To modify and clarify the language as needed.

 

DEPARTMENT OF FINANCIAL SERVICES

Division of Funeral, Cemetery, and Consumer Services

RULE NOS.:RULE TITLES:

69K-7.009Reporting Requirements for Preneed Licensees Filing an Initial Application to Utilize a Letter of Credit or Surety Bond in Lieu of Maintaining a Trust Fund

69K-7.010Reporting Requirements for Preneed Licensees Utilizing a Surety Bond or Letter of Credit in Lieu of Trusting

69K-7.012Criteria for Filing a Surety Bond in Lieu of Maintaining a Trust Fund

69K-7.0125Alternative Form of Security for Permanent Outer Burial Receptacle Manufacturers

69K-7.017Trust Fund Deposits; Funeral and Burial Services and Merchandise Preneed Contract Payments

PURPOSE AND EFFECT: To modify and clarify the language as needed.

SUMMARY: Rule 69K-7.009, F.A.C.-The amendment modifies and updates rule language as needed and removes the reference to a letter of credit. Rule 69K-7.010, F.A.C.-The amendment modifies and updates rule language as needed and removes the reference to a letter of credit. Rule 69K-7.012, F.A.C.-The amendment modifies and updates rule language as needed and removes the reference to a letter of credit. Rule 69K-7.0125, F.A.C.-The amendment updates rule language removes statutory reference no longer in effect. Rule 69K-7.017, F.A.C.- The amendment updates rule language removes statutory reference no longer in effect.

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, 497.283(2)(c), 497.462 FS.

LAW IMPLEMENTED: 497.282(8)(d), 497.283, 497.283(2)(c), 497.458, 497.458(1), 497.459, 497.460, 497.462, 497.464 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-7.009 Reporting Requirements for Preneed Licensees Filing an Initial Application to Utilize a Letter of Credit or Surety Bond in Lieu of Maintaining a Trust Fund.

(1) A preneed licensee that chooses to purchase a surety bond or letter of credit in lieu of establishing or utilizing a trust must file a report of outstanding liabilities of merchandise and services to be covered under the surety bond or letter of credit, and the report must demonstrate by the following information that each existing trust has been operated in conformance with Chapter 497, F.S.

(a) through (e) No change.

1. through 5. No change.

(2) The report shall be filed in the following manner:

(a) No change.

(b) The report shall accompany the cemetery company’s application on Form DFS-C-1, Application to Use a Letter of Credit or Surety Bond, adopted in Rule 69K-1.001, F.A.C., to the Board for approval of the use of a surety bond or letter of credit pursuant to Sections 497.461 and 497.462, F.S., and Rules 69K-7.011 and 69K-7.012, F.A.C.

(3) No change

Rulemaking Authority 497.103, 497.461, 497.462 FS. Law Implemented 497.458(1), 497.459, 497.460, 497.461, 497.462 FS. History–New 3-20-91, Formerly 3D-30.037, Amended 10-25-95, 5-27-98, Formerly 3F-7.009, Amended 2-9-16,                   .

 

69K-7.010 Reporting Requirements for Preneed Licensees Utilizing a Surety Bond or Letter of Credit in Lieu of Maintaining a Trust Fund.

(1) A preneed licensee which chooses to utilize a surety bond or letter of credit in lieu of maintaining a trust must file a report of outstanding liabilities of merchandise and services to be covered under the surety bond or letter of credit to accompany the application as provided for in Rules 69K-7.012 and 69K-7.011, F.A.C. This report shall be used to determine the amount of the surety bond or letter of credit and shall contain the following information in sequential order:

(a) through (d) No change.

(2) No change.

(3) “Gross replacement or wholesale value” means for all services and facilities rented, seventy percent (70%) of the purchase price; for all cash advance items purchased, one hundred percent (100%) of the purchase price; for all merchandise items purchased, thirty percent (30%) of the purchase price or one hundred ten percent (110%) of the wholesale cost, which ever is greater.

(3)(4) The preneed licensee’s obligation to file this report with the Board shall end upon the preneed licensee ceasing the use of a surety bond or letter of credit.

Rulemaking Authority 497.103, 497.461, 497.462 FS. Law Implemented 497.461, 497.462 FS. History–New 3-20-91, Formerly 3D-30.038, Amended 10-25-95, 5-27-98, Formerly 3F-7.010,                          .

 

69K-7.012 Criteria for Filing a Surety Bond in Lieu of Maintaining a Trust Fund.

(1) As provided by Section 497.462 497.461, F.S., in lieu of utilizing a preneed trust fund a preneed licensee may purchase a surety bond.

(2) For approval, the preneed licensee shall submit to the Board of Funeral, Cemetery, and Consumer Services, Form DFS-C-1, Application to Use a Letter of Credit or Surety Bond, adopted in Rule 69K-1.001, F.A.C., and meet the following criteria:

(a) and (b) No change.

(3) through (5) No change.

(6) The surety company must agree to give the Board and the preneed licensee at least one hundred twenty (120) days written notice if the surety company does not intend to renew the surety bond at the time of expiration. The preneed licensee must agree upon receipt of the notification that the surety bond will not be renewed to immediately:

(a) Purchase another surety bond; or

(b) Secure a letter of credit; or

(b)(c) Establish a preneed trust fund with an initial deposit which shall include:

1. and 2. No change.

(7) and (8) No change.

Rulemaking Authority 497.103, 497.461(4) FS. Law Implemented 497.461, 497.462 FS. History–New 3-20-91, Formerly 3D-30.039, Amended 10-25-95, 7-22-97, 8-2-01, Formerly 3F-7.012, Amended 2-9-16,                         .

 

69K-7.0125 Alternative Form of Security for Permanent Outer Burial Receptacle Manufacturers.

(1) Pursuant to Sections 497.461(12) and 497.283(2)(c), F.S., manufacturers of permanent outer burial receptacles shall be permitted to utilize the alternative form of security as provided in Section 497.283(2), F.S., and this rule, in connection with the sale of permanent outer burial receptacles sold to pre-need sellers in Florida. For purposes of this rule, a “permanent outer burial receptacle” as referred to in Section 497.283(2)(c), F.S., has the same meaning as an “outer burial container,” as defined in Section 497.005(48), F.S.

(2) The alternative form of security available to all permanent outer burial receptacle manufacturers who supply permanent outer burial receptacles to pre-need sellers in Florida, shall be in compliance with Chapter 497, F.S., and shall provide for an Alternative Manufacturers’ Trust, together with a Manufacturers’ Delivery Surety/Guarantee, defined as follows:

(a) and (b) No change.

(c) Manufacturers’ Delivery Surety/Guarantor Qualification.

1. No change.

2. Any Manufacturers’ Delivery Surety/Guarantor approved by the Board who wishes to utilize this rule shall:

a. No change.

b. Submit its financial statements to the Board on an annual basis pursuant to Sections 497.461(13)-(16), F.S.;

b.c. File a copy of all forms, certificates, guarantees and trust agreements and all changes or modifications thereof, to the Board, for review as to legal sufficiency; and

c.d. Guarantee to the pre-need seller pursuant to this rule that its permanent outer burial receptacle products will be available for delivery at any time of need.

3. No change.

Rulemaking Specific Authority 497.103, 497.283(2)(c) FS. Law Implemented 497.283(2)(c) FS. History–New 6-15-95, Amended 3-5-01, Formerly 3F-7.0125,                            .

 

69K-7.017 Trust Fund Deposits; Funeral and Burial Services and Merchandise Preneed Contract Payments.

(1) All payments paid toward any preneed funeral or burial service or merchandise contract shall be trusted pursuant to Section 497.458 or 497.464, F.S., unless such merchandise or service is sold by a cemetery company and such merchandise is delivered or such service performed within 120 days after receipt of the final payment in accordance with Section 497.283, F.S. This section shall not apply to preneed contracts sold pursuant to Section 497.461 or 497.462, F.S.

(2) through (6) No change.

Rulemaking Specific Authority 497.103 FS. Law Implemented 497.282(8)(d), 497.283, 497.458, 497.461, 497.462, 497.464 FS. History–New 2-1-95, Amended 5-27-98, 3-5-01, Formerly 3F-7.017.

 

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