An Act To Establish a Preneed Life Insurance Producer License and Preneed Life Insurance Product for Prearranged Funeral Plans
Maine Legislature, Session 125, LD 1717
Committee: Insurance and Financial Services
Sponsors: McKANE, DRISCOLL, TUTTLE, VOLK, ALFOND, SULLIVAN
Amends: 24-A MRSA §1420-A, 24-A MRSA §1420-F, 24-A MRSA §1420-Q, 24-A MRSA §2176, 32 MRSA §1400, 32 MRSA §1401, 32 MRSA §1402, 32 MRSA §1455-B

Legislative Document 
No. 1717 
H.P. 1270 
House of Representatives, December 28, 2011 
An Act To Establish a Preneed Life Insurance Producer License and 
Preneed Life Insurance Product for Prearranged Funeral Plans 
Approved for introduction by a majority of the Legislative Council pursuant to Joint Rule 
203. 
Received by the Clerk of the House on December 23, 2011.  Referred to the Committee on 
Insurance and Financial Services pursuant to Joint Rule 308.2 and ordered printed pursuant to 
Joint Rule 401. 
HEATHER J.R. PRIEST 
Clerk 
Presented by Representative McKANE of Newcastle. 
Cosponsored by Representatives: CORNELL du HOUX of Brunswick, DRISCOLL of 
Westbrook, TUTTLE of Sanford, VOLK of Scarborough, Senators: ALFOND of Cumberland, 
SULLIVAN of York. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  24-A MRSA §1420-A, sub-§§8-A and 8-B are enacted to read: 
8-A.  Limited line preneed life insurance.  "Limited line preneed life insurance" 
means a life insurance policy, certificate or annuity that is designated by the purchaser as 
payment for a prearranged funeral or burial plan as described in Title 32, section 1401. 
8-B.  Limited line preneed life insurance producer.  "Limited line preneed life 
insurance producer" means a person who: 
A.  Is licensed by the State Board of Funeral Service for the practice of funeral 
service under Title 32, chapter 21; and 
B.  Is licensed in accordance with section 1420-Q to sell, solicit and negotiate limited 
line preneed life insurance coverage to individuals through a master, corporate, group 
or individual policy. 
Sec. 2.  24-A MRSA §1420-F, sub-§1, ¶K, as enacted by PL 2001, c. 259, §24, 
is amended to read: 
K.  Automobile mechanical breakdown contracts, which are a limited line; and 
Sec. 3.  24-A MRSA §1420-F, sub-§1, ¶L, as repealed and replaced by PL 2007, 
c. 51, §3, is amended to read: 
L.  Insurance offered, sold or solicited in connection with and incidental to the rental 
of rental cars for a period of no more than 60 days, whether at the rental office or by 
preselection of coverage in master, corporate, group or individual agreements, that is 
nontransferable, applies only to the rental car that is the subject of the rental 
agreement and is limited to the following kinds of insurance: 
(1)  Personal accident insurance for renters and other rental car occupants for 
accidental death or dismemberment and for medical expenses resulting from an 
accident that occurs with the rental car during the rental period; 
(2)  Liability insurance that provides protection to the renters and other 
authorized drivers of a rental car for liability arising from the operation or use of 
the rental car during the rental period; 
(3)  Personal effects insurance that provides coverage to renters and other vehicle 
occupants for loss of, or damage to, personal effects in the rental car during the 
rental period; 
(4)  Roadside assistance and emergency sickness protection insurance; and 
(5)  Any other coverage designated by the superintendent.; and 
Sec. 4.  24-A MRSA §1420-F, sub-§1, ¶M is enacted to read: 
M.  Limited line preneed life insurance, which is a limited line. 
Sec. 5.  24-A MRSA §1420-Q is enacted to read: 
§1420-Q.  Limited line preneed life insurance producer license 
Notwithstanding any provision of law to the contrary contained in this subchapter, 
this section governs the licensing of limited line preneed life insurance producers. 
1.  License.  The superintendent shall issue a license to an applicant to act as a 
limited line preneed life insurance producer on receipt of certification from an insurer 
authorized to write life insurance policies and fixed annuity contracts in the State that the 
applicant: 
A.  Is licensed for the practice of funeral service by the State Board of Funeral 
Service; 
B.  Has agreed to act as an agent for that insurer to sell, solicit or negotiate limited 
line preneed life insurance; 
C.  Has completed a course of study and instruction pursuant to subsection 2; and 
D.  Has passed a written examination in accordance with subsection 3. 
A license holder under this section may serve as an agent for more than one insurer 
authorized to write life insurance policies and fixed annuity contracts in the State. 
2.  Instruction.  An applicant for a license under this section must have successfully 
completed a course of study and instruction on life insurance policies and fixed annuity 
contracts that is offered by an insurer authorized to write life insurance policies and fixed 
annuity contracts in the State that has received approval under subsection 4. The course 
of study and instruction must be at least 8 hours in duration and include instruction on: 
A.  The life insurance policies and fixed annuity contracts that may be sold by 
licensees under this section; 
B.  The laws governing prearranged funeral and burial plans, rules adopted by the 
State Board of Funeral Service relating to prearranged funeral and burial plans and 
the forms and filing requirements associated with those laws and rules; and 
C.  The requirements pertaining to disclosures and advertising of information relating 
to prearranged funeral and burial plans, life insurance policies and fixed annuity 
contracts. 
3.  Examination.  The superintendent, following consultation with the State Board of 
Funeral Service, shall develop a uniform written examination for applicants for licensure 
that fairly tests knowledge of the information contained in the course of study and 
instruction required under subsection 2. 
4.  Approval to provide course and to conduct examination.  An insurer 
authorized to write life insurance policies and fixed annuity contracts in the State may 
request approval from the superintendent to provide the course of study and instruction 
pursuant to subsection 2 and administer the examination under subsection 3 by submitting 
a complete outline and description of the course and the proposed manner of conducting 
the examination. 
5.  Investigation.  The superintendent may investigate as the superintendent 
determines necessary the manner of instruction and the examination administered by an 
insurer that has been approved pursuant to subsection 4. 
6.  Revocation of approval.  The superintendent may revoke approval granted to an 
insurer pursuant to subsection 4 after providing 30 days' notice to that insurer. 
7.  Limit of authority.  A limited line preneed life insurance producer licensed under 
this section may not write any coverage or combination of coverages with initial 
guaranteed death benefits on any life that exceed the total cost of the prearranged funeral 
or burial plan as described in Title 32, section 1401. 
8.  Revocation; notification.  A license issued under this section is revoked if the 
license holder ceases to act as an agent for the insurer that provided certification under 
subsection 1 for the license holder.  Not later than the 15th day after the date on which the 
license holder ceases to act as an agent for an insurer, the insurer or license holder shall 
send written notification of the revocation to the superintendent. 
9.  Information regarding new products.  An insurer who provides certification 
under subsection 1 for a license holder shall provide education to that license holder 
regarding new products the license holder may sell, solicit or negotiate to fund 
prearranged funeral and burial plans. 
10.  Rules.  The superintendent may adopt rules to implement this section.  Rules 
adopted pursuant to this subsection are routine technical rules as defined in Title 5, 
chapter 375, subchapter 2-A. 
Sec. 6.  24-A MRSA §2176, as amended by PL 1999, c. 258, §1, is repealed. 
Sec. 7.  32 MRSA §1400, sub-§7 is enacted to read: 
7.  Solicit; solicitation.  "Solicit" means to engage in uninvited telephone or 
door-to-door contact.  "Solicitation" means the action or instance of soliciting. 
Sec. 8.  32 MRSA §1401, sub-§1-A, ¶B, as enacted by PL 2003, c. 109, §3, is 
amended to read: 
B.  An agreement under paragraph A must be in writing and a copy must be furnished 
to the person or the person's legal representative by the mortuary trustee when the 
agreement is executed.  The agreement must identify the parties to the agreement and 
must be signed by a person licensed for the practice of funeral service on behalf of 
the funeral home or funeral establishment.  The agreement may be revocable or 
irrevocable; however, if the agreement is irrevocable, there must be a provision to 
allow for the transfer of the trust account by the appointment of successor trustees.  
The agreement must clearly state terms providing for disposition of excess funds after 
funeral goods and services have been provided.  The agreement must clearly state any 
fees that may be charged against the trust account.  Fees must be reasonable, as 
defined by the board, and may be charged only: 
(1)  Upon transfer of a trust account by the appointment of a successor trustee; 
(2)  Upon revocation of the agreement if the agreement is revocable; and 
(3)  For the actual financial and tax administration of the trust account. 
Sec. 9.  32 MRSA §1401, sub-§2, as enacted by PL 1999, c. 258, §2 and affected 
by §3, is amended to read: 
2.  Rulemaking.  The board shall adopt rules regarding prearranged funeral 
agreements, including, but not limited to: 
A.  The form, format and content of trust agreements; 
B.  Standards regarding when service contracts are required in conjunction with trust 
agreements and the form, format and content of the service contracts; 
C.  The establishment of reasonable fees that may be charged only pursuant to 
subsection 1, paragraph D; and 
D.  Inspection of trust agreements, account information and any related 
documentation.; and 
E.  Rules to coordinate with provisions under Title 24-A, section 1420-Q relating to 
limited line preneed life insurance and limited line preneed life insurance producers. 
Rules adopted pursuant to this section subsection are routine technical rules under the 
Maine Revised Statutes, Title 5, chapter 375, subchapter II-A 2-A. 
Sec. 10.  32 MRSA §1402, as amended by PL 1983, c. 413, §55, is further 
amended to read: 
§1402.  Solicitation of prearranged funerals and funeral business prohibited 
No A funeral home, funeral establishment or person holding a license under this 
chapter shall may not as, or through, an agent or principal solicit a prearranged funeral 
service or plan for any person or persons. "Prearranged funeral service or plan" shall 
mean means any funeral service or plan which that is arranged, planned or determined 
prior to the demise of a person or persons for whom the funeral service is to be 
performed. Funeral homes, funeral establishments and licensees under this chapter may 
enter into contracts or agreements for prearranged funeral services or plans provided that 
as long as they do not in any manner either as, or through, principals or agents solicit 
such that contract or agreement. 
No A funeral home, funeral establishment or person licensed under this chapter shall 
may not pay or cause to be paid, directly or indirectly, any money or other thing of value 
to a person not responsible for payment for the funeral as a commission or gratuity for the 
securing of business for such funeral home, establishment or licensee.  Nothing in this 
section limits or precludes the payment of a commission earned in connection with the 
sale of limited line preneed life insurance by producers of those products who are 
licensed to make sales of those products pursuant to Title 24-A, section 1420-Q. 
Any person who violates this section is guilty of a Class E crime. 
Sec. 11.  32 MRSA §1455-B, sub-§5, as enacted by PL 2007, c. 402, Pt. J, §7, is 
amended to read: 
5.  Unauthorized commission to secure business.  The direct or indirect payment or 
offer of payment of a commission by the licensee or the licensee's agents, assistants or 
employees for the purpose of securing business, except that nothing in this subsection 
limits or precludes the payment of a commission earned in connection with the sale of 
limited line preneed life insurance by producers of those products who are licensed to 
make sales of those products pursuant to Title 24-A, section 1420-Q; 
SUMMARY 
This bill: 
1.  Authorizes a limited line preneed life insurance product and a limited line preneed 
life insurance producer license; 
2.  For purposes of the laws governing funeral practices, limits impermissible 
solicitations to uninvited telephone and door-to-door contacts; 
3.  Authorizes the payment of commissions in connection with the sale of limited line 
preneed life insurance by producers who are duly licensed to make such sales; 
4.  Repeals the prohibition on an insurer retaining or employing a funeral 
establishment or its employees as producers; and 
5.  Requires that an authorized representative of a mortuary sign the prearranged 
funeral or burial plan.