balance sheet and income statement) with the Preneed License application and annually thereafter as provided in Section 497.453(1), F.S. The financial statements must be prepared in accordance with generally accepted accounting principles (GAAP) as those principles have been defined by the Florida Board of Accountancy in Chapter 61H1-20, F.A.C. If the applicant does not have the minimum net worth as set forth in section three (3) or lacks sufficient liquid assets to satisfy current liabilities or does not appear to have any substantial long-term assets, the Department shall request additional financial information concerning financial statements and the statement of cash flows.

(b)(3) For the purpose of this rule, total preneed contracts will mean the total retail value of all outstanding preneed contracts. The Preneed Licensee’s financial statements must demonstrate the following levels of net worth:

1.(a) Preneed Licensee that has total preneed contracts $100,000 or less-$10,000 net worth;

2.(b) Preneed Licensee that has total preneed contracts of $100,001 to $200,000-$20,000 net worth;

3.(c) Preneed Licensee that has total preneed contracts of $200,001 to $400,000-$40,000 net worth;

4.(d) Preneed Licensee that has total preneed contracts of $400,001 to 600,000-$60,000 net worth;

5.(e) Preneed Licensee that has total preneed contracts of $600,001 to $800,000-$80,000 net worth.

6.(f) Preneed Licensee that has total preneed contracts in excess of $800,000-$100,000 net worth.

(c)(4) In the case of a Preneed Licensee or applicant offering preneed sales through a subsidiary agent, as provided in Rule 69K-5.0015, F.A.C., the Preneed Licensee or applicant shall execute a guarantee agreement with respect to any contract obligations resulting from preneed sales of such a selling agent.

(3)(5) If the Preneed Licensee or applicant does not meet the financial requirements in subsection (2)(b)(3) above, the entity may voluntarily submit to the Board additional evidence or agree to additional oversight as to its meeting the requirements of subsection (2)(1) above and as a condition of receiving and retaining a Preneed License. Such additional evidence or oversight agreement shall include as appropriate:

(a) through (j) no change

(k) 100% voluntary trusting agreement by the entity,.

(l) Provide a surety bond acceptable to the Department and the Board.

Upon the Board’s review of such additional information or agreements, submitted as stated above, the Board shall issue a Preneed License if such information or agreement results in the Board determining that the applicant or preneed license meets the requirements of Sections 497.452 and 497.453, F.S.

(4)(6) As to all new applicants, this rule will become effective 20 days after filing with the Department of State. As to renewals of existing Preneed Licenses, this rule will become effective on April 1, 2001.

Rulemaking Authority 497.103 FS. Law Implemented 497.452, 497.453 FS. History–New 5-21-95, Amended 12-7-98, 10-18-99, 12-12-00, 6-26-02, Formerly 3F-5.0016,                .

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Ellen Simon, Assistant Director, Division of Funeral, Cemetery, and Consumer Services, Department of Financial Services, 200 East Gaines Street, Tallahassee, Florida 32399-0361, [phone], Ellen [e-mail].

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Board of Funeral, Cemetery, and Consumer Services

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: May 3, 2018

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: May 23, 2018