Florida Regulations 69K-7.017: Trust Fund Deposits; Funeral and Burial Services and Merchandise Preneed Contract Payments
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(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 Florida Statutes § 497.283 This section shall not apply to preneed contracts sold pursuant to Florida Statutes § 497.462
(2) If the contract payments are made in deferred installments for merchandise and services which are not intended to be delivered as provided in subsection (1), above, then the funds paid on each installment shall be allocated in the manner set forth in the contract.
(3) If the contract does not provide for the allocation of payments as anticipated in subsection (2), above, such payments shall be allocated as follows:
(a) Funds collected for preneed services or merchandise contracts which comply with Florida Statutes § 497.458, shall be deposited in trust as follows: 70 percent of funds collected for services; 100 percent of funds collected for cash advance items; and 30 percent of funds collected or 110 percent of wholesale cost, whichever is greater, for merchandise. For deferred payment contracts the liability for each portion of the contract (services, cash advances and merchandise) shall be divided by the deferred payment price to arrive at the percentages for each portion of the contract. These percentages shall be applied to payments received to determine the amount to be deposited in trust. Once the total liability to the trust is fulfilled, no further deposits need be made to the trust.
(b) Funds collected for preneed services or merchandise contracts which comply with Florida Statutes § 497.464, shall not require allocation. The contract purchaser must make all payments to the Trustee or its servicing agent. The preneed licensee (seller) may receive a distribution of 10% of funds collected by the Trustee. Once the total liability to the trust is fulfilled, no further deposits need be made to the trust.
(4) In the event that funds deposited into trust exceed the amount required by the contract or these rules, the preneed licensee may withdraw the excess funds upon establishing that the total liability to the fund will equal the total corpus on deposit and the funds on deposit can be allocated and balanced on a contract-by-contract basis.
(5) Monthly reports shall be maintained showing the monies received and monies trusted on a contract-by-contract basis. The report shall also reflect the total monies received and trusted and that such trust deposits reconcile with the total monthly contract obligations.
(6) Documentation shall be maintained and be readily retrievable which shall show the calculation of trust liability and the percentage of payments made into the appropriate trust fund.
Rulemaking Authority 497.103 FS. Law Implemented 497.282(8)(d), 497.283, 497.458, 497.462, 497.464 FS. History-New 2-1-95, Amended 5-27-98, 3-5-01, Formerly 3F-7.017, Amended 9-9-18.
Terms Used In Florida Regulations 69K-7.017
- Contract: A legal written agreement that becomes binding when signed.
- Trustee: A person or institution holding and administering property in trust.
(3) If the contract does not provide for the allocation of payments as anticipated in subsection (2), above, such payments shall be allocated as follows:
(a) Funds collected for preneed services or merchandise contracts which comply with Florida Statutes § 497.458, shall be deposited in trust as follows: 70 percent of funds collected for services; 100 percent of funds collected for cash advance items; and 30 percent of funds collected or 110 percent of wholesale cost, whichever is greater, for merchandise. For deferred payment contracts the liability for each portion of the contract (services, cash advances and merchandise) shall be divided by the deferred payment price to arrive at the percentages for each portion of the contract. These percentages shall be applied to payments received to determine the amount to be deposited in trust. Once the total liability to the trust is fulfilled, no further deposits need be made to the trust.
(b) Funds collected for preneed services or merchandise contracts which comply with Florida Statutes § 497.464, shall not require allocation. The contract purchaser must make all payments to the Trustee or its servicing agent. The preneed licensee (seller) may receive a distribution of 10% of funds collected by the Trustee. Once the total liability to the trust is fulfilled, no further deposits need be made to the trust.
(4) In the event that funds deposited into trust exceed the amount required by the contract or these rules, the preneed licensee may withdraw the excess funds upon establishing that the total liability to the fund will equal the total corpus on deposit and the funds on deposit can be allocated and balanced on a contract-by-contract basis.
(5) Monthly reports shall be maintained showing the monies received and monies trusted on a contract-by-contract basis. The report shall also reflect the total monies received and trusted and that such trust deposits reconcile with the total monthly contract obligations.
(6) Documentation shall be maintained and be readily retrievable which shall show the calculation of trust liability and the percentage of payments made into the appropriate trust fund.
Rulemaking Authority 497.103 FS. Law Implemented 497.282(8)(d), 497.283, 497.458, 497.462, 497.464 FS. History-New 2-1-95, Amended 5-27-98, 3-5-01, Formerly 3F-7.017, Amended 9-9-18.