An Act Regarding Pre-need Funeral Insurance
Maine Legislature, Session 132, LD 0867
Committee: Health Coverage, Insurance and Financial Services
Sponsors: MORRIS, BALDACCI
Amends: 24-A MRSA §711, 24-A MRSA §1420-F, 24-A MRSA §2176, 24-A MRSA §2176-A, 32 MRSA §1401, 32 MRSA §1402

Legislative Document
No. 867
H.P. 553
House of Representatives, March 4, 2025
An Act Regarding Pre-need Funeral Insurance
Reference to the Committee on Health Coverage, Insurance and Financial Services 
suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative MORRIS of Turner.
Cosponsored by Senator BALDACCI of Penobscot and
Representatives: FLYNN of Albion, MASTRACCIO of Sanford, Senator: HAGGAN of 
Penobscot.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  24-A MRSA §711 is enacted to read:
§711.  "Pre-need insurance" defined
For the purposes of this Title, "pre-need insurance" means any life insurance policy or 
certificate that is issued with an assignment of the proceeds of the policy or certificate as 
consideration for a prearranged funeral service or plan as described in Title 32, section 
1402 to be provided at the time of and following the death of the insured. Goods and 
services contracted for in a prearranged funeral service or plan may include, but are not 
limited to, embalming, cremation, body preparation, viewing, visitation, coffin, urn, 
memorial stone and transportation of the deceased. The status of the policy or certificate as 
pre-need insurance is determined at the time the pre-need insurance policy or certificate is 
signed and the policy is assigned.
Sec. 2.  24-A MRSA §1420-F, sub-§1, ¶A, as enacted by PL 2001, c. 259, §24, is 
amended to read:
A.  Life, which is insurance coverage on human lives, including benefits of endowment 
and annuities, and may include benefits in the event of death or dismemberment by 
accident and benefits for disability income;, but not limited to:
(1)  Benefits of endowment;
(2)  Annuities;
(3)  Benefits in the event of death or dismemberment by accident;
(4)  Benefits for disability income; or
(5)  Pre-need insurance, except that only a person who is licensed as a funeral 
director pursuant to Title 32, chapter 21 may be issued a license for the authority 
under this subparagraph;
Sec. 3.  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, funeral establishment, 
mortuary establishment, cemetery, cemetery corporation or association, crematorium, 
mausoleum or columbarium or any representative of any of these directors or 
establishments to the effect that the director or establishment shall will conduct the funeral, 
burial, or cremation or other disposal of the remains of any individual insured by the 
insurer.  An insurer may not retain, utilize or employ any director or establishment as a 
producer or agency of the insurer, and a director or establishment may not act as or purport 
to be an insurance producer or and engage in insurance producer activities as long as the 
director is licensed as an insurance producer with life insurance authority pursuant to 
section 1420-F, subsection 1, paragraph A, subparagraph (5).  Nothing in this section 
prevents compliance with Title 39‑A, section 216, or the use of an insurance policy, 
including, subject to the provisions of section 2420, the assignment of rights under life 
insurance contracts, to provide security for the payment for a funeral, burial or cremation 
or, subject to chapter 27, the naming of a funeral home or funeral director as beneficiary 
under a life insurance policy to provide payment for a funeral, burial or cremation.  Nothing 
in this section prohibits the use of an insurance policy as an investment by a mortuary 
trustee pursuant to Title 32, section 1401.
Sec. 4.  24-A MRSA §2176-A is enacted to read:
§2176-A.  Disclosures required for the sale of pre-need funeral insurance
At the time an application is made, and prior to accepting the applicant's initial 
premium or deposit, for a prearranged funeral service or plan as described in Title 32, 
section 1402 that is funded or to be funded by a pre-need insurance policy, a producer shall 
adequately disclose the following information:
1.  Funding prearranged funeral service or plan.  The fact that a pre-need insurance 
policy is involved or being used to fund a prearranged funeral service or plan;
2.  Applicable relationships.  The nature of the relationship among the soliciting 
producer, the provider of the funeral or cemetery merchandise or services, the administrator 
and any other person;
3.  Relationship of policy to funding; guarantees.  The relationship of the pre-need 
insurance policy to the funding of the prearranged funeral service or plan and the nature 
and existence of any guarantees relating to the prearranged funeral service or plan;
4.  Goods and services; price.  A list of the goods and services that are applied or 
contracted for in the prearranged funeral service or plan and all relevant information 
concerning the price of the funeral 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;
5.  Proceeds may not exceed contract.  The fact that the proceeds of a 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;
6.  Difference between proceeds and funding total.  All relevant information 
concerning what occurs and whether any entitlements or obligations arise if there 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;
7.  Penalties or restrictions.  Any penalties or restrictions, including, but not limited 
to, geographic restrictions or the inability of the provider to perform, on the delivery of 
merchandise or services or the prearranged funeral service or plan guarantee; and
8.  Sales commission; compensation.  Whether a sales commission or other form of 
compensation is being paid and the identity of the individual or entity to whom it is paid.
Sec. 5.  32 MRSA §1401, sub-§1, as amended by PL 2007, c. 402, Pt. J, §1, is 
further amended to read:
1.  Plan requirements.  Except as provided in subsection subsections 1‑A and 1-B, 
any a prearranged funeral or burial plan contracted or undertaken within this State must 
comply with the following.
A.  All money paid during a person's lifetime to any individual, firm, association, 
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 and 17‑A, in the name of the payee as mortuary 
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 trust account may be invested in or used to 
purchase 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 
16201, 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 mortuary 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 institution or 
credit union shall provide a written confirmation of the deposit, including the amount 
deposited, to the payor or the payor's legal representative. Nothing in this section may 
be construed 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, provided that within 30 days after the direct 
transfer of the funds, the recipient financial institution or credit union shall provide 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 
funeral 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 revocable; and
(3)  For the 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 representative.  The funds may only be withdrawn by the payee on presentation 
of a certified copy of the death certificate of the person for whose benefit the funds 
were paid, in which event they must be used in accordance with the agreement.
Sec. 6.  32 MRSA §1401, sub-§1-B is enacted to read:
1-B.  Plan funded with proceeds of pre-need insurance policy.  A prearranged 
funeral service or plan may be funded with proceeds of a pre-need 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 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 proceeds of a 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 agreement. 
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 does not constitute a 
violation of section 1455-B, subsection 5.
This subsection may not be construed to alter the terms of a pre-need insurance policy or 
supersede any law governing the regulation of life insurance policies.
For the purposes of this subsection, "pre-need insurance" has the same meaning as in Title 
24-A, section 711.
Sec. 7.  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.  The form, format and content of prearranged funeral service or plan agreements 
funded by pre-need insurance.
Rules adopted pursuant to this section are routine technical rules under the Maine Revised 
Statutes, Title 5, chapter 375, subchapter II‑A 2-A.
Sec. 8.  32 MRSA §1402, as amended by PL 1983, c. 413, §55, is repealed and the 
following enacted in its place:
§1402.  Solicitation of prearranged funerals and funeral business
1.  Solicitation generally prohibited.  Except as provided in subsection 2, a funeral 
home, funeral establishment or person holding a license under this chapter 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" as used in this section means any funeral 
service or plan that is arranged, planned or determined prior to the death of a person or 
persons for whom the funeral service is to be performed.  A funeral home, funeral 
establishment or licensee under this chapter may enter into contracts or agreements for 
prearranged funeral services or plans as long as they do not in any manner either as, or 
through, principals or agents solicit such contract or agreement. Nothing in this section 
prohibits the sale of pre-need insurance as defined in Title 24-A, section 711 and as set 
forth in section 1401, subsection 1-B to a consumer who has contacted a funeral home to 
prearrange a funeral.
2.  Permitted contact and advertising.  A funeral home, funeral establishment or 
licensee under this chapter may:
A.  Directly or indirectly contact an individual in a hospital, rest home, nursing home 
or other similar facility for the purpose of soliciting a prearranged funeral service or 
plan if that contact has been specifically requested by the individual;
B.  Contact by telephone or visit a personal residence of an individual for the purpose 
of soliciting a prearranged funeral service or plan if that contact or visit has been 
requested by the individual or a family member residing at the residence;
C.  Engage in general advertising for the purpose of soliciting a prearranged funeral 
service or plan, including the use of direct mail or other communication; and
D.  Solicit an individual who initiates discussion of a prearranged funeral service or 
plan or who responds to a general advertisement or other communication made for the 
purpose of soliciting a prearranged funeral service or plan.
3.  Commission or gratuity for securing business prohibited.  A funeral home, 
funeral establishment or licensee under this chapter 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 the 
funeral home, establishment or licensee.
4.  Violation.  Any person who violates this section is guilty of a Class E crime.
SUMMARY
This bill provides for a type of insurance for prearranged funeral services or plans.  The 
bill:
1. Defines pre-need insurance and permits its sale in the State;
2. Permits a funeral director to sell pre-need insurance to a consumer who has 
approached a funeral home to preplan a funeral as long as the funeral director is licensed 
as an insurance producer;
3. Prohibits so-called cold-calling to solicit prearranged funeral agreements; 
4. Requires that the proceeds of pre-need insurance may not exceed the goods and 
services contracted for in a prearranged funeral service or plan agreement; 
5. Requires certain disclosures to applicants with regard to the sale of pre-need 
insurance; and
6. Authorizes the payment of commissions in connection with the sale of pre-need 
insurance.