2010 Tennessee Code
Title 62 - Professions, Businesses and Trades
Chapter 5 - Funeral Directors and Embalmers
Part 4 - Tennessee Prepaid Funeral Benefits Act
62-5-403 - Part definitions.

62-5-403. Part definitions.

As used in this part, unless the context requires otherwise:

     (1)  “Cash advance item” means any item obtained from a third party and paid for by the funeral provider on the purchaser's behalf. Cash advance items may include, but are not limited to, sales tax, certified copies of death certificates, clergy honoraria, flowers, musicians or singers, obituary notices and gratuities;

     (2)  “Commissioner” means the commissioner of commerce and insurance or the commissioner's designee;

     (3)  “Department” means the department of commerce and insurance;

     (4)  “Guaranteed pre-need funeral contract” means the pre-need seller, where the contract has been funded in accordance with its terms, shall furnish at the time of death of the contract beneficiary, at no additional charge to the next of kin, the estate of the deceased, or other individual or entity responsible for the funeral, the merchandise and services selected, or the equivalent if the specific merchandise is not readily available, in the pre-need funeral contract. The only adjustment in the charge to the next of kin, the estate of the deceased or other individual or entity responsible for the funeral shall be for cash advance items. The pre-need seller shall be obligated to deliver the agreed upon merchandise and services under a fully funded pre-need funeral contract for the available funding at the time of death of the contract beneficiary. Nothing in this section shall be construed to prohibit the pre-need seller from receiving the available funding up to the seller's current retail price for the merchandise and services at the time of death of the contract beneficiary;

     (5)  “Insurance company” means any corporation, limited liability company, association, partnership, society, order, individual or aggregation of individuals engaging in or proposing or attempting to engage as principals in any kind of insurance business, including the exchanging of reciprocal contracts between individuals, partnerships, and corporations;

     (6)  “Nonguaranteed pre-need funeral contract” means, in addition to any cash advance items, the pre-need seller may charge the individual or entity responsible for the funeral any difference between the available funding and the seller's current retail price at the time of death of the contract beneficiary for the merchandise and services selected in the pre-need funeral contract;

     (7)  “Prearrangement insurance policy” means a life insurance policy, annuity contract, or other insurance contract, or any series of contracts or agreements in any form or manner, issued by an insurance company, that, whether by assignment or otherwise, funds a pre-need funeral contract, the insured or annuitant being the person for whose funeral service the funds were paid;

     (8)  (A)  “Pre-need funeral contract” means any agreement, contract or plan requiring the payment of money in advance, whether in a lump sum or installments and whether funded by a pre-need funeral trust or prearrangement insurance policy or combination of a pre-need funeral trust and a prearrangement insurance policy, that is made or entered into with any person, association, partnership, firm or corporation for the final disposition of a dead human body, for funeral or burial services or for the furnishing of personal property or funeral or burial merchandise, wherein the use of the personal property or the funeral or burial merchandise or the furnishing of professional services by a funeral director or embalmer is not immediately required.

          (B)  “Pre-need funeral contract” does not mean the furnishing of cemetery merchandise and services otherwise regulated under title 46, chapter 1, part 2;

     (9)  “Pre-need funeral contract beneficiary” means the person upon whose death the pre-need funeral contract will be performed. This person may also be the purchaser of the pre-need funeral contract;

     (10)  “Pre-need funeral funds” means all payments of cash, or its equivalent, made to a pre-need seller or pre-need sales agent upon any pre-need funeral contract;

     (11)  “Pre-need funeral trust” means funds set aside in a trust account held by a trustee to provide for a pre-need funeral contract;

     (12)  “Pre-need sales agent” means an individual who has applied for and has been granted, or who engages in conduct requiring, registration to sell pre-need funeral contracts on behalf of a pre-need seller pursuant to this part;

     (13)  “Pre-need seller” means a funeral establishment or other individual, firm, partnership, company, corporation, or association that has applied for and has been granted, or that engages in conduct requiring, registration to sell pre-need funeral contracts pursuant to this part;

     (14)  (A)  “Trustee” means a state or national bank, federally chartered savings and loan association, state chartered trust company, or, in the reasonable discretion of the commissioner upon the terms and conditions that the commissioner may require, a securities brokerage firm licensed and in good standing with appropriate state and federal regulatory authorities.

          (B)  Prior to July 1, 2011, “trustee” may also mean a certified public accountant who the commissioner determines meets all of the following requirements:

                (i)  The certified public accountant has served during the 2007 calendar year as the trustee for a trust account established pursuant to this part;

                (ii)  The certified public accountant is covered by errors and omissions liability insurance in an amount equal to or greater than the amount held in trust; and

                (iii)  The certified public accountant has complied with all previous reporting requirements required by statute and rules of the commissioner;

          (C)  On or after July 1, 2011, every trustee of every trust account shall be a trustee as set forth in subdivision (14)(A).

[Acts 2007, ch. 592, § 4; 2008, ch. 857, § 1; 2009, ch. 279, §§ 1-3.]