(a)

Terms Used In Tennessee Code 62-5-406

  • Commissioner: means the commissioner of commerce and insurance or the commissioner's designee. See Tennessee Code 62-5-403
  • Contract: A legal written agreement that becomes binding when signed.
  • Funeral establishment: means any business, whether a proprietorship, partnership, firm, association or corporation, engaged in arranging, directing or supervising funerals for profit or other benefit, the preparing of dead human bodies for burial, the disposition of dead human bodies, the provision or maintenance of place for the preparation for disposition, or for the care or disposition of human bodies. See Tennessee Code 62-5-101
  • Guaranteed pre-need funeral contract: means the pre-need seller, where the contract has been funded in accordance with its terms, shall furnish at the time of death of the contract beneficiary, at no additional charge to the next of kin, the estate of the deceased, or other individual or entity responsible for the funeral, the merchandise and services selected, or the equivalent if the specific merchandise is not readily available, in the pre-need funeral contract. See Tennessee Code 62-5-403
  • Pre-need funeral contract: means any agreement, contract or plan requiring the payment of money in advance, whether in a lump sum or installments and whether funded by a pre-need funeral trust or prearrangement insurance policy or combination of a pre-need funeral trust and a prearrangement insurance policy, that is made or entered into with any person, association, partnership, firm or corporation for the final disposition of a dead human body, for funeral or burial services or for the furnishing of personal property or funeral or burial merchandise, wherein the use of the personal property or the funeral or burial merchandise or the furnishing of professional services by a funeral director or embalmer is not immediately required. See Tennessee Code 62-5-403
  • Pre-need funeral trust: means funds set aside in a trust account held by a trustee to provide for a pre-need funeral contract. See Tennessee Code 62-5-403
  • Pre-need sales agent: means an individual who has applied for and has been granted, or who engages in conduct requiring, registration to sell pre-need funeral contracts on behalf of a pre-need seller pursuant to this part. See Tennessee Code 62-5-403
  • Pre-need seller: means a funeral establishment or other individual, firm, partnership, company, corporation, or association that has applied for and has been granted, or that engages in conduct requiring, registration to sell pre-need funeral contracts pursuant to this part. See Tennessee Code 62-5-403
  • Prearrangement insurance policy: means a life insurance policy, annuity contract, or other insurance contract, or any series of contracts or agreements in any form or manner, issued by an insurance company, that, whether by assignment or otherwise, funds a pre-need funeral contract, the insured or annuitant being the person for whose funeral service the funds were paid. See Tennessee Code 62-5-403
  • signed: includes a mark, the name being written near the mark and witnessed, or any other symbol or methodology executed or adopted by a party with intention to authenticate a writing or record, regardless of being witnessed. See Tennessee Code 1-3-105
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • Trust account: A general term that covers all types of accounts in a trust department, such as estates, guardianships, and agencies. Source: OCC
  • Trustee: means a state or national bank, federally chartered savings and loan association, state chartered trust company, or, in the reasonable discretion of the commissioner upon the terms and conditions that the commissioner may require, a securities brokerage firm licensed and in good standing with appropriate state and federal regulatory authorities. See Tennessee Code 62-5-403
  • Trustee: A person or institution holding and administering property in trust.
  • written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(1) No pre-need funeral contract shall be offered in this state until a copy of the contract has been issued by the commissioner for general use.
(2) If no contract has been issued by the commissioner pursuant to subdivision (a)(1), then no pre-need funeral contract shall be offered in this state until a copy of the contract has been filed with and approved by the commissioner. If the commissioner does not disapprove the contract within sixty (60) days after receipt of the request for approval, the contract shall be deemed approved. The commissioner may disapprove a previously approved pre-need funeral contract if the pre-need funeral contract violates this section upon giving notice and an opportunity for a hearing to the pre-need seller.
(b) Each pre-need contract form shall:

(1) Be written in clear and understandable language printed in an easy-to-read type size and style;
(2) Contain space to include the name, address, telephone number, and registration number of the pre-need seller obligated to provide the services under the contract terms, and all the information must be completed before the contract is signed by the purchaser;
(3) Clearly identify whether the contract is a guaranteed pre-need funeral contract or a non-guaranteed pre-need funeral contract; and

(A) If the contract is funded by a pre-need funeral trust, the pre-need funeral contract shall state whether the pre-need funeral trust it establishes is revocable or irrevocable.
(B) If the pre-need funeral trust is irrevocable, the pre-need funeral contract shall state on its face and in bold type the following words: THE PRE-NEED FUNERAL TRUST ACCOUNT ESTABLISHED BY THIS CONTRACT IS IRREVOCABLE, AND THE FUNDS PAID HEREUNDER ARE NOT REFUNDABLE. ACCUMULATED TRUST PRINCIPAL AND INTEREST ARE FREELY TRANSFERABLE TO SATISFY FUNERAL EXPENSES AT ANY LICENSED FUNERAL ESTABLISHMENT AS PROVIDED BY LAW.
(C) If the pre-need funeral trust is revocable, the purchaser of the merchandise or services under the agreement, contract or plan shall be entitled to receive any or all of the payments made and any earnings or interest on the payments, less any applicable fees and expenses permitted by this part, upon demand in writing on the pre-need seller and the trustee. Absent gross negligence or willful misconduct by the trustee, payment by the trustee of the amount held in trust, less any applicable fees and expenses permitted by this part, shall relieve the trustee of further liability to the purchaser in connection with the trust.
(c) No modification of the form, terms, or conditions of the pre-need contract may be made without the prior written approval of the commissioner.
(d) No pre-need funeral contract shall provide for the funeral establishment, pre-need seller, or pre-need sales agent to receive any benefits from a prearrangement insurance policy or moneys from a pre-need funeral trust other than the amount of payment for the merchandise and services provided by the funeral establishment. This subsection (d) shall not prohibit the payment of commissions authorized to be paid under title 56, chapter 6.
(e) This section shall apply only to pre-need funeral contracts executed subsequent to January 1, 2008.
(f) A pre-need seller that is a cemetery company may offer a pre-need funeral contract that covers cemetery merchandise as defined in § 46-1-102, or a pre-need funeral contract that covers both funeral merchandise and cemetery merchandise, on a contract issued by the commissioner or, if the commissioner has not issued a contract, on a contract approved by the commissioner. The pre-need seller that is a cemetery company shall comply with the requirements provided in title 46, chapter 1, for selling cemetery merchandise.
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