By Dutton H.B. No. 2206
77R5369 JMG-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to prepaid funeral contracts.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Sections 154.151(a) and (b), Finance Code, are
1-5 amended to read as follows:
1-6 (a) The department must approve a standard sales contract
1-7 form for prepaid funeral benefits [before the form is used].
1-8 (b) A sales contract for prepaid funeral benefits must:
1-9 (1) be in writing;
1-10 (2) state the name of the funeral provider or other
1-11 person primarily responsible for providing the prepaid funeral
1-12 benefits specified in the contract; [and]
1-13 (3) state the details of the prepaid funeral benefits
1-14 to be provided, including a description and specifications of the
1-15 material used in the caskets or grave vaults to be furnished; and
1-16 (4) provide for reasonable consumer modification of
1-17 funeral benefits at the time of need without penalty.
1-18 SECTION 2. Section 154.154, Finance Code, is amended to read
1-19 as follows:
1-20 Sec. 154.154. [AGREEMENT TO PAY] FINANCE CHARGE. A
1-21 purchaser of a prepaid funeral benefits contract may agree in
1-22 writing to pay the seller a finance charge in accordance with
1-23 Chapter 345 only on an amount due the seller for a funeral-related
1-24 product or service delivered at the time of purchase [on the
2-1 contract].
2-2 SECTION 3. Section 154.155, Finance Code, is amended by
2-3 amending Subsection (e) and adding Subsection (f) to read as
2-4 follows:
2-5 (e) A purchaser who cancels a contract before the 31st day
2-6 after the date of the contract or on the solicitation of the seller
2-7 is entitled to withdraw all money paid to the seller and all
2-8 earnings attributable to that money. If the money is used to
2-9 purchase a new prepaid funeral benefits contract under a
2-10 solicitation by the seller, the new contract must protect the
2-11 purchaser to an extent equal to or greater than that provided by
2-12 the original contract, as determined by the department. Under the
2-13 new contract, the cost to the purchaser of the same or
2-14 substantially the same services or merchandise may not be greater
2-15 than that provided by the canceled contract.
2-16 (f) Earnings attributable to money paid to a seller do not
2-17 include an amount allowed to be withdrawn under Section 154.261.
2-18 SECTION 4. Subchapter D, Chapter 154, Finance Code, is
2-19 amended by adding Section 154.161 to read as follows:
2-20 Sec. 154.161. PURCHASER MAY CHANGE FUNERAL PROVIDER. The
2-21 purchaser of a prepaid funeral benefits contract may change the
2-22 funeral provider without penalty. If the funeral provider before
2-23 the change is also the seller under the contract, the change is
2-24 considered a cancellation of the contract.
2-25 SECTION 5. Section 154.203, Finance Code, is amended by
2-26 adding Subsection (c) to read as follows:
2-27 (c) An insurance-funded sales contract for prepaid funeral
3-1 benefits may not provide for premium payments that in the aggregate
3-2 would exceed the face value of the insurance policy.
3-3 SECTION 6. Subchapter E, Chapter 154, Finance Code, is
3-4 amended by adding Section 154.209 to read as follows:
3-5 Sec. 154.209. PAYMENT OF BENEFITS. At the time of death, an
3-6 insurance company shall pay any benefits in excess of the cost of
3-7 the funeral to the deceased's estate or a named beneficiary other
3-8 than a seller or funeral provider that is a party to the prepaid
3-9 funeral benefits contract.
3-10 SECTION 7. Section 154.156, Finance Code, is repealed.
3-11 SECTION 8. This Act takes effect September 1, 2001, and
3-12 applies only to a contract entered into on or after September 1,
3-13 2001. A contract entered into before September 1, 2001, is governed
3-14 by the law as it existed immediately before the effective date of
3-15 this Act, and that law is continued in effect for that purpose.