CurrentAlabama Department of InsurancePolicy 2012-04

Sale and documentation of return of mortal remains plans sold with preneed contracts

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Governs offering, sale, documentation, and financial handling of "return of mortal remains plans" sold in conjunction with preneed funeral or cemetery contracts in Alabama and obligations of preneed providers and plan providers.

Policy Summary

PayerAlabama Department of Insurance

PolicySale and documentation of return of mortal remains plans sold with preneed contracts

Policy CodePolicy 2012-04

Change TypeNo material changes

Effective DateJul 9, 2012

Next Review Date

Key ActionOffer and sell return of mortal remains plans only with registration and a written agreement describing remittance and terms.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

SeparateSeparate documentation required

ImmediateImmediate remittance required

WrittenWritten agreement expected

FormsForms & disclosures required

Return of Mortal Remains Plan Requirements

Return of mortal remains plan requirements

Requirements for preneed providers offering return of mortal remains plans:

A return of mortal remains plan may be offered in conjunction with the sale of a preneed contract; a foreign (non-Alabama) business entity shown as the provider or seller must be registered with the Alabama Secretary of State as required.

Preneeds offering such plans should have a written agreement with the plan provider describing the terms, conditions, and restrictions under which the plan is offered, including how plan payments are remitted and any amount or formula paid to the preneed provider for selling the plan.

The sale of a return of mortal remains plan must be documented separately from the preneed contract; the plan shall not be listed as merchandise or services in the preneed contract and its cost shall not be included in the preneed contract total price.

Plan price must be collected at the time of sale or paid by a distinct installment agreement; if sold on installment, the plan price shall not be financed as part of the preneed contract price.

Payments for return of mortal remains plans must be kept separate from preneed funds: no portion of such payments shall be deposited in a preneed merchandise and services trust or otherwise treated as preneed contract payments, and funds collected must be immediately remitted to the plan provider.

The plan provider must furnish to the preneed provider the following materials for prospective purchasers: (a) a brochure or flier describing benefits, terms, limitations, and price; (b) the enrollment/application form identifying price and installment terms if applicable; (c) the form of certificate or evidence of coverage; and (d) if not included in the certificate, a description of benefits, terms, limitations, and claims submission procedures.

All such forms must clearly identify the entity undertaking to provide or arrange services or merchandise and must state the entity's mailing and physical addresses, voice and facsimile telephone numbers, and electronic mail address.

If the plan provider relies on the preneed provider to deliver documentation to a buyer, the preneed provider shall promptly deliver that documentation to the buyer.

Copies of completed return of mortal remains plan transaction documents must be maintained by the preneed provider in the buyer's preneed contract file and be made available to the Department upon request or as part of a preneed examination.

Coding & Funds Handling

Not applicablemixed

No codes listed

No codes providedmixed

No codes listed

Funds handling for return of mortal remains plans

Treatment of plan paymentsPayments collected for return of mortal remains plans must not be deposited in a preneed merchandise and services trust or otherwise treated as preneed contract payments.

Remittance timingFunds collected for a return of mortal remains plan shall be immediately remitted to the plan provider.

Separate accountingAmounts collected for return plans must be accounted for separately from amounts paid for preneed contracts.

Prohibition on financing via preneedIf the plan is sold via installments, the plan price shall not be financed as part of the price of the preneed contract.

Offering and Selling Return of Mortal Remains Plans

Prior Authorization

Offer/sell return of mortal remains plans — registration and written agreement required

A return of mortal remains plan may be offered in conjunction with a preneed contract, provided any foreign (non‑Alabama) plan provider is registered with the Alabama Secretary of State as required. Preneeds offering such plans must have a written agreement with the plan provider describing terms, remittance of plan funds, compensation to the preneed seller, and any third‑party performance arrangements.

Foreign (non‑Alabama) plan providers must register through the Alabama Secretary of State as required by the Alabama Business and Nonprofit Entity Code.
Written agreement should describe terms, conditions, restrictions, how plan costs are remitted, and the amount or formula for payment to the preneed provider.

Key Definition

Return of mortal remains plan — definition

DefinitionA return of mortal remains plan is a contract or agreement, sold in conjunction with a preneed contract, where a third-party provider (other than the preneed seller) agrees, in exchange for payment, to arrange or provide transportation/return of mortal remains; it may include membership arrangements, payment to others, direct performance of services, and may include services or merchandise such as embalming or a shipping container.

Relationship to preneed contractThe plan is sold in conjunction with, but separate from, the preneed funeral or cemetery contract and may address transportation excluded from the preneed contract.

ScopeIntended to be broadly interpreted to reach all pre-paid arrangements sold with preneed contracts where transportation is not already part of, or is excluded by, a preneed contract.

Policy Summary

PayerAlabama Department of Insurance

PolicySale and documentation of return of mortal remains plans sold with preneed contracts

Policy CodePolicy 2012-04

Change TypeNo material changes

Effective DateJul 9, 2012

Next Review Date

Key ActionOffer and sell return of mortal remains plans only with registration and a written agreement describing remittance and terms.

SourceLink

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Sale and documentation of return of mortal remains plans sold with preneed contracts

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Return of Mortal Remains Plan Requirements

Return of mortal remains plan requirements

Requirements for preneed providers offering return of mortal remains plans:

Plan price must be collected at the time of sale or paid by a distinct installment agreement; if sold on installment, the plan price shall not be financed as part of the preneed contract price.

If the plan provider relies on the preneed provider to deliver documentation to a buyer, the preneed provider shall promptly deliver that documentation to the buyer.

Coding & Funds Handling

Not applicablemixed

No codes listed

No codes providedmixed

No codes listed

Funds handling for return of mortal remains plans

Treatment of plan paymentsPayments collected for return of mortal remains plans must not be deposited in a preneed merchandise and services trust or otherwise treated as preneed contract payments.

Remittance timingFunds collected for a return of mortal remains plan shall be immediately remitted to the plan provider.

Separate accountingAmounts collected for return plans must be accounted for separately from amounts paid for preneed contracts.

Prohibition on financing via preneedIf the plan is sold via installments, the plan price shall not be financed as part of the price of the preneed contract.

Offering and Selling Return of Mortal Remains Plans

Prior Authorization

Offer/sell return of mortal remains plans — registration and written agreement required

Foreign (non‑Alabama) plan providers must register through the Alabama Secretary of State as required by the Alabama Business and Nonprofit Entity Code.
Written agreement should describe terms, conditions, restrictions, how plan costs are remitted, and the amount or formula for payment to the preneed provider.

Key Definition

Return of mortal remains plan — definition

Relationship to preneed contractThe plan is sold in conjunction with, but separate from, the preneed funeral or cemetery contract and may address transportation excluded from the preneed contract.

ScopeIntended to be broadly interpreted to reach all pre-paid arrangements sold with preneed contracts where transportation is not already part of, or is excluded by, a preneed contract.