An Act Regarding Pre~
Maine Legislature, Session 132, LD 0867
Committee Amendment CA_A_H274 (House)
Amends: 24-A MRSA §2176, 24-A MRSA §2176-A, 32 MRSA §1401, 32 MRSA §1402

COMMJTTEE AMENDMENT"'/\" to H.P. 553, L.D. 867, "An Act Regarding Pre~ 
need Funeral Insurance" 
Amend the bill by striking out everything after the enacting· clause and insetting the 
following: 
'Sec. 1. 24-A MRSA §2176, as amended by PL 1999, c. 258, § 1, is further amended 
to read: 
§2176. Funeral and burial service contracts prohibited 
An insurer may not contract or agree with any funeral director practitioner, funeral 
establishment, mortuary establishment, cemetery, cemetery corporation or association, 
crematorium, mausoleum or columbarium or any ·representative of any of these directors 
practitioners or establishments to the effect that the director practitioner or establishment 
sh-all must conduct the funeral, burial, or cremation or other disposal of the remains of any 
individual insmed by the insurer. An insurer may not retain, utilize or employ any director 
or establishment as a prnducer or agency of the insurer and a director or establishment may 
not act as or purpo1t to be an insurance prnduoer or engage in insurance producer activities. 
Nothing in this section prevents This section does not prevent compliance with Title 39-A, 
section 216, or the use of an insurance policy, including, sLJbject to the provisions of section 
2420, the assignment of rights under life insurance contracts, to prnvide secLJrity for the 
payment for a funeral, burial or cremation or, subject to chapter 27, the naming of a funeral 
heme establishment or funeral director practitioner as beneficiary under a life insurance 
policy to provide payment for a funeral, burial or cremation. Nothing in this This section 
prohibits does not prnhibit the use of an insurance policy as an investment by a 11101tuary 
. trustee pursuant to Title 32, section 1401. 
Sec. 2. 24-A MRSA §2176-A is enacted to read: 
• 
§2176-A. Disclosures required for sale of pre-need insurance in connection with 
prearranged funerals • 
Page I - 132LR0695(02) 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT"~,' to H.P. 553, L.D. 867 
1. Definition. For purposes of this section, "pre-need insurance" means a type of life 
insurance policy designed to cover the costs of funeral and burial services selected in a 
statement of goods and services contract and for which the entire death benefit is paid 
directly to the funeral establishment. 
2. Disclosures. At the time an application is made, and prior'to accepting the applicant's 
initial premium or deposit for a pre-need insurance policy that is being sold in connection 
with a prearranged funeral service or plan· as described in Title 32, section 1402, a producer 
shall adequately disclose the following information: 
A. The fact that a pre-need insurance policy is involved or being used· to fund a 
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prearranged funeral service or plan; 
B. The nature of the relationship among the soliciting producer, the provider of the 
funeral or cemete1y merchandise or services, the administrator and any other person; 
C. The relationship of the pre-need insurance policy to the funding of the preairnnged 
funeral service or plan and the nature and existence of any guararitees relating to the 
prearranged funeral service or plan; 
D. A list of the goods and services that are selected or contracted for in the prearranged 
funeral service or plan and all relevant information concerning the price of the funeral 
and burial services, including an indication that the purchase price is either guaranteed 
at the time of purchase or to be determined at the time of need; 
E. The fact that the face amount of the pre-need insurance policy may not exceed .the 
maximum amount of the goods and services that are contracted for in the prearranged 
funeral service or plan; 
F. All relevant information concerning what occurs and whether any entitlements or 
obligations arise ifthere is a difference between the proceeds of the pre-need insurance 
policy and the amount actually needed to fund the prearranged funeral service or plan; 
G. Any penalties or restrictions, including, but not limited to, geographic restrictions 
or the inability of the provider to perform, on the delive1y of merchandise or services 
or the prearranged funeral service or plan guarantee; and 
H. Whether a sales commission or other form of compensation is being paid for the 
sale of the pre-need insurarice policy and the identity of the individual or entity to 
whom it is paid. 
Sec. 3. 32 MRSA §1401, sub-§1, as amended by PL 2007, c. 402, Pt. J, § 1, is 
fmther amended to read: 
1. Plan requirements, Except as provided in subsection subsections 1-A and 1-B, 
aey .§. prearranged funeral or burial plan contracted or unde1taken within this State must 
comply with the following: 
A. All money paid during a person's lifetime to any individual, firm, association, 
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partnership or corporation, by that person or by someone on behalf of that person, under 
an agreement that services will be performed or personal property will be delivered in 
connection with the disposition of that person's body after death must be deposited by 
the payee within 10 days after receipt of the money in a separate account in a financial 
institution or credit union authorized to do business in this State, as defined in Title 
9-B, section 131, subsections 12-A ~nd 17-A, in the name of the payee as mo1tuary 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT"/:\ to H.P. 553, L,D, 867 
trustee for the person for whose benefit the payment was made and must be held in that 
account together with interest if any, If money is paid by check, share draft or money 
order, the payee shall instruct the payor to make the instrument payable to the financial 
institution or credit union into which it is to be deposited and to include on the 
instrument the name of the mortuary trustee and the person for whose benefit the 
payment was made, 
B. The payee shall deposit the money in either a federally insured deposit or share 
account or a trust account; the type of account must be disclosed to the payor or the 
payor's representative and a deposit in a trnst account may be invested in or used to 
pmchase only the following: 
(1) Federally insured deposit or share accounts; 
(2) Securities issued, insured or guaranteed by the ·united States or by any agency 
or corporate or other instrumentality of the United States; 
(3) Municipal securities that are exempt from registration under Title 32, section 
1620 I, subsection 1; and 
( 4) Permanent life insurance, other than variable life insurance and annuities, from 
an insurer authorized to transact insurance in this State, subject to the provisions 
of Title 24-A, chapter 27. A payee or mo1iuary trustee may not receive any 
commission, fee or other consideration from an insurer in connection with the 
procurement or purchase of insurance permitted by this subparagraph, 
Except for fees allowed by this section, all investments made with trust assets remain 
trust assets, 
C, Within 30 days after the deposit of funds by the payee, the financial institutiori 9r 
credit union shall provide a written confomation of the deposit, including the amouf\t 
deposited, to the payor or the payor's legal representative. Nothing in this This section 
may not be constrned to prevent the direct transfer of these funds to another financial 
institution or credit union by payee transfer, by financial institution or credit union 
merger or consolidation or by operation of law, prnvided that as long as wi.thin 30 days 
after the direct transfer of the funds, the recipient financial institution or credit union 
shall prnvide provides a written confirmation of the deposit, including the amount 
deposited, to the payor or the payor's legal representative, 
D. The agreement must be in writing and a copy must be furnished to the payor or the 
payor's legal representative by the payee when· the agreement is executed, 
The 
agreement may be revocable or irrevocable; however, if irrevocable, there must be a 
provision to allow for the transfer of the account by the appointment of successor 
trustees, The agreement must clearly state the name of the initial financial institution 
or credit union into which the money will be deposited and must direct the payor to 
send a copy of the agreement to the named financial institution or credit union. The 
agreement must clearly state terms providing for disposition of excess funds after 
fu11eral goods and services have been provided. The agreement must clearly state any 
fees that may be charged against the account; fees must be reasonable, as defined by 
the board, and may be charged only: 
(1) Upon transfer of the account by the appointment of a successor trustee; 
(2) Upon revocation of the agreement if the agreement is revoGable; and 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT ''A:.: to H.P. 553, L.D. 867 
(3) Forthe actual financial and tax administration of the account. 
The payee shall maintain a complete record of the deposit of all funds, including 
principal and interest. The record must be available for inspection by the payor, the 
payor's legal representative, the commissioner's designee or an inspector for the board 
and must contain the name and address of the financial institution or credit union 
currently in possession of the funds and the dates and amounts of deposits. 
E, The funds may be directed by the payee to another financial institution or credit 
union or directed back to the payor or the payor's legal representative, if otherwise 
lawful and permitted by contract, on written instructions of the payor or the payor's 
legal representativ~. The funds may only be withdrawn b·y the payee on presentation 
of a ce1tified copy of the death ce1tificate of the person for whose benefit the funds 
were paid, in which event they must be used in accordance with the agreement. • 
Sec. 4. 32 MRSA §1401, sub-§1-A, as enacted by PL 2003, c, 109, §3, is amended 
to read: 
1-A. Pl~n funded with mortuary trust agreement and proceeds of life 'insurance 
policy. A p,~earranged funeral or burial plan agreement inay be funded with a mo1tuary 
trust agreement that receives tlie proceeds of a life insurance policy in accordance with this 
subsection. 
A. During a person's lifetime, a person or that person's legal representative may enter 
into an agreement that services will be performed or personal prope1ty will be delivered 
in connection with the disposition of that person's body after death by: 
(1) Assigning the mo1tuary trustee as owner and beneficiary of a life insurance 
policy payable to the mo1tuary trustee upon that person's death; or 
• (2) Designating the 11101tuary trustee as a beneficiary of a life insurance policy 
payable to the mo1tuary trustee upon that person's death, 
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 may be revocable or i11·evocable; 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: 
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( 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. 
C, The mo1tuary trustee shall maintain a complete record of a tri.1st account established 
under this subsection. The record must be available for inspection by the person, the 
person's legal representative, the commissioner's designee or an inspector for the board. 
This subsection may not be construed to alter the terms of a life insurance policy or 
supersede any law governing the regulation of life insurance policies. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT 'A" to H.P. 553, L.D. 867 
Sec. 5. 32 MRSA §1401, sub-§1-B is enacted to read: 
1-B. Plan funded with proceeds of pre-need life insurance policy. A prearranged 
funeral service or plan may be funded with proceeds of a pre-need insurance policy in 
accordance with this subsection, For the purposes of this section. "pre-need insurance
has 
the same meaning as in Title 24-A. section 2176-A. subsection I. 
A. During a person's lifetime. a person or that person's legal representative may enter 
into an agreement that services will be performed or personal property will be delivered 
in connection with the disposition of that person's body after death by the assignment 
of proceeds of a pre-need insurance policy to the funeral establishment upon that 
person's death. 
B, 
The face amount of a pre-need insurance policy sold in connection with a 
prearranged funeral service or plan as described in section 1402 may not exceed the 
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maximum amount of the goods and services that are contracted for in the prearranged 
funeral service or plan, 
C, 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 funeral establishment when the 
agreement is executed. The agreement must identify the parties to the agreement and 
must be signed by an authorized representative of the funeral establishment. 
The receipt of a commission for the sale of pre-need insurance. by a licensee that is also 
licensed as an insurance producer does not constitute a violation of section 1455-B, 
. subsection 5, 
This subsection may not be construed to alter the terms of an insurance policy or supersede 
any law governing the regulation of insurance policies, 
Sec. 6. 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; aflti 
D, 
Inspection of trust agreements, account information and any related 
documentation,; and 
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E, The form, format and content of agreements for prearranged funeral services or 
plans as described in section 1402 funded by pre-need insurance, 
Rules adopted pursuant to this section are routine technical rules under the Maine R~vised 
Statutes. Title 5, chapter 375, subchaptei• II-A 2-A. 
Sec. 7. 32 MRSA §1402, first ,r is amended to read: 
Ne A funeral home, funeral establishment or person holding a license under this 
chapter shalt may not as, or through, an agent or principal solicit a prearranged funeral 
COMMITTEE AMENDMENT· 
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COMMITTEE AMENDMENT"/\.' to H.P. 553, L.D. 867 
service or plan for any person or persons. "Preananged funeral service or plan" shall mean 
means any funeral service or plan wh-ielt 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 riot 
in any manner either as, or through, principals or agents solicit &l:¼eft that contract or 
agreement. This section does not prohibit the sale of insurance, in compliance with section 
1401, subsection 1-B and Title 24-A. section 2176-A, to a consumer who has contacted a 
funeral home. funeral establishment or licensee under this chapter to prearrange a funeral.' 
Amend the bill by relettering or renumbering any nonconsecutive Part letter or section 
number to read consecutively. 
SUMMARY 
This amendment replaces the bill and makes the following changes to the laws related 
to the sale of insurance in connection with prearranged funerai services or plans. 
1. It eliminates a prohibition against funeral practitioners becoming licensed to sell 
insurance. 
2. 
It requires ce1tain disclosures· about pre-need insurance used to fund funeral 
anangements. 
3. It requires that the face amount of a pre-need insurance policy may not exceed the 
maximum amount of goods and services contracted for in a prearranged funeral service or 
plan. 
4. It authorizes the payment of commissions in connection with the S\lle of pre-need 
insurance to fund funeral arrangements. 
FISCAL NOTE REQUIRED 
(See attached) 
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COMMITTEE AMENDMENT 
Fiscal Detail and Notes 
Approved: 04/07/25 LRL 
LD867 
LR 695(02) 
An Act Regarding Pre-need Funeral Insurance 
Fiscal Note for Bill as Amended by Committee Amendment 1\(H ...-210 
Committee: Health Coverage, Insurance and Financial Services 
Fiscal Note Required: Yes 
Fiscal Note 
Minor cost increase - Other Special Revenu~ Funds 
Any additional costs to the Department of Professional and Financial Regulation from the provisions of this bill are 
expected to be minor and can be absorbed within existing budgeted resources, 
LR0695(02) - Fiscal Note - Page 1 of 1