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2017 Arkansas Code
Title 23 - Public Utilities and Regulated Industries
Subtitle 2 - Financial Institutions and Securities
Chapter 40 - Arkansas Prepaid Funeral Benefits Law
§ 23-40-122. Cancellation or transfer
Universal Citation: AR Code § 23-40-122 (2017)
- (a) A purchaser may cancel or transfer a prepaid contract under this section, whether revocable or irrevocable, or whether cash-funded or funded by insurance or an annuity, at any time before performance of the contract by the seller, under the following conditions:
- (1) In the case of a cash-funded or trust-funded prepaid contract:
- (A) Before the death of the contract beneficiary, if the prepaid contract is revocable, the purchaser is entitled to receive a refund of not less than one hundred percent (100%) of all sums paid to the seller by the purchaser, not to exceed the contract price;
- (B) After death, if the prepaid contract is revocable, the purchaser or his or her representative is entitled to receive one hundred percent (100%) of the amount paid to the seller by the purchaser, not to exceed the contract price; or
- (C) If the prepaid contract is irrevocable, the purchaser shall not have the right to a refund of any funds paid by him or her or proceeds paid to the seller but shall have the right to change the provider of the contract services and merchandise to a substitute provider, in which event the seller shall transfer to the substitute provider not less than one hundred percent (100%) of the amount paid to the seller by the purchaser, not to exceed the contract price;
- (2) In the case of a prepaid contract funded by life insurance:
- (A) Before the death of the contract beneficiary, if the prepaid contract is revocable, the purchaser shall have the right to receive not less than one hundred percent (100%) of the cash surrender value of the policy used to fund the prepaid contract, not to exceed the premium paid by the purchaser;
- (B) After the death of the contract beneficiary, if the prepaid contract is revocable, the purchaser or his or her designee is entitled to receive not less than one hundred percent (100%) of the policy proceeds paid to the seller, not to exceed the original face amount of the policy; or
- (C)
- (i) Before the death of the contract beneficiary, if the contract is irrevocable, the prepaid contract purchaser shall not have the right to a refund of any funds paid to the seller but shall have the right to change the provider of the prepaid contract services and merchandise to a substitute provider, in which event the seller shall assign or transfer to the substitute provider, as directed by the contract owner, the life insurance policy used to fund the prepaid contract or funds in an amount not less than one hundred percent (100%) of the cash surrender value of the policy used to fund the prepaid contract, not to exceed the premium paid by the purchaser.
- (ii) After the death of the contract beneficiary, the seller shall transfer to the substitute provider not less than one hundred percent (100%) of the policy proceeds paid to the seller, not to exceed the original face amount of the policy; or
- (3) In the case of a prepaid contract funded by an annuity:
- (A) Before the death of the contract beneficiary, if the prepaid contract is revocable, the purchaser is entitled to receive a refund of not less than one hundred percent (100%) of the annuity value, not to exceed the premium paid by the purchaser for the annuity funding the prepaid contract;
- (B) After the death of the contract beneficiary, if the prepaid contract is revocable, the purchaser or his or her designee is entitled to receive not less than one hundred percent (100%) of the annuity proceeds received by the seller, not to exceed the premium paid by the purchaser; or
- (C)
- (i) Before the death of the contract beneficiary, if the prepaid contract is irrevocable, the purchaser shall not have the right to a refund of any funds paid to the seller but shall have the right to change the provider of the prepaid contract services and merchandise to a substitute provider, in which event the seller shall assign or transfer to the substitute provider, as directed by the contract owner, the annuity policy used to fund the prepaid contract, which shall be in an amount of not less than one hundred percent (100%) of the annuity value, not to exceed the premium paid by the purchaser.
- (ii) After the death of the contract beneficiary, the seller shall transfer to the substitute provider not less than one hundred percent (100%) of the annuity proceeds received by the seller, not to exceed the premiums paid by the purchaser.
- (1) In the case of a cash-funded or trust-funded prepaid contract:
- (b)
- (1) A seller or funding life insurance company may collect a fee for the transfer or cancellation of a prepaid contract to a substitute provider.
- (2) The Insurance Commissioner by rule shall establish the fee for a transfer or cancellation of a prepaid contract under subdivision (b)(1) of this section.
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