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, and to enact in lieu thereof fifteen new sections relating to the same subject for the purpose of changing the law regulating preneed funeral contracts, 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436.015, 436.021, 436.027, 436.031, 436.035, 436.038, 436.053, 436.055, 436.061, 436.067, and 436.069, RSMo 1994, are repealed and fifteen new sections enacted in lieu thereof, to be known as sections 193.265, 436.005, 436.007, 436.015, 436.021, 436.027, 436.031, 436.035, 436.038,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 compliance with this chapter, which report shall contain the following:

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

(b) An indication that the study included tests of compliance with this chapter;

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

(d) A statement of the auditor's conclusion concerning whether the subject entity has complied with this chapter, including an explanation of each area of study where noncompliance was found; and

(e) A statement that the report is intended primarily for the board's determination of the subject entity's compliance with this chapter;

(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;

(3) "Board", the state board of embalmers and funeral directors;

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

(5) "Examination", an engagement with a certified public accountant to prepare a special report on the subject entity's compliance with this chapter which is more limited in scope than an audit or review. An examination may involve whatever procedures are deemed reasonable and appropriate by the state board to determine whether the subject entity has complied with this chapter;

[(3)] (6) "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)] (7) "Person", any individual, partnership, corporation, cooperative, association, or other entity;

[(5)] (8) "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, and only if, the only payments made by the purchaser with regard to the contract are insurance premiums paid to the issuing insurance company;

[(6)] (9) "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)] (10) "Provider", the person obligated to provide the disposition and funeral services, facilities, or merchandise described in a preneed contract;

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

(12) "Review", an engagement with a certified public accountant to prepare a special report on the subject entity's compliance with this chapter, which report shall contain the following representations:

(a) The review was performed to determine whether the subject entity complied with this chapter;

(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 failed to comply with this chapter, the representation shall provide an explanation of such noncompliance;

[(9)] (13) "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, but excluding a licensed life insurance agent selling life insurance policies directly to a purchaser, in which no third party regulated pursuant to this chapter retains any interest in the policy;

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

[(11)] (14) "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) 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 board of embalmers and funeral directors and setting out the then current address and phone number of the 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)] (8) 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, review or 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. If a provider refuses to make available to the division for examination, review or audit the provider's books and records concerning 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 for an order to require the provider to provide access to the division to those books and records. The provider's agreement filed with the 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.

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 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 transfer, or of its intent to cease doing 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 [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, examinations and reviews of the provider's records and a summary of the sellers who have sold preneed contracts on the provider's behalf. The notification shall be accompanied by a notarized statement from the seller, and a certified public accountant who holds a valid permit in Missouri, swearing that the seller's trust accounts and joint accounts are fully funded according to the records of the seller and the financial institutions where the trust and joint accounts are located. Within fifteen days of the receipt of such written notification, the board shall instruct the division to forward to the buyer or transferee identified in the notice copies of any audits, examinations and reviews 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 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 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 board may require the buyer or transferee to pay a photocopy and document search fee as established by the board pursuant to a lawful rule or regulation adopted pursuant to the provisions of chapter 536, RSMo. Provided that the board may waive certain of the above requirements if the transferee is a successor corporation or business entity which assumes all assets and indebtedness of the transferor;

(5) Maintain within the state of Missouri those books and records, or copies of such records, which contain information concerning preneed contracts sold for, on behalf of, or in which the seller is named as provider of the described funeral merchandise or services. Books and 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 fulfillment or cancellation of the preneed contract;

(6) Give written notification to the board, on a form provided by the board, within thirty days of any involuntary reorganization or other change by operation of law 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 by operation of law of a partnership where the provider's business is carried on by a new partnership or entity. Such notification shall provide the 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 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 board within thirty days of any change in the provider's address.

3. The board shall request the division to review the provider's books and records relating to the sale of preneed contracts at least once every four years. The board may also request an examination, review, or an audit as authorized under section 436.055 in relation to complaints referred to the division by the board for investigation, of a provider's books and records relating to the sale of preneed contracts. The board may, in its discretion, request the division to conduct an examination, review or an audit whenever the board deems it is reasonable or appropriate.

[3.] 4. 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.] 5. 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.] 6. 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) 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, those books and records, or copies of such records, which contain information concerning preneed contracts and related agreements with providers and the trustee of preneed trusts regarding such contracts, including copies of all such agreements. Books, records and related agreements with providers and trustees of preneed contracts shall be maintained for a period of at least five years after fulfillment 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, review or 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 examination, review or 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, review 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, review or 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 examination, review or 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, review or audit showing general compliance with the provisions of sections 436.005 to 436.071;

(5) If a seller should refuse to make available to the division for examination, review or audit the seller's 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 or his books and records relating to 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 for an order to require the seller to provide access to the division to the seller's 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 those books and records and the seller's books and records relating to preneed trust records, preneed contracts, provider agreements and those records pertaining to the annual reporting fee. The seller's agreement filed with the 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 subparagraph;

[(5)] (6) 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 board shall request the division to review the seller's books and records relating to the sale of preneed contracts at least once every four years. The board may also request an examination, review or an audit, as authorized under section 436.055, as a result of complaints, referred to the division by the board for investigation, of a seller's books and records relating to the sale of preneed contracts. The board may, in its discretion, request the division to conduct an examination, review or an audit whenever the board deems it is reasonable or appropriate.

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 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, examinations 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. The notification shall be accompanied by a notarized statement from the seller, and a certified public accountant who holds a valid permit in Missouri, swearing that the seller's trust accounts and joint accounts are fully funded according to the records of the seller and the financial institutions where the trust and joint accounts are located. [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 audits, examinations or reviews 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 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 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 board may require the buyer or transferee to pay a photocopy and document search fee as established by the board pursuant to a lawful rule or regulation adopted pursuant to the provisions of chapter 536, RSMo. Provided that the board may waive certain of the above requirements if the transferee is a successor corporation or business entity which assumes all assets and indebtedness of the transferor.

5. A seller shall give written notification to the board, on a form provided by the board, within thirty days of any involuntary reorganization or other change by operation of law 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 by operation of law of a partnership where the seller's business is carried on by a new partnership or entity. Such notification shall provide the 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 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 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 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. 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 expenses, costs and overhead, the seller shall, within thirty days, deposit all subsequent payments into the trust account established pursuant to sections 436.021 and 436.031.

436.031. 1. The trustee of a preneed trust shall be located in Missouri, and 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] funds 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. No investment of trust funds shall be made in any company, or in any product or service of any company, that owns in whole or any part in excess of five percent of the total outstanding equity interest of the preneed seller, or which is owned in whole or any part in excess of five percent of the total outstanding equity interest by that company which received those funds, or was entitled to receive those funds, provided that the limitations stated herein do not prohibit the investment of trust funds in publicly traded companies by the trustee that complies with the reasonable trustee standard with regards to funds placed for investment.

3. The seller of a preneed contract shall be entitled to all income, including[, without limitation,] interest above the annual increase in the consumer price index, dividends, and capital gains, and losses generated by the investment of preneed trust [property] funds regarding such contract, and the trustee of the trust may distribute [all] such 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] funds held in the preneed trust, including principal and undistributed income, below the sum of all deposits and the annual increase in the consumer price index made to such trust pursuant to subsection 1 of this section for all preneed contracts then administered through such trust. As used herein, "consumer price index" means the Consumer Price Index for Urban Wage Earners and Clerical Workers, as determined by the United States Department of Labor; provided, should such consumer price index be restructured subsequent in a manner materially changing its character, the trustee shall change the application of the consumer price index so that as far as is practicable, the intent of the use of the consumer price index shall be continued.

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 seller shall file a notarized annual report with the board signed by the trustee which states:

(1) The amount of funds held in trust at the end of the current reporting period showing a breakdown of the amount attributable to trust income and the amount attributable to deposits;

(2) The amount of funds removed from the trust during the previous year showing a breakdown of the amount removed as a result of maturities, cancellations and income distributions; and

(3) The amount in trust at the end of the previous reporting period.

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

[7.] 8. 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 [made] which were actually placed or were required to be placed 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 or as such other form that might be needed for a person to qualify for public assistance:

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.

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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. 1. 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, the annual reporting fee required under section 436.069 or any other fee identified by the contract as separate from the purchase price.

2. Upon seller's full performance under the provisions of [this section] sections 436.005 through 436.071, the trustee of the preneed trust for the contract shall distribute to the seller from the trust an amount equal to all deposits and the annual increase in the consumer price index made into the trust for the contract. As used herein, "consumer price index" means the Consumer Price Index for Urban Wage Earners and Clerical Workers, as determined by the United States Department of Labor; provided, should such consumer price index be restructured subsequent in a manner materially changing its character, the trustee shall change the application of the consumer price index so that as far as is practicable, the intent of the use of the consumer price index shall be continued.

436.043. 1. In order to provide for full and fair disclosure at such time the purchaser of a preneed contract decides to examine a preneed contract proposal made by a preneed seller other than the preneed seller with whom the purchaser entered into the original contract, the preneed seller making the proposal shall provide the customer with a form, prescribed by the board, comparing the proposed preneed contract with the preneed contract to which the customer currently is a party. A copy of this executed form shall be retained by the preneed seller within the state of Missouri for a period of at least five years after execution by the purchaser.

2. The form required to be provided under subsection 1 of this section shall contain, in a side by side format, a comparative analysis of the current preneed contract of the customer and the proposed preneed contract, and shall include the following:

(1) A description of all the goods and services provided under the current and the proposed contract;

(2) Itemized costs of all such goods and services and the total costs of such goods and services under the current and proposed contract;

(3) A statement of the purchaser's and seller's rights under the current and proposed contract including cancellation and refund rights; and

(4) Any other information deemed by the board to be necessary in order to insure full understanding by the purchaser of the differences between the current and proposed contract so the customer is able to make an informed decision.

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 or as such other form that might be needed for a person to qualify for public assistance:

IRREVOCABLE WAIVER OF RIGHT TO CANCELI 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.

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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 complaints received by the [state] board 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 forwarded from the [state] board using staff who are not connected with the [state] board and 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 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 board.

3. After the filing of such complaint before the board, the proceedings shall be conducted in accordance with the provisions of chapter 621, RSMo. Upon a finding by the board that the grounds, provided for in the complaint, for disciplinary action are met, the board may, singly or in combination, warn, censure or place the person named in the complaint on probation on such terms and conditions as the board deems reasonable and appropriate for a period not to exceed ten years, or administer public or private reprimand.

436.061. 1. Each person who knowingly and willfully violate any provision of sections 436.005 to 436.071, and any officer, director, partner, agent, or employee of such person involved in such violation is guilty of a class D felony. 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, or the United States attorney or a prosecuting attorney, 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.]

436.068. The fees set forth in sections 436.005 to 436.071 shall be collected by the 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 board to offset the cost and expense of administering sections 436.005 to 436.071. All funds transferred from the Missouri preneed fund by the division to the board shall be deposited in the endowed care cemetery and preneed funeral audit 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 board may establish the annual contract reporting fee described in this section by lawful regulation adopted pursuant to chapter 536, RSMo.

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.