CHAPTER 43-10.1
PRE-NEED FUNERAL SERVICES
43-10.1-01. Definitions. As used in this chapter:
1.
"Cemetery association" means any person, corporation, municipality, association, or<br>organization owning, conducting, or maintaining a cemetery or plot for the burial of<br>dead human bodies.
2.
"Cemetery merchandise" means all service or property to be used in funeral<br>services or burials other than professional service or personal property to be used in<br>funeral services.
3.
"Commissioner" means the securities commissioner.
4.
"Licensed funeral establishment" means a funeral establishment as defined and<br>licensed in accordance with sections 43-10-21 and 43-10-22.
5.
"Person" means any natural person, firm, association, corporation, limited liability<br>company, or agents or employees thereof.
6.
"Pre-need funeral service contract" means any contract, other than an insurance<br>contract, under which for a specified consideration paid in advance in a lump sum or<br>by installments, a person promises, upon the death of a beneficiary named or<br>implied in the contract, to furnish professional service or personal property to be<br>used in funeral services, or to furnish cemetery merchandise.
7.
"Professional service or personal property to be used in funeral services" means all<br>personal property, services, supplies, and equipment normally performed or<br>furnished by a licensed embalmer, a licensed funeral establishment, or a cemetery<br>association including any inside interment receptacles or containers into which a<br>dead human remains may be directly placed, caskets, crypt beds, catafalques, and<br>all other articles of merchandise incident to a funeral service, but excluding any<br>outside interment receptacles into which any inside receptacle or container will be<br>placed, grave lots, grave spaces, grave markers, monuments, tombstones, crypts,<br>niches, and mausoleums unless these items are sold by a companion agreement or<br>in contemplation of a trade or barter which includes the sale or rental of any inside<br>interment receptacles or containers into which a dead human remains may be<br>directly placed, caskets, crypt beds, catafalques, or other articles of merchandise<br>incident to a funeral service.
43-10.1-02. Pre-need funeral service contracts. A person may not engage in the sale
or execution of a pre-need funeral service contract unless that person is the operator, agent,<br>employee, or manager of a licensed funeral establishment or cemetery association. As part of<br>the sale of a pre-need funeral service contract, the seller shall inform the purchaser of the extent<br>to which the person with the duty of burial under section 23-06-03 might be bound by any<br>pre-need funeral arrangements.
43-10.1-03. Annual report filed with commissioner. On or before January thirty-first
of each year, the owner or manager of each cemetery association or licensed funeral<br>establishment that has entered into any pre-need funeral service contracts during the preceding<br>calendar year shall file a report covering the period of the preceding calendar year with the<br>commissioner, which report must include:
1.
The name and address of the licensed funeral establishment or cemetery<br>association and the name and address of the manager or operator thereof.
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2.
The name of the purchaser and beneficiary of each pre-need funeral service<br>contract entered into on behalf of the licensed funeral establishment or cemetery<br>association during the preceding calendar year and the date each contract was<br>made.
3.
The lump sum consideration paid upon such pre-need funeral service contract<br>required to be reported under subsection 2 or the total amount in dollars of any<br>installments paid upon each pre-need funeral service contract required to be<br>reported under subsection 2.
4.
The name and address of the bank, credit union, savings and loan association, or<br>trust company in which such consideration was deposited in accordance with section<br>43-10.1-03.1.
5.
The total in dollars of all sums received as consideration upon pre-need funeral<br>service contracts executed by the licensed funeral establishment or cemetery<br>association or in its behalf during all periods after July 1, 1973, which are undrawn or<br>unexpended and on deposit in a bank, credit union, savings and loan association, or<br>trust company or in the hands of the licensed funeral establishment or cemetery<br>association.
6.
Such other information as may reasonably be required by the commissioner for the<br>purpose of the proper administration of this chapter.
Such report must be accompanied by a filing fee of fifteen dollars and is a public record.
43-10.1-03.1. Payments on pre-need funeral contracts to be deposited - Depository
shall keep record of deposit - Personal property storage. Whenever payments are made to<br>a person upon pre-need funeral service contracts, one hundred percent of the funds collected<br>under the contracts for the sale of professional service or personal property to be used in funeral<br>services and fifty percent of the funds collected under the contracts for the sale of cemetery<br>merchandise must be deposited in or transferred to a trust company in this state or to a federally<br>insured bank, credit union, or savings and loan association in this state, within ten days. The<br>deposit must be placed in a federal deposit insurance corporation or national credit union<br>administration insured certificate of deposit or negotiable debt obligation of the United States<br>government. Payments received from the sale of professional service or personal property to be<br>used in funeral services or cemetery merchandise which cannot or would not be serviced by a<br>licensed funeral establishment or cemetery association in the area where the service or property<br>was sold are specifically included, whether or not the sales might otherwise be considered<br>pre-need funeral service contracts, within the payments to be deposited under this section. The<br>funds may be released or transferred by the bank, credit union, savings and loan association, or<br>trust company to the depositor upon the death of the person for whose benefit the funds were<br>paid. A certified copy of the certificate of death must be furnished to the bank, credit union,<br>savings and loan association, or trust company as prima facie evidence of death. The funds may<br>be released or transferred by the bank, credit union, savings and loan association, or trust<br>company to the person making the payment, before the death of the person for whose benefit the<br>funds are paid, upon a five-day written notice by registered or certified mail made by the bank,<br>credit union, savings and loan association, or trust company to the depositor or transferor at the<br>request of the person making the payment. Upon written request, however, a purchaser of a<br>pre-need funeral service contract may make a certain amount of the pre-need funds irrevocable.<br>The irrevocable amount may not exceed the amount of the allowable asset exclusion used for<br>determining eligibility for medical assistance under section 50-24.1-02.3 at the time the contract<br>is entered. A purchaser of a pre-need funeral service contract has forty-five days from entering<br>the contract to cancel the irrevocable part of the contract by giving notice to the cemetery<br>association or licensed funeral establishment with whom the contract was entered. Any pre-need<br>funeral service contract held by a cemetery association or a licensed funeral establishment must<br>be fully transferable to another cemetery association or funeral establishment licensed under<br>chapter 43-10 or a substantially similar law of another jurisdiction which agrees to accept the<br>obligations.
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A bank, credit union, savings and loan association, or trust company receiving such a
deposit or transfer shall keep a complete record of the deposit or transfer, showing the name of<br>the depositor or transferor, name of the person making payment, name of the person for whose<br>benefit payment is made, and any other pertinent information.
Any personal property to be used in funeral services or cemetery merchandise which is
sold to a purchaser on the basis that it will be identified and marked as belonging to such<br>purchaser, and stored or warehoused for the purchaser, must be stored or warehoused at some<br>location within this state.
43-10.1-04.
Bond.
Each owner or operator of a licensed funeral establishment or
cemetery association, who files an annual report, must file with the commissioner a corporate<br>surety bond approved by the commissioner in an amount deemed adequate by the<br>commissioner running to the state of North Dakota. The bond must be in such form and style as<br>the commissioner may require for the use and benefit of the purchasers or persons making<br>payments upon pre-need funeral service contracts or their estates, or the beneficiary of the<br>pre-need funeral service contract or the beneficiary's estate for damages suffered by them<br>because of the failure to comply with all provisions of the pre-need funeral service contract or the<br>provisions of this chapter.
43-10.1-05.
Verification by commissioner.
Within ninety days after the filing of a
report as required by section 43-10.1-03, the commissioner shall verify the report by mailing to<br>the banks, credit unions, savings and loan associations, or trust companies where the report<br>indicates the consideration has been deposited, a questionnaire which the bank, credit union,<br>savings and loan association, or trust company is requested to complete and return, verifying the<br>facts stated in the report in regard to the contract or the deposit of funds. The commissioner<br>shall verify the facts on additional contracts reported if the commissioner has reason to believe<br>additional verification to be necessary.
43-10.1-06. Special audits - Violations of law. Repealed by S.L. 1979, ch. 463, § 7.
43-10.1-06.1. Fraudulent practices. It is a fraudulent practice and it is unlawful:
1.
For any person knowingly to subscribe to, or make or cause to be made, any<br>material false statement or representation in any report or other document or<br>statement required to be filed under any provision of this chapter, or to omit to state<br>any material statement or fact in any such document or statement which is<br>necessary in order to make the statements made, in light of the circumstances under<br>which they are made, not misleading.
2.
For any person, in connection with the sale of any pre-need funeral service or<br>personal property, directly or indirectly, to employ any device, scheme, or artifice to<br>defraud.
3.
For any person, in connection with the sale of any pre-need funeral service or<br>personal property, directly or indirectly, to make any untrue statement of a material<br>fact or to omit to state a material fact necessary in order to make the statements<br>made, in the light of the circumstances under which they are made, not misleading.
4.
No action may be brought under this section by the commissioner after six years<br>from the date of the violation.
43-10.1-06.2. Orders and injunctions. Whenever it appears to the commissioner either
upon complaint or otherwise, that any person has engaged in, is engaging in, or is about to<br>engage in any act or practice or transaction which is prohibited by this chapter or by any order of<br>the commissioner issued pursuant to any section of this chapter or which is declared to be illegal<br>in this chapter, the commissioner may:
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1.
Issue any order, including cease and desist, stop, and suspension orders, which the<br>commissioner deems necessary or appropriate in the public interest or for the<br>protection of purchasers. In addition to any other remedy authorized by this chapter,<br>the commissioner may impose by order and collect a civil penalty in an amount not<br>to exceed ten thousand dollars for each violation against any person found in an<br>administrative action to have violated this chapter. The commissioner may bring an<br>action in district court to recover penalties under this section. Any person aggrieved<br>by an order issued under this subsection may request a hearing before the<br>commissioner if the request is made, in writing, within ten days after receipt of the<br>order.
The hearing and any appeal therefrom must be held in accordance with
chapter 28-32.
2.
Apply to the district court of any county in this state for an injunction restraining such<br>person and the person's agents, employees, partners, officers, and directors from<br>continuing such act, practice, or transaction of engaging therein or doing any acts in<br>furtherance thereof, and for such other and further relief as the facts may warrant. In<br>any proceeding for an injunction, the commissioner may apply for and on due<br>showing be entitled to have issued the court's subpoena requiring the appearance<br>forthwith of any defendant and the defendant's agents, employees, partners, officers,<br>or directors, and the production of such documents, books, and records as may<br>appear necessary for the hearing upon the petition for an injunction. Upon proof of<br>any of the offenses described in this section, the court may grant such injunction as<br>the facts may warrant. The court may not require the commissioner to post a bond.
43-10.1-06.3. Investigations and subpoenas.
1.
The commissioner in the commissioner's discretion:
a.
May make such public or private investigation within or outside this state as the<br>commissioner deems necessary to determine whether any person has violated<br>or is about to violate any provision of this chapter or any rule or order<br>hereunder, or to aid in the enforcement of this chapter or in the prescribing of<br>rules and forms hereunder.
b.
May require or permit any person to file a statement in writing, under oath or<br>otherwise as the commissioner determines, as to all the facts and<br>circumstances concerning the matter to be investigated.
c.
May publish information concerning any violation of this chapter or any rule or<br>order hereunder.
2.
For the purpose of any investigation or proceeding under this chapter, the<br>commissioner or any officer designated by the commissioner may administer oaths<br>and affirmations, subpoena witnesses, compel their attendance, take evidence, and<br>require the production of any books, papers, correspondence, memoranda,<br>agreements, or other documents or records which the commissioner deems relevant<br>or material to the inquiry.
3.
In case of contumacy by, or refusal to obey a subpoena issued to, any person, the<br>district court, upon application by the commissioner, may issue to the person an<br>order requiring that person to appear before the commissioner, or the officer<br>designated by the commissioner, there to produce documentary evidence if so<br>ordered or to give evidence touching the matter under investigation or in question.<br>Failure to obey the order of the court may be punished by the court as a contempt of<br>court.
4.
No person is excused from attending and testifying or from producing any document<br>or record before the commissioner, or in obedience to the subpoena of the<br>commissioner or any officer designated by the commissioner, or in any proceeding
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instituted by the commissioner, on the ground that the testimony or evidence,<br>documentary or otherwise, required of the person may tend to incriminate that<br>person or subject that person to a penalty or forfeiture; but no individual may be<br>prosecuted or subjected to any penalty or forfeiture for or on account of any<br>transaction, matter, or thing concerning which the individual is compelled, after<br>claiming the privilege against self-incrimination, to testify or produce evidence,<br>documentary or otherwise, except that the individual testifying is not exempt from<br>prosecution and punishment for perjury or contempt committed in testifying.
43-10.1-07.
Prosecution for violations of law.
The commissioner may refer any
evidence available concerning a violation of this chapter or of any rule or order issued under this<br>chapter to the appropriate criminal prosecutor who, with or without the reference, may institute<br>criminal proceedings under this chapter. The criminal prosecutor may apply for and on due<br>showing be issued the court's subpoena requiring the appearance forthwith of any defendant and<br>the defendant's agents, employees, partners, officers, and directors, and the production of any<br>documents, books, and records necessary for the prosecution of the criminal proceedings.
43-10.1-07.1. Administration. The commissioner has the power to promulgate rules
and regulations having the force and effect of law, reasonably necessary to carry out the<br>provisions of this chapter, in accordance with chapter 28-32. Any hearing held and any orders<br>issued pursuant to this chapter must be in accordance with chapter 28-32. In addition to those<br>powers set forth in chapter 28-32, the commissioner has additional powers as set forth in this<br>chapter.
43-10.1-07.2. Statute of limitations. No action may be brought under this chapter by
the commissioner after five years from the date that the commissioner knew or reasonably<br>should have known about the facts that are the basis for the alleged violation. This section does<br>not apply to section 43-10.1-06.1.
43-10.1-08. Penalties.
1.
Any person who willfully violates any provision of this chapter or any rule or order of<br>the commissioner under this chapter is guilty of a class B felony.
2.
An information must be filed or an indictment must be found under this chapter<br>within five years after the commissioner or criminal prosecutor knew or reasonably<br>should have known about the facts that are the basis for the prosecution.
3.
"Willfully" means the person was aware of the consequences of the person's<br>actions, and proof of evil motive or intent to violate the law or knowledge that the law<br>was being violated is not required. Each act or omission is a separate offense, and<br>a prosecution or conviction for an offense does not bar a prosecution or conviction<br>for any other offense.
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Document Outline
chapter 43-10.1 pre-need funeral services
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