These rules are being amended to reference the rule citation that incorporates certain forms; correct outdated statutory references and requirements; make editorial changes; and update references to incorporated documents. These proposed rules were ...

Notice of Proposed Rule

 

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 Trusting

69K-7.011Criteria for Filing a Letter of Credit in Lieu of Trusting

69K-7.012Criteria for Filing a Surety Bond in Lieu of Trusting

PURPOSE AND EFFECT: These rules are being amended to reference the rule citation that incorporates certain forms; correct outdated statutory references and requirements; make editorial changes; and update references to incorporated documents. These proposed rules were approved by the Board of Funeral, Cemetery, and Consumer Services at its meeting on April 30, 2015.

SUMMARY: These rule amendments primarily include editorial changes. The substantive changes include adopting the current version of U.S. Department of the Treasury’s Fiscal Service Dept. Circular 570 and adding a requirement to Rule 69K-7.012, F.A.C.

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: The Department conducted an economic analysis of the potential impact of the proposed rule amendments and determined that there will be no adverse economic impact or regulatory increases that would require legislative ratification.

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, 497.461 (4), 497.462 FS.

LAW IMPLEMENTED: 497.458(1), 497.459, 497.460, 497.461, 497.462, 497.463 FS.

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE HELD AT THE DATE, TIME AND PLACE SHOWN BELOW (IF NOT REQUESTED, THIS HEARING WILL NOT BE HELD):

DATE AND TIME: Monday, November 23, 2015, 9:30 a.m. or at the conclusion of the hearing for rules 69K-5.003, 69K-5.0031, 69K-5.004, 69K-5.006, 69K-5.007, F.A.C.

PLACE: 116 Larson Building, 200 East Gaines Street, Tallahassee, Florida

Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 5 days before the workshop/meeting by contacting: Ellen Simon, telephone: [phone] or e-mail: [e-mail]. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).

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, address: 200 East Gaines Street, Tallahassee, Florida 32399-0361, telephone: [phone], e-mail: [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 Trusting.

(1) A preneed licensee that which 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 which report must demonstrate by the following information that each existing trust has been operated in conformance with Chapter 497, F.S.

(a) An itemized listing in numerical order of all contracts which have an existing outstanding liability to the merchandise trust fund as described in Section 497.458, F.S., and Rule 69K-7.006, F.A.C.;

(b) through (e) 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 Specific 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________.

 

69K-7.011 Criteria for Filing a Letter of Credit in Lieu of Maintaining a Trust Fund Trusting.

(1) As provided by subsection Section 497.462(2), F.S., in lieu of utilizing a trust or purchasing a surety bond, a preneed licensee may obtain a letter of credit.

(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., which is hereby incorporated by reference (effective 6-21-01) and available from the Department of Financial Services, Division of Funeral, Cemetery, and Consumer Services, 200 East Gaines Street, Tallahassee, Florida 32399-0361 and meet the following criteria:

(a) The preneed licensee must file with its application the report which demonstrates its existing trust complies with Section 497.458, F.S. (2005), and as set forth in Rule 69K-7.009, F.A.C.;

(b) through (g) No change.

1. The initial thirty fifteen acres licensed as cemetery property pursuant to Section 497.270, F.S., and any contiguous land in which human remains are interred;

2. through 7. No change.

(3) through (5) No change.

Rulemaking Specific Authority 497.103, 497.462 FS. Law Implemented 497.462, 497.463 FS. History–New 3-20-91, Formerly 3D-30.036, Amended 10-25-95, 7-22-97, 6-21-01, Formerly 3F-7.011, Amended________.

 

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

(1) No change.

(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., as set forth in Rule 69K-7.011, F.A.C., and meet the following criteria.:

(a) The preneed licensee must file with its application the report which demonstrates its existing trust complies with Section 497.458 497.283, F.S. (2005), and as set forth in Rule 69K-7.009, F.A.C.  For purposes of reporting under this section with respect to contracts entered into prior to October 1, 1993, the applicant shall demonstrate that its existing trust is in compliance with the provisions of the law in place when the contract was entered into; and

(b) The amount of the bond shall be based on a report documenting the outstanding liabilities of the preneed licensee as prescribed by paragraph Section 497.462(1)(b), F.S., and set forth in Rule 69K-7.010, F.A.C.; however, should no liabilities exist, a minimum of $250,000 will be the initial amount. If the preneed licensee has existing liabilities that are secured by a trust fund account which will remain in place, and desires to secure new preneed sales with a surety bond, the face amount of the bond shall be at least $1,000,000.

(3) The report shall be updated annually as required by paragraph Section 497.462(1)(c), F.S.

(4) The surety bond must be written on An approved form of the surety bond is hereby adopted by the Board, designated as Form DFS-C-2, Surety Bond, adopted in Rule 69K-1.001, F.A.C. hereby incorporated by reference and is available from the Department of Financial Services, Division of Funeral, Cemetery, and Consumer Services, 200 East Gaines Street, Tallahassee, Florida 32399-0361.

(5) The surety company and or its agent, on such bond shall be licensed to do business in the State of Florida., The surety company shall and shall have been in business in this state with a record of successful operations for a period of at least five (5) years prior to the execution of the bond and meet the following criteria:

(a) Have The surety company must have at minimum a Best’s rating of A- with a “Financial Size Category” of at least “X.”.

(b) Have The surety company must have an “underwriting limitation” of not less than $10,000,000 as reported in the U.S. Department of the Treasury’s Fiscal Service Dept. Circular 570, July 1, 2014 Edition, incorporated herein by reference and effective 8-2-01.

(c)  Have been in business in this state with a record of successful operations for a period of at least five (5) years prior to the execution of the bond.

(6) through (8) No change.

Rulemaking Specific 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________.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Ellen Simon, Assistant Director, Division of Funeral, Cemetery, and Consumer Services, Department of Financial Services

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Jeff Atwater, Chief Financial Officer, Department of Financial Services

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: October 21, 2015

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: July 31, 2015