Alabama Administrative Code › Title 482 - ALABAMA DEPARTMENT OF INSURANCE › Chapter 482-3-003 - PRENEED CONTRACTS AND CERTIFICATES OF AUTHORITY › Section 482-3-003-.08 - Installation Of Vaults Or Outer Burial Containers Before Need

Current through Register Vol. 42, No. 9, June 28, 2024
(1) The sale of a
			 vault or outer burial container on a preneed basis is a preneed contract even
			 if the contract provides for installation of the vault or outer burial
			 container before need.
(2) On or
			 after January 1, 2015, where a provider's practice is to install vaults or
			 outer burial containers before need, the preneed contract must grant to the
			 preneed contract purchaser the sole option to have a contracted-for vault or
			 outer burial container installed before need or at need and must otherwise
			 conform to the requirements in this Rule.
(3) The preneed contract must contain a
			 conspicuously-displayed provision, to be signed by the purchaser separate from
			 signing the contract as a whole, in the following or substantially similar
			 terms:
It is the Seller's practice to install a vault prior to need
				unless the Purchaser elects to have the vault installed at the time of
				need.
_________________ I elect to have my vault installed prior to
				need.
_________________ I elect not to have my vault installed prior
				to need.
(4) The preneed
			 contract must clearly distinguish between service fees to install the
			 vault/outer burial container before need and fees for re-opening the previously
			 installed vault/outer burial container, placing the casket, and closing and
			 covering the vault/outer burial container at need. The disclosed fee for
			 installing a vault/outer burial container before need must be described in the
			 preneed contract using the term "vault installation fee," "burial (or grave)
			 space excavation fee," or other words reasonable descriptive of the nature of
			 the services being performed. The fee may not be described by use of the word,
			 "interment."
(5) The amount of the
			 disclosed fee to install a vault/outer burial container before need shall not
			 exceed fifty percent (50%) of the total amount (expressed in dollars) of that
			 fee and the disclosed fee charged for opening the installed vault/outer burial
			 container, placing the casket, and closing and covering the vault/outer burial
			 container at need. This allowed allocation notwithstanding, the Department may
			 require a provider to increase the amounts trusted for opening/closing services
			 at interment in the event (i) a provider ceases performing the service using
			 its own employees and equipment in favor of contracting with third parties to
			 perform the service, or (ii) as a condition for the Commissioner's approval of
			 an application by the provider to transfer or to surrender of a certificate of
			 authority or branch registration, or (iii) if the provider's financial
			 condition warrants an increase in the trust amount.
(6) The preneed contract shall specify a time
			 period within which the vault/outer burial container will be installed before
			 need (if so elected by the purchaser).
(7) The preneed contract shall provide that,
			 in the case a purchaser elects preneed vault/outer burial container
			 installation, the preneed provider bears any risk of damage to the vault/outer
			 burial container when installed and will provide and install a new vault/outer
			 burial container of comparable quality at no cost to the preneed contract
			 purchaser or beneficiary if required by the circumstances at the time of
			 interment.
(8) No other preneed
			 contract provisions can conflict with, qualify, defeat, or diminish the
			 contractual option granted to the preneed contract
			 purchaser/beneficiary.
(9) At the
			 time the preneed contract is negotiated, the preneed seller must furnish the
			 contract purchaser a disclosure substantially in the form of the model
			 disclosure developed by the Department and published on the Department's
			 website. The actual form of the disclosure must have been submitted to and
			 approved by the Department before use. The original disclosure signed by the
			 preneed contract purchaser(s) and the responsible preneed sales agent must be
			 retained by the preneed provider as part of the preneed contract file. The
			 preneed contract purchaser(s) must be furnished a copy of the signed disclosure
			 at the time the preneed contract is finalized.
(10) Any preneed provider offering
			 installation of a vault/outer burial container before need must implement a
			 program to instruct its preneed sales agents about properly explaining
			 installation of vaults/outer burial containers before need and answering
			 purchaser inquiries about installation before or at need. The program must
			 include reasonable measures for monitoring preneed sales agents' actual
			 explanation methods to purchaser. The program must be maintained in a form that
			 can be produced to the Department for review upon request.
(11) The vault/outer burial container must be
			 installed within thirty (30) days prior to the time the first trust deposit is
			 required to be made under the contract in accordance with state law. If the
			 contract is funded by another method, the vault/outer burial container must be
			 installed within thirty (30) days from the date of the preneed
			 contract.
(12) Any preneed provider
			 offering installation of a vault/outer burial container before need must
			 maintain records sufficient to permit the Department's examiners to verify that
			 vaults/outer burial containers contracted for installation before need have
			 been installed.
Author:
Commissioner of Insurance
Statutory Authority:
Code of Ala.
				  1975
, §§
										27-2-17,
				  27-17A-1 to -57 (2014).