To repeal sections 193.265, 436.005, 436.007, 436.015, 436.021, 436.027, 436.031, 436.035, 436.038, 436.053, 436.055, 436.061, 436.067, and 436.069, RSMo 1994, relating to preneed funeral contracts, and to enact in lieu thereof fifteen new sections relating to the same subject, with penalty provisions.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF MISSOURI,

AS FOLLOWS:

Section A. Sections 193.265, 436.005, 436.007, 436.015, 436.021, 436.027, 436.031, 436.035, 436.038, 436.053, 436.055, 436.061, 436.067, and 436.069, RSMo 1994, are repealed and fifteen new sections enacted in lieu thereof, to be known as sections 193.265, 436.005, 436.007, 436.015, 436.021, 436.027, 436.031, 436.035, 436.038, 436.053, 436.055, 436.061, 436.067, 436.068, and 436.069, to read as follows:

193.265. 1. For the issuance of a certification or copy of a vital record, the applicant shall pay a fee of ten dollars to the state department of revenue. For each vital records fee collected from August 28, 1992, to June 30, 1996, the director of revenue shall credit four dollars to the general revenue fund, three dollars to the children's trust fund as established pursuant to section 210.173, RSMo, two dollars to the Missouri public health services fund established in section 192.900, RSMo, and one dollar shall be deposited in the "Endowed Care Cemetery and Preneed Audit Fund", which is hereby created in the state treasury. Money in the endowed care cemetery and preneed audit fund shall be available by appropriation to the division of professional registration to pay its expenses in administering sections 214.270 to 214.410, RSMo, and sections 436.005 to 436.071, RSMo. All interest earned on money deposited in the endowed care cemetery and preneed audit fund shall be credited to the endowed care cemetery and preneed audit fund. The money deposited in the public health services fund pursuant to this section shall be deposited in a separate account in the fund, and moneys in such account, upon appropriation, shall be used to automate and improve the state vital records system and allow local registrars to issue computer generated certificates of birth and death records of persons who are born or who die in Missouri. Beginning July 1, 1996, for each vital records fee collected, the director of revenue shall credit four dollars to the general revenue fund, five dollars to the children's trust fund and one dollar shall be credited to the endowed care cemetery and preneed audit fund. For any search of the files and records, when no record is found, the state shall be entitled to a fee equal to the amount for a certification of a vital record for a five-year search to be paid by the applicant. For the processing of each legitimation, adoption, court order or recording after the registrant's twelfth birthday, the state shall be entitled to a fee equal to the amount for a certification of a vital record. Except whenever a certified copy or copies of a vital record is required to perfect any claim of any person on relief, or any dependent of any person who was on relief for any claim upon the government of the state or United States, the state registrar shall, upon request, furnish a certified copy or so many certified copies as are necessary, without any fee or compensation therefor.

2. For the issuance of a certification of a birth or death record by the local registrar, the applicant shall pay a fee of ten dollars to the official county health agency. A certified copy of a death record by the local registrar can only be issued within twenty-four hours of receipt of the record by the local registrar. Computer generated certifications of death records may be issued by the local registrar after twenty-four hours of receipt of the records. The fees paid to the official county health agency shall be retained by the local agency for local public health purposes.

436.005. As used in sections 436.005 to 436.071, unless the context otherwise requires, the following terms shall mean:

(1) "Audit", an engagement with a certified public accountant to prepare a special report on the subject entity's internal accounting controls, including preneed books and records, with regard to compliance with those provisions of this chapter identified by the division in its instructions to the accountant, which report shall only contain the following:

(a) Identification of the matters covered by the study;

(b) An indication that the study included tests of compliance with those provisions of this chapter identified by the division;

(c) An evaluation of the subject entity's internal accounting controls with regard to compliance with those provisions of this chapter identified by the division;

(d) A statement of the auditor's conclusion concerning whether the subject entity has materially complied with those provisions of this chapter identified by the division, including an explanation of each area of study where substantial or intentional noncompliance was found; and

(e) A statement that the report is intended specifically for the division's determination of the subject entity's compliance with those provisions of this chapter identified in the division's instructions and that it should not be used for purposes, other than those authorized by this chapter;

[(1)] (2) "Beneficiary", the individual who is to be the subject of the disposition and who will receive funeral services, facilities or merchandise described in a preneed contract;

[(2)] (3) "Division", the division of professional registration of the department of economic development;

[(3)] (4) "Funeral merchandise", caskets, grave vaults, or receptacles, and other personal property incidental to a funeral or burial service, and such term shall [also] not include grave lots, grave space, grave markers, monuments, tombstones, crypts, niches or mausoleums [if, but only if,] unless such items are sold:

(a) By a companion agreement which is sold in contemplation of trade or barter for grave vaults or funeral or burial services and funeral merchandise; or

(b) At prices, in excess of [prevailing market] the seller's current retail prices, intended to be offset by reductions in the costs of funeral or burial services or facilities which are not immediately required;

[(4)] (5) "Person", any individual, partnership, corporation, cooperative, association, or other entity;

[(5)] (6) "Preneed contract", any contract or other arrangement [which requires the current payment of money or other property in consideration] for the final disposition of a dead human body, [or] for funeral or burial services or facilities, or for funeral merchandise, where such disposition, services, facilities or merchandise are not immediately required, and the current payment of money or other property to the seller, or the assignment of a contract of insurance or annuity, or the assignment of the proceeds of a contract of insurance or annuity, or the purchase of a contract of insurance or annuity naming the seller or provider as owner or beneficiary, is required as consideration for the contract; including, but not limited to, an agreement providing for a membership fee or any other fee having as its purpose the furnishing of burial or funeral services or merchandise at a discount[, except for contracts of insurance, including payment of proceeds from contracts of insurance, unless the preneed seller or provider is named as the owner or beneficiary in the contract of insurance]. A preneed contract shall be exempt from the provisions of subdivision (2) of subsection 1 of section 436.021 and subsection 1 of section 436.027 if the only payments made by the purchaser with regard to the contract are insurance premiums paid to the issuing insurance company or its agent;

[(6)] (7) "Preneed trust", a trust established by a seller, as grantor, to receive deposits of, administer, and disburse payments received under preneed contracts by such seller, together with income thereon;

[(7)] (8) "Provider", the person obligated to provide the disposition and funeral services, facilities, or merchandise described in a preneed contract;

[(8)] (9) "Purchaser", the person who is obligated to make payments under a preneed contract;

(10) "Review", an engagement with a certified public accountant to prepare a special report on the subject entity's internal accounting controls, including preneed books and records, regarding substantial or intentional noncompliance with those provisions of this chapter identified by the division in its instructions to the accountant, which report shall only contain the following representations:

(a) That a review was performed to determine whether the subject entity substantially or intentionally failed to comply with those provisions of this chapter identified by the division;

(b) All information included in the books and records pertaining to the preneed contracts is the representation of management;

(c) The procedures employed consist principally of inquiries of the subject's personnel and the performance of analytical procedures;

(d) A review's scope is more limited than that of an audit and, therefore, no opinion is expressed; and

(e) The certified public accountant is not aware of any material modifications that are required to be made for the books and records pertaining to the preneed contracts to comply with generally accepted accounting principles, and, if the subject entity is found to have substantially or intentionally failed to comply with those provisions of this chapter identified by the division, the representation shall provide an explanation of such noncompliance;

[(9)] (11) "Seller", the person who sells a preneed contract to a purchaser and who is obligated to collect and administer [all] any payments made under such preneed contract or any premiums made on an insurance contract or annuity assigned or purchased as consideration for the preneed contract;

[(10)] (12) "State board", the Missouri state board of embalmers and funeral directors;

[(11)] (13) "Trustee", the trustee of a preneed trust, including successor trustees.

436.007. 1. Each preneed contract made after August 13, 1982, shall be void and unenforceable unless:

(1) It is in writing;

(2) It is executed by a seller who is in compliance with the provisions of section 436.021;

(3) It identifies the contract beneficiary and sets out in detail the final disposition of the dead body and funeral services, facilities, and merchandise to be provided;

(4) If the contract requires as consideration the current payment of money or other property to the seller, it identifies the preneed trust into which contract payments shall be deposited, including the name and address of the trustee thereof;

(5) The terms of [such] any trust, the preneed contract and related agreements among two or more of the contract seller, the contract provider, and the trustee of such trust are in compliance with the provisions of sections 436.005 to 436.071;

(6) It contains the name and address of the seller and the provider[.];

(7) It contains a statement that if the purchaser dies or becomes incompetent or incapacitated the purchaser's rights under the preneed contract may be exercised by the purchaser's legal representative or other person designated in the preneed contract; and

(8) It contains a statement in ten-point type that preneed contracts are regulated by the Missouri state board of embalmers and funeral directors and setting out the then current address and phone number of the state board.

2. If a preneed contract does not comply with the provisions of sections 436.005 to 436.071, all payments made under such contract shall be recoverable by the purchaser, his heirs, or legal representative, from the contract seller or other payee thereof, together with interest at the rate of ten percent per annum and all reasonable costs of collection, including attorneys' fees.

3. Each preneed contract made before August 13, 1982, and all payments and disbursements under such contract shall continue to be governed by sections 436.010 to 436.080, as those sections existed at the time the contract was made; but, the provisions of subsection 2 of section 436.035 may be applied to all preneed contracts which are executory on August 13, 1982.

4. Subject to the provisions of subdivision [(5)] (6) of section 436.005, the provisions of sections 436.005 to 436.071 shall apply to the assignment of proceeds of any contract of insurance for the purpose of funding a preneed contract or written in conjunction with a preneed contract. Laws regulating insurance shall not apply to preneed contracts, but shall apply to any insurance sold with a preneed contract.

5. No preneed contract shall become effective unless and until the purchaser thereof has placed his signature in a space provided on such contract, or application therefor, and the purchaser has received a copy of such contract signed by the seller.

6. The seller and the provider of a preneed contract may be the same person.

436.015. 1. No person shall perform or agree to perform the obligations of, or be designated as, the provider under a preneed contract unless, at the time of such performance, agreement or designation:

(1) Such person is licensed by the state board as a funeral establishment pursuant to the provisions of section 333.061, RSMo, but such person need not be licensed as a funeral establishment if he is the owner of real estate situated in Missouri which has been formally dedicated for the burial of dead human bodies and the contract only provides for the delivery of one or more grave vaults at a future time and is in compliance with the provisions of chapter 214, RSMo; and

(2) Such person is registered with the state board and files with the state board a written [consent authorizing the state board to order an examination and if necessary an audit by the staff of the division of professional registration who are not connected with the board of its books and records which contain information concerning preneed contracts sold for, in behalf of, or in which he is named as provider of the described funeral merchandise or services.] agreement separate from the annual report stating that the division may conduct reviews, and audits as authorized hereunder by this section and by section 436.055, of the provider's records regarding the preneed contracts sold for, on behalf of, or in which he is named as provider of the described funeral merchandise or services. If a provider should refuse to make available to the division for review or audit the provider's records regarding the preneed contracts sold for, on behalf of, or in which he is named as provider of the described funeral merchandise or services, the division may petition any circuit court within the state, subject to the provisions of chapter 508, RSMo, for an order to require the provider to provide access to the division to such records. The provider's agreement filed with the state board shall also agree that the circuit court for Cole County shall have personal jurisdiction over the provider in any action brought by the division for an order under this subdivision. If a review of such records discloses evidence of material or repeated failure to perform the preneed contracts substantially in accordance with their terms, or evidence of the provider's substantial or intentional nonperformance or noncompliance with provisions of this chapter, the division shall give the provider and the state board written notice of such evidence of failure to perform or noncompliance. The notice shall include an explanation of the alleged nonperformance or noncompliance. If the provider fails within fifteen business days of the receipt of the division's written notice to explain the nonperformance or noncompliance to the division's satisfaction, the division shall be authorized to order an audit of the provider's books and records pertaining to the preneed contracts. All reviews and audits shall be conducted by either a certified public accountant who is a member of the staff of the division or an independent certified public accountant retained by the division. The person or persons conducting the review or audit shall report directly to the division and the division shall provide a summary of the report to the state board; however, if the review or audit report reveals nonperformance of preneed contracts or substantial or intentional noncompliance with the provisions of this chapter the division shall forward a full copy of the review or audit report to the state board.

2. Each provider under one or more preneed contracts shall:

(1) Furnish the state board in writing with the name and address of each seller authorized by the provider to sell preneed contracts in which the provider is named as such within fifteen days after the provider signs a written agreement or authorization permitting the seller to sell preneed contracts designating or obligating the provider as the "provider" under the contract. This notification requirement shall include a provider who, itself, acts as seller;

(2) File annually with the state board a report which shall contain:

(a) The business name or names of the provider and all addresses from which it engages in the practice of its business;

(b) The name and address of each seller with whom it has entered into a written agreement since last filing a report;

(c) The name and address of the custodian of its books and records containing information about preneed contract sales and services;

(3) Cooperate with the state board, the office of the attorney general of Missouri, and the division in any investigation, [examination] review or audit brought under the provisions of sections 436.005 to 436.071;

(4) At least [thirty] sixty days prior to selling, transferring or otherwise disposing of a majority of its business assets, or a majority or controlling interest of its stock if a corporation, or ceasing to do business, on a form provided by the state board, give written notification to the state board and to all sellers with whom it has one or more preneed contracts of its intent to engage in such sale or to cease doing business. In the case of a sale of assets or stock, the written notice shall also contain the name and address of the [purchaser. Upon receipt of such written notification, the state board may take reasonable and necessary action to determine that any preneed contracts which the provider is obligated to service will be satisfied at the time of need. The state board may waive the requirements of this subsection, or may shorten the period of notification whenever in its discretion it determines that compliance with its provisions are not necessary. Failure of the state board to take action regarding such sale or termination of business within thirty days shall constitute such a waiver.] buyer or transferee and shall certify that the provider has disclosed to the buyer or transferee all preneed contracts which have been sold on the provider's behalf and shall consent to the division's release to the buyer or transferee a copy of the audits and reviews of the provider's records and a summary of the sellers who have sold preneed contracts on the provider's behalf. Within fifteen days of the receipt of such written notification, the state board shall instruct the division to forward to the buyer or transferee identified in the notice copies of any review or audit of the provider's records and a summary of the sellers who have sold preneed contracts on behalf of the provider. At least fifteen days prior to purchasing or obtaining a majority of a provider's business assets, the buyer or transferee shall, on a form provided by the state board, agree to assume the provider's obligation to perform each preneed contract sold by a seller. Within fifteen days after the transfer of a majority or controlling interest of the provider's stock, the provider shall, on a form provided by the state board, ratify the provider's obligations to perform each preneed contract sold by a seller on the provider's behalf. Before providing the reports and summary described in this subdivision, the state board may require the buyer or transferee to pay a photocopy and document search fee as established by the state board pursuant to a lawful rule or regulation adopted pursuant to the provisions of chapter 536, RSMo;

(5) Maintain within the state of Missouri records, or copies of such records, which contain information concerning preneed contracts performed by the provider subsequent to the effective date of this section. Records relating to a particular preneed contract, or true and accurate copies thereof, shall be maintained for a period of at least five years after the performance or cancellation of the contract;

(6) Give written notification to the state board, on a form provided by the state board, within thirty days of any reorganization or change of the provider's corporate or business structure which results in a new entity assuming the obligations of performing the preneed contracts sold on the provider's behalf, any death or divorce which results in a transfer of the provider from joint ownership, the filing of an estate inventory by a court appointed representative who is responsible for the operations of the provider as an asset of a probate estate, the change of the provider's name, or any dissolution of a partnership where the provider's business is carried on by a new partnership or entity. Such notification shall provide the state board all applicable information including, but not limited to, the name and address of the new entity, the name of the person who succeeds to the provider's ownership as the result of the death or divorce, the probate executor or the partners to the new partnership or the successors in interest. The notification shall also request the state board to amend the provider's registration to reflect the change and shall also certify that the provider continues to be obligated to perform the preneed contracts sold on its behalf;

(7) Give written notification to the state board within thirty days of any change in the provider's address.

3. It is a violation of the provisions of sections 436.005 to 436.071 and subdivision (3) of section 333.121, RSMo, for any person to sell, transfer or otherwise dispose of the assets of a provider without first complying with the provisions of subdivision (4) of subsection 2 of this section. This violation shall be in addition to the provisions of section 436.061.

4. If any licensed embalmer, funeral director or licensed funeral establishment shall knowingly allow such licensee's name to be designated as the provider under, or used in conjunction with the sale of, any preneed contract, such licensee shall be liable for the provider's obligations under such contract.

5. With respect to a provider or seller licensed under the provisions of chapter 333, RSMo, any violation of the provisions of sections 436.005 to 436.071 shall constitute a violation of subdivision (3) of section 333.121, RSMo.

436.021. 1. No person, including without limitation a person who is a provider under one or more preneed contracts, shall sell, perform or agree to perform the seller's obligations under, or be designated as the seller of, any preneed contract unless, at the time of that sale, performance, agreement, or designation, that person shall:

(1) Be an individual resident of Missouri or a business entity duly authorized to transact business in Missouri;

(2) If the seller has sold or issued a preneed contract which requires as consideration the current payment of money or other property to the seller, have established, as grantor, a preneed trust or trusts with terms consistent with sections 436.005 to 436.071;

(3) Have registered with the state board.

2. Each seller under one or more preneed contracts shall:

(1) Maintain within the state of Missouri, adequate records of all such contracts and related agreements with providers and the trustee of preneed trusts regarding such contracts, including copies of all such agreements for a period of at least five years after the performance or cancellation of the preneed contract;

(2) Notify the state board in writing of the name and address of each provider who has authorized the seller to sell one or more preneed contracts under which the provider is

designated or obligated as the contract's "provider";

(3) File annually with the state board a signed and notarized report on forms provided by the state board. Such a report shall only contain:

(a) The date the report is submitted and the date of the last report;

(b) The name and address of each provider with whom it is under contract;

(c) The total number of preneed contracts sold in Missouri since the filing of the last report;

(d) The total face value of all preneed contracts sold in Missouri since the filing of the last report;

(e) The name and address of the financial institution in Missouri in which it maintains the trust accounts required under the provisions of sections 436.005 to 436.071 and the account numbers of such trust accounts;

[(f) A consent authorizing the state board to order an examination and if necessary an audit by staff of the division of professional registration who are not connected with the board of the trust account, designated by depository and account number. The staff of the division of professional registration in conducting the audit shall not release a detailed accounting of the trust account to the board unless there exist circumstances indicating that the account does not comply with the requirements of sections 436.005 to 436.071, but shall provide the board with a summary of the examination or audit showing general compliance with the provisions of sections 436.005 to 436.071;

(4) File with the state board a consent authorizing the state board to order an examination and if necessary an audit by staff of the division of professional registration who are not connected with the board of its books and records relating to the sale of preneed contracts and the name and address of the person designated by the seller as custodian of these books and records. The staff of the division of professional registration in conducting the audit shall not release a detailed accounting of the trust account to the board unless there exist circumstances indicating that the account does not comply with the requirements of sections 436.005 to 436.071, but shall provide the board with a summary of the examination or audit showing general compliance with the provisions of sections 436.005 to 436.071;]

(4) After August 28, 1996, file with the state board a written agreement separate from the annual report stating that the division may conduct reviews, and audits as authorized by this subdivision and by subdivision (5) of subsection 2 of section 436.021 and section 436.055, of the seller's preneed trust records, preneed contracts, provider agreements and the procedures followed by the seller in preparing its preneed records and those records of the seller pertaining to the annual reporting fee required under section 436.069. If a seller should refuse to make available to the division for review or audit the seller's preneed trust records, preneed contracts, provider agreements and those records pertaining to the annual reporting fee, the division may petition any circuit court within the state, subject to the provisions of chapter 508, RSMo, for an order to require the seller to provide access to the division to the seller's preneed trust records, preneed contracts, provider agreements and those records pertaining to the annual reporting fee. The seller's agreement filed with the state board shall also agree that the circuit court for Cole County shall have personal jurisdiction over the seller in any action brought by the division for an order under this subdivision. If a review of such records discloses substantial or intentional noncompliance with the provisions of this chapter, the division shall give the seller written notice of such noncompliance. The notice shall include an explanation of the alleged noncompliance. If the seller fails within fifteen business days of the date of the division's written notice to explain the noncompliance to the division's satisfaction, the division shall be authorized to order an audit of the seller's books and records pertaining to the sale of preneed contracts. All reviews and audits shall be conducted by either a certified public accountant who is a member of the staff of the division or an independent certified public accountant retained by the division. The person or persons conducting the review or audit shall report directly to the division and shall not disclose to the state board or its attorneys any information regarding the review or audit. The division shall provide only a summary of the review or audit report to the state board, unless the review and/or audit shows substantial or intentional noncompliance with this chapter, in which case the division shall provide the state board a full copy of the report;

(5) Cooperate with the state board, the office of the attorney general, and the division in any investigation, [examination] review or audit brought under the provisions of sections 436.005 to 436.071.

3. The division shall review the preneed contract and trust records of each seller at least once every four years. The division may also order a review, or an audit as authorized under section 436.055 in relation to complaints referred to the division by the state board for investigation, of a seller's preneed contracts and trust books and records based on complaints received by the state board that provide evidence of the seller's substantial or intentional noncompliance with this chapter. The state board may, in its discretion, order the division to conduct a review or an audit whenever the state board deems it is necessary to ensure that the trusts assets and contracts of the seller will be transferred to a buyer or transferee of a seller's business and shall be set aside and used to service outstanding preneed contracts pursuant to subsection 4 of this section.

[3.] 4. At least sixty days prior to selling, transferring or otherwise disposing of a majority of its business assets, or a majority or controlling interest of its stock if a corporation, or ceasing to do business as a seller, the seller shall, on a form provided by the state board, provide written notification to the state board of its intent to engage in such sale [at least sixty days prior to the date set for the closing of the sale] or transfer, or of its intent to cease doing business [at least sixty days prior to the date set for termination of its business]. In the case of a sale or transfer of assets or stock, the written notice shall also contain the name and address of the buyer or transferee and shall certify that the seller has disclosed to the buyer or transferee all preneed contracts still in force and subject to chapter 436, RSMo, and shall consent to the division's release to the buyer or transferee a copy of the audits and reviews of the seller's preneed records. Such certification shall identify each preneed contract by the designated provider. The written notice shall be sent, at the same time as it is provided to the state board, to all providers who are then obligated to provide funeral services or merchandise under preneed contracts sold by the seller. [Upon] Within fifteen days of the receipt of the written notification, the state board [may take reasonable and necessary action to determine that the seller has made proper plans to assure that the trust assets of the seller will be set aside and used to service outstanding preneed contracts sold by the seller. The state board may waive the requirements of this subsection or may shorten the period of notification whenever in its discretion it determines that compliance with its provisions are not necessary. Failure of the state board to take action regarding such sale or termination of business within sixty days shall constitute such a waiver.] shall instruct the division to forward to the buyer or transferee identified in the notification copies of any reviews or audits of the seller's records and a summary of the providers for whom the seller has sold preneed contracts. At least fifteen days prior to purchasing a majority of the seller's business assets, the buyer or transferee shall, on a form provided by the state board, agree to assume the seller's obligations to perform each preneed contract sold by the seller. Within fifteen days after the transfer of a majority or controlling interest of the seller's stock, the seller shall, on a form provided by the state board, ratify the seller's obligations to perform each preneed contract sold by the seller. Before providing the report and summary described in this paragraph, the state board may require the buyer or transferee to pay a photocopy and document search fee as established by the state board pursuant to a lawful rule or regulation adopted pursuant to the provisions of chapter 536, RSMo.

5. A seller shall give written notification to the state board, on a form provided by the state board, within thirty days of any reorganization or change of the seller's corporate or business structure which results in a new entity assuming the obligations of performing the seller's preneed contracts, any death or divorce which results in a transfer of the seller from joint ownership, the filing with a circuit court of an estate inventory by a court appointed representative who is responsible for the operations of the seller as an asset of a probate estate, the change of the seller's name, or any dissolution of a partnership where the seller's business is carried on by a new partnership or entity. Such notification shall provide the state board with all applicable information including, but not limited to, the name and address of the new entity, the name of the person who succeeds to the seller's ownership as the result of the death or divorce, the probate executor or the partners to the new partnership or the successors in interest. The notification shall also request the state board to amend the seller's registration to reflect the change and shall also certify the seller continues to be obligated to perform the preneed contracts. A seller shall also give written notification to the state board within thirty days of any change in the seller's address.

[4.] 6. It is a violation of the provisions of sections 436.005 to 436.071 for any person to sell, transfer or otherwise dispose of the assets of a seller without first complying with the provisions of subsection 3 of this section.

436.027. 1. When the preneed contract requires as its consideration the current payment of money or other property to the seller, the seller may retain as his own money[, for the purpose of covering his selling expenses, servicing costs, and general overhead,] the initial funds so collected or paid until he has received for his use and benefit an amount not to exceed twenty percent of the total amount agreed to be paid by the purchaser of such prepaid funeral benefits as such total amount is reflected in the contract. After the seller has retained the initial twenty percent allowed by this section, the seller shall deposit all subsequent payments received from the purchaser into the trust established pursuant to sections 436.021 and 436.031 within sixty days of receipt by the seller or its agent. That portion of the purchaser's payments which are applied to any finance charges, credit life premiums, the annual reporting fee required under section 436.069 or any other fee identified by the contract as separate from the purchase price shall not be subject to the trusting requirement established by this subsection.

2. A seller may include in a preneed contract the sale of grave lots, spaces, markers, monuments, lawn crypts, niches, or mausoleum crypts. If such property is included in a preneed contract, the seller shall not be required to trust the payments applied to the sales price of grave lots, spaces, markers, monuments, lawn crypts, niches, or mausoleum crypts if all of the following requirements are satisfied: the preneed contract shall explain how each of the purchaser's payments are to be applied to the funeral merchandise and the separate items of cemetery property, including the amount or percentage applied to each such item; the preneed contract does not allocate to any such item a higher sales price than the current retail price charged by the provider for those items at the time the preneed contract is entered into; neither the preneed contract or the seller offers to barter or trade such items for funeral merchandise or funeral or burial services or facilities for the purpose of avoiding the trusting requirements of this section; and the preneed contract sets out in ten-point bold type the following statement under the description of the items selected:

THE SELLER AND THE PROVIDER NAMED IN THIS PRENEED CONTRACT ARE PROHIBITED BY MISSOURI LAW FROM ATTEMPTING TO AVOID CERTAIN TRUSTING REQUIREMENTS BY CHARGING YOU A HIGHER PRICE FOR GRAVE LOTS, SPACES, MARKERS, MONUMENTS, LAWN CRYPTS, NICHES, OR MAUSOLEUM CRYPTS THAN THEIR CURRENT RETAIL PRICE FOR SUCH ITEMS OR BY USING SUCH PROPERTY FOR BARTER OR EXCHANGE FOR FUNERAL MERCHANDISE OR SERVICES.

...................

PURCHASER

436.031. 1. The trustee of a preneed trust shall be a state or federally chartered financial institution authorized to exercise trust powers in Missouri. The trustee shall accept all deposits made to it by the seller of a preneed contract and shall hold, administer, and distribute such deposits, in trust, as trust principal, pursuant to the provisions of sections 436.005 to 436.071. Payments regarding two or more preneed contracts may be deposited into and commingled in the same preneed trust, so long as the trust's grantor is the seller of all such preneed contracts and the trustee maintains adequate records of all payments received.

2. All property held in a preneed trust, including principal and undistributed income, shall be invested and reinvested by the trustee thereof. The trustee shall exercise such judgment and care under circumstances then prevailing which men of ordinary prudence, discretion, and intelligence exercise in the management of their own affairs, not in regard to speculation but in regard to the permanent disposition of their funds, considering the probable income therefrom as well as the probable safety of their capital. A preneed trust agreement may provide that when the principal and interest in a preneed trust exceeds two hundred fifty thousand dollars, investment decisions regarding the principal and undistributed income may be made by a federally registered or Missouri-registered independent qualified investment advisor designated by the seller who established the trust; provided, that title to all investment assets shall remain with the trustee and be kept by the trustee to be liquidated upon request of the advisor of the seller. In no case shall control of said assets be divested from the trustee nor shall said assets be placed in any investment which would be beyond the authority of a reasonably prudent trustee to invest in. The trustee shall be relieved of all liability regarding investment decisions made by such qualified investment advisor.

3. The seller of a preneed contract shall be entitled to all income, including, without limitation, interest, dividends, and capital gains, and losses generated by the investment of preneed trust property regarding such contract, and the trustee of the trust may distribute all income, net of losses, to the seller at least annually; but no such income distribution shall be made to the seller if, and to the extent that, the distribution would reduce the aggregate market value on the distribution date of all property held in the preneed trust, including principal and undistributed income, below the sum of all deposits made to such trust pursuant to subsection 1 of this section for all preneed contracts then administered through such trust. For purposes of this subsection, the aggregate market value of property held in a preneed trust shall be determined with regard to government securities which are either the obligation of the United States Government or one of its agencies, or are issued by the state of Missouri, or a county, township, school district or municipality of Missouri, which are not in default, by valuing such government securities at the higher of the preneed trust's cost in the security as determined for federal income tax purposes, or the current market value of the security; except that no less than twenty-five percent of the aggregate market value of property held in the preneed trust is based on the market value of the preneed trust property on the date of distribution without regard to whether the property is a government security described in this subsection.

4. All expenses of establishing and administering a preneed trust, including, without limitation, trustee's fees, legal and accounting fees, investment expenses, and taxes, shall be paid or reimbursed directly by the seller of the preneed contracts administered through such trust and shall not be paid from the principal of a preneed trust.

5. The trustee of a preneed trust shall maintain adequate books of account of all transactions administered through the trust and pertaining to the trust generally. The trustee shall assist seller who established the trust or its successor in interest in the preparation of the annual report described in subdivision (3) of subsection 2 of section 436.021. The seller shall furnish to each contract purchaser, within fifteen days after receipt of the purchaser's written request, a written statement of all deposits made to such trust regarding such purchaser's contract.

6. The trustee of a preneed trust shall, from time to time, distribute trust principal as provided by sections 436.005 to 436.071.

7. A preneed trust shall terminate when trust principal no longer includes any payments made under any preneed contract, and upon such termination the trustee shall distribute all trust property, including principal and undistributed income, to the seller which established the trust.

436.035. 1. At any time before the final disposition of the dead body, or before funeral services, facilities, or merchandise described in a preneed contract are provided by the provider designated in the preneed contract, the purchaser may cancel the contract without cause by delivering written notice thereof to the seller and the provider. Notice of this provision and the appropriate addresses for notice of cancellation of the preneed contract shall be clearly set out in ten-point type in the contract. Within fifteen days after its receipt of such notice, the seller shall pay to the purchaser a net amount equal to all payments required to be made into trust under the contract, including all payments that have been received by the seller that have not yet been deposited into such trust. Upon delivery of the purchaser's receipt for such payment to the trustee, the trustee shall distribute to the seller from the trust an amount equal to all deposits made into the trust for the contract. If the purchaser is provided funeral services, facilities, or merchandise by a funeral establishment or cemetery other than the provider designated in the preneed contract, the seller shall discharge the preneed contract by making a payment pursuant to the following:

(1) If the purchaser has given the seller at least thirty days written notice prior to the beneficiary's death that the beneficiary has changed his primary residence to a location outside of a fifty mile radius of the contract's original provider, and the purchaser redesignates in the written notice a new provider that is also located outside of a fifty mile radius of the original provider, the seller shall, in accordance with section 436.045, pay to the provider identified in the purchaser's notice an amount equal to one hundred percent of the purchaser's payments made towards the preneed contract, except such amount shall not include finance charges, credit life premiums, undistributed income, the annual reporting fee required under section 436.069 or any other fee identified by the contract as separate from the purchase price; or

(2) If the conditions of subdivision (1) of this subsection are not satisfied, the seller shall pay to the funeral establishment or cemetery which provided to the purchaser the funeral services, facilities or merchandise an amount equal to purchaser's payments required to be made into the trust; or

(3) If the purchaser, his legal representative or next of kin provides to the seller a paid receipt executed by the funeral establishment or cemetery that provided such funeral services, facilities or merchandise, the seller shall pay a net amount equal to all payments required to be made into trust under the preneed contract to the purchaser, his legal representative or next of kin who paid for such services, facilities or merchandise.

2. Notwithstanding the provisions of subsection 1 of this section, if a purchaser is eligible, becomes eligible, or desires to become eligible, to receive public assistance under chapter 208, RSMo, or any other applicable state or federal law, the purchaser may irrevocably waive and renounce his right to cancel the contract pursuant to the provisions of subsection 1 of this section, which waiver and renunciation shall be made in writing and delivered to the contract seller; but the purchaser may designate and redesignate the provider in the irrevocable agreement or plan [where applicable by the terms of the contract]. If a purchaser irrevocably waives and renounces his right to cancel a preneed contract, the preneed contract shall be subject to the following:

(1) When the purchaser gives the seller at least thirty days written notice prior to the beneficiary's death that the beneficiary has changed his primary residence to a location outside of a fifty mile radius of the contract's original provider, and the purchaser redesignates in the written notice a new provider that is also located outside of a fifty mile radius of the original provider, the seller shall, in accordance with section 436.045, pay to the provider identified in the purchaser's notice an amount equal to one hundred percent of the purchaser's payments made towards the preneed contract, provided such amount shall not include finance charges, credit life premiums, undistributed income, the annual reporting fee required under section 436.069 or any other fee identified by the contract as separate from the purchase price;

(2) If the conditions of subdivision (1) of this subsection are not satisfied, the seller shall pay to the provider identified in the purchaser's redesignation notice an amount equal to purchaser's payments required to be made into the trust; and

(3) Any waiver or renunciation of the right to cancel shall not become effective unless the purchaser signs a statement set out in ten-point bold type in either the contract application, the contract or in a form separate from the contract in the following form:

IRREVOCABLE WAIVER OF RIGHT TO CANCEL

I AM SIGNING THIS STATEMENT TO WAIVE AND RENOUNCE MY RIGHT TO CANCEL THIS CONTRACT. I WILL NOT BE ENTITLED TO A REFUND OF ANY OF THE MONEY I HAVE PAID. I AM WAIVING MY RIGHT TO CANCEL THIS CONTRACT BECAUSE I WANT TO BE ABLE TO GET PUBLIC ASSISTANCE SUCH AS MEDICAID, SUPPLEMENTAL SECURITY INCOME, OR OTHER PUBLIC ASSISTANCE.

......................

SIGNATURE OF PURCHASER

The seller shall make any payment contemplated by this section to the provider upon receipt of notice signed by the purchaser or the purchaser's next of kin that the provider designated in the purchaser's redesignation notice has either performed the preneed contract or has provided other burial or funeral services and merchandise that is to such person's satisfaction. If the purchaser, the purchaser's legal representative or next of kin provides the seller a paid receipt executed by the funeral establishment or cemetery that performed the purchaser's preneed contract or provided other acceptable burial or funeral services and merchandise, the seller shall make payment to the purchaser, the purchaser's legal representative or next of kin in the amount as provided in this subsection. Upon such payment to either the purchaser's next of kin, the purchaser's legal representative or the provider designated in the purchaser's redesignation notice, all of the seller's and original provider's obligations under the preneed contract shall have been discharged and the trustee of the preneed trust for the contract shall distribute to the seller from the trust an amount equal to all deposits made into the trust for the contract. The redesignation of the provider by the purchaser shall not affect the seller's right to receive income from the preneed trust. This section does not prohibit a seller from agreeing in the preneed contract to provide the purchaser the right to change or redesignate the provider.

3. Notwithstanding the provisions of subsection 1 of this section, any purchaser, within thirty days of receipt of the executed contract, may cancel the contract without cause by delivering written notice thereof to the seller and the provider, and receive a full refund of all payments made on the contract. Notice of this provision and the appropriate addresses for notice of cancellation shall be so designated on the face of the contract.

436.038. If the death of the beneficiary occurs outside the general area served by the provider designated in a preneed contract and the provider does not perform the preneed contract, then the seller shall either provide for the furnishing of comparable funeral services and merchandise by a licensed mortuary selected by the next of kin of the purchaser or, at the seller's option, shall pay over to the purchaser in fulfillment of all obligations under the contract, an amount equal to [all sums actually paid in cash by the purchaser under the preneed contract together with interest to be provided for in the contract] one hundred percent of the purchaser's payments made towards the preneed contract, provided such amount shall not include finance charges, credit life premiums, undistributed income, the annual reporting fee required under section 436.069 or any other fee identified by the contract as separate from the purchase price. Upon seller's full performance under the provisions of this section, the trustee of the preneed trust for the contract shall distribute to the seller from the trust an amount equal to all deposits made into the trust for the contract.

436.053. 1. Notwithstanding the provisions of sections 436.021 to 436.048, the provider and the purchaser may agree that all funds paid the provider by the purchaser shall be deposited with financial institutions chartered and regulated by the federal or state government authorized to do business in Missouri in an account in the joint names and under the joint control of the provider and purchaser. If the purchaser has irrevocably waived and renounced his right to cancel the agreement between the provider and the purchaser pursuant to subdivision (5) of this subsection, such agreement may provide that all funds held in the account at the beneficiary's death shall be applied toward the purchase of funeral or burial services or facilities, or funeral merchandise, selected by the purchaser or the responsible party after the beneficiary's death, in lieu of the detailed identification of such items required by subdivision (3) of subsection 1 of section 436.007. The agreement between the provider and purchaser shall provide that:

(1) The total consideration to be paid by the purchaser under the contract shall be made in one or more payments into the joint account at the time the agreement is executed or, thereafter within five days of receipt, respectively;

(2) The financial institution shall hold, invest, and reinvest the deposited funds in savings accounts, certificates of deposit or other accounts offered to depositors by the financial institutions, as the agreement shall provide;

(3) The income generated by the deposited funds shall be used to pay the reasonable expenses of administering the agreement, and the balance of the income shall be distributed or reinvested as provided in the agreement;

(4) At any time before the final disposition, or before funeral services, facilities, and merchandise described in a preneed contract are furnished, the purchaser may cancel the contract without cause by delivering written notice thereof to the provider and the financial institution, and within fifteen days after its receipt of the notice, the financial institution shall distribute the deposited funds to the purchaser;

(5) Notwithstanding the provisions of subdivision (4) of this subsection, if a purchaser is eligible, becomes eligible, or desires to become eligible to receive public assistance under chapter 208, RSMo, or any other applicable state or federal law, the purchaser may irrevocably waive and renounce his right to cancel such agreement. The waiver and renunciation must be in writing [and must be delivered to the provider and the financial institution;], signed by the purchaser and must set out in ten-point type in either the contract application, the contract or in a form separate from the contract in the following form:

IRREVOCABLE WAIVER OF RIGHT TO CANCEL

I AM SIGNING THIS STATEMENT TO WAIVE AND RENOUNCE MY RIGHT TO CANCEL THIS CONTRACT, I WILL NOT BE ENTITLED TO A REFUND OF ANY OF THE MONEY I HAVE PAID, I AM WAIVING MY RIGHT TO CANCEL THIS CONTRACT BECAUSE I WANT TO BE ABLE TO GET PUBLIC ASSISTANCE SUCH AS MEDICAID, SUPPLEMENTAL SECURITY INCOME, OR OTHER PUBLIC ASSISTANCE.

......................

SIGNATURE OF PURCHASER

The waiver and renunciation must be delivered to the provider and the financial institution;

(6) If the death of the beneficiary occurs outside the general area served by the provider, then the provider shall either provide for the furnishing of comparable funeral services and merchandise by a licensed mortuary selected by the purchaser or, at the provider's option, shall pay over to the purchaser in fulfillment of the obligation of the preneed contract, an amount equal to the sums actually paid in cash by such purchaser under such preneed contract together with interest to be provided for in the contract, in which event the financial institution shall distribute the deposited funds to the provider;

(7) Within fifteen days after a provider and a witness certifies in writing to the financial institution that he has furnished the final disposition, or funeral services, facilities, and merchandise described in a contract, or has provided alternative funeral benefits for the beneficiary pursuant to special arrangements made with the purchaser, if the certification has been approved by the purchaser, then the financial institution shall distribute the deposited funds to the provider.

2. There shall be a separate joint account as described in subsection 1 of this section for each preneed contract sold or arranged under this section.

[3. If the total face value of the contracts sold by a provider operating solely under the provisions of this section does not exceed thirty-five thousand dollars in any one fiscal year, such a provider shall not be required to pay the annual reporting fee for such year required under subsection 1 of section 436.069.]

436.055. 1. All written complaints received by the state board which are signed by an individual, who has personal knowledge of the facts contained therein, and which allege a registrant's noncompliance with the provisions of sections 436.005 to 436.071 shall be forwarded to the division of professional registration for investigation, except minor complaints which the state board can mediate or otherwise dispose of by contacting the parties involved. A copy of each such complaint shall be forwarded to the subject registrant, except that each complaint in which the complainant alleges under oath that a registrant has misappropriated preneed contract payments may be forwarded to the division of professional registration without notice to the subject registrant.

2. The division shall investigate [each complaint] those complaints forwarded [from] to it by the state board by using staff who are not connected with the state board [and]. If after investigating the complaint the division determines there have been no material noncompliance of sections 436.005 to 436.071, the division may dispose of the complaint and provide the state board an explanation of the disposition. In all other cases, the division shall forward the results of such investigation to the subject registrant and to the attorney general for evaluation. If the attorney general, after independent inquiry using staff of the attorney general's office who have not represented the board, determines that there is no probable cause to conclude that the registrant has violated sections 436.005 to 436.071, the registrant and the [state board] division shall be so notified and the complaint shall be dismissed; but, if the attorney general determines that there is such probable cause the registrant shall be so notified and the results of such evaluation shall be transmitted to the state board for further action as provided in sections 436.061, 436.062 and 436.063. If the attorney general's evaluation finds probable cause that chapter 333, RSMo, has also been violated, the division shall notify the state board.

436.061. [1.] Each person who [shall] knowingly and willfully [violate] violates any provision of sections [436.005 to 436.071] 436.027, 436.031, 436.035, 436.038, 436.048, 436.053 or 436.069, and any officer, director, partner, agent, or employee of such person involved in such violation is guilty of a class D felony, and each person who knowingly and willfully violates any other provision of sections 436.005 to 436.071 is guilty of a class C misdemeanor. Each violation of any provision of sections 436.005 to 436.071 constitutes a separate offense and may be prosecuted individually.

[2. Any violation of the provisions of sections 436.005 to 436.071 shall constitute a violation of the provisions of section 407.020, RSMo. In any proceeding brought by the attorney general for a violation of the provisions of sections 436.005 to 436.071, the court may, in addition to imposing the penalties provided for in sections 436.005 to 436.071, order the revocation or suspension of the registration of a defendant seller.]

436.067. No information given to the board, the division or the attorney general pursuant to the provisions of sections 436.005 to 436.071 shall, unless ordered by a court for good cause shown, be produced for inspection or copying by, nor shall the contents thereof be disclosed to, any person other than the seller, or the provider who is the subject thereof, the authorized employee of the board, the attorney general or the division, without the consent of the person who produced such material[.]; however, under such reasonable conditions and terms as the board, the division or the attorney general shall prescribe, such material shall be available for inspection and copying by the person who produced such material or any duly authorized representative of such person. The state board, the division or the attorney general, or his duly authorized assistant, may use such documentary material or copies thereof in the enforcement of the provisions of sections 436.005 to 436.071 by presentation before any court or the administrative hearing commission, but any such material which contains trade secrets shall not be presented except with the approval of the court, or the administrative hearing commission, in which the action is pending after adequate notice to the person furnishing such material. No documentary material provided the board, the division or the attorney general pursuant to the provisions of sections 436.005 to 436.071 shall be disclosed to any person for use in any criminal proceeding, except that this provision shall not prohibit the division from transmitting to a prosecuting attorney, for use in a criminal proceeding, the results from an audit or a review of a seller or provider which demonstrates evidence of substantial or intentional noncompliance with the requirements of sections 436.005 to 436.071.

436.068. The fees set forth in sections 436.005 to 436.071 shall be collected by the state board and deposited with the state treasurer into a fund to be known as the "Missouri Preneed Fund" for use by the division and the state board to offset the cost and expense of administering sections 436.005 to 436.071. All funds transferred from the endowed care cemetery and preneed funeral audit fund by the division to the state board shall be deposited in the Missouri preneed fund. The provisions of section 33.080, RSMo, relating to the transfer of unexpended balances to the general revenue fund shall not apply to the Missouri preneed fund.

436.069. 1. After July 16, 1985, each seller shall remit an annual contract reporting fee in an amount of two dollars for each preneed contract sold in the year since the date the seller filed its last annual contract report with the state board. This reporting fee is in addition to the seller's registration fee and shall be paid annually and may be collected from the purchaser of the preneed contract as an additional charge or remitted to the state board from the funds of the seller. After August 28, 1996, the state board may establish the annual contract reporting fee described in this section by lawful regulation adopted pursuant to chapter 536, RSMo, if such regulation does not restrict the seller's right to collect the fee from the purchaser of the preneed contract.

2. After July 16, 1985, each provider shall remit an annual reporting fee of thirty dollars.

3. The reporting fee authorized by subsections 1 and 2 of this section are in addition to the fees authorized by section 436.071.