Alabama Administrative Code › Title 395 - ALABAMA BOARD OF FUNERAL SERVICE › Chapter 395-X-10 - PRENEED EXAMINATIONS › Section 395-X-10-.02 - Examination Penalties

Current through Register Vol. 42, No. 9, June 28, 2024
(1) Any
			 violation under this section is a violation of minimum standards and a threat
			 to the health, safety, and welfare of the public. A Certificate of Authority
			 holder licensed by the board shall pay a fine to the board for each violation
			 found during an examination. If the examiner or a representative of the board
			 finds a violation during an exam, he or she may immediately issue a citation
			 listing each violation and fine for each violation or submit the matter to the
			 board in accordance with the administrative procedures act. After a citation,
			 has been issued, the Certificate of Authority holder shall either pay the
			 amount of the fine to the board or submit a written request for an
			 administrative hearing before the board. A request for an administrative
			 hearing before the board shall be received by the board not later than 30
			 calendar days after the day the citation is issued. Failure to either pay the
			 fine or timely request an administrative hearing before the board shall cause
			 additional disciplinary action to be taken against the licensee. The
			 requirements for examination and the citation fines per violation(s) for
			 violations under this section are as follows:
Minimum Standards
Fine for Violating
1. Documentation
a. Failure to provide any required
							 documentation.
$200.00
b. Evidence of any discrepancies in or between the
							 company's documents, reports, etc.
$200.00
2. Certificates and Licenses
a. Failure to maintain current and active certificate
							 of authority.
$1,000.00 per day
b. Failure to register Preneed Sales
							 Agent.
$1,000.00 per day
c. Failure to notify the board of a cancellation of a
							 registration of a Preneed Sales Agent.
$200.00
d. Failure to publicly display the certificate of
							 authority or preneed sales agent license in the establishment.
$500.00
e. Failure of the certificate of authority to address
							 the violations and make the necessary corrections from the last
							 examination.
$200.00 per day
3. Preneed Contracts
a. Failure to provide examiner access to all preneed
							 and at-need contract files.
$500.00
b. Evidence of any obvious issues or discrepancies
							 between the contract files sample and the company's records. (e.g. preneed log,
							 funds collected, etc.)
$200.00
c. Use of any contract forms not approved by the
							 board.
$200.00
d. Adding at-need fees to preneed
							 contracts.
Double the charge amount up to $10,000.00
e. Increasing the cost of merchandise (unless an
							 upgrade was made at the time of need).
Double the charge amount up to $10,000.00
4. Preneed Log
a. Failure to format and complete preneed log in
							 compliance with applicable statutes or regulations.
$500.00
5. Transferred Contracts
a. Failure to document transferred contracts on the
							 preneed log.
$200.00
b. Failure to properly account for transferred
							 contracts.
$200.00
c. Failure to trust the funds affiliated with
							 transferred contracts in a timely manner.
$200.00
d. Failure to report transferred contracts on the
							 required filings to the board.
$200.00
6. Trust
a. Failure to use a current approved trust to fund
							 preneed.
$1,000.00
b. Failure to fund contracts using the trust option
							 in a manner that aligns with the relevant requirements in effect at the time of
							 the contract, both appropriately and in a timely fashion.
$500.00
c. Failure to appropriately disclose if trust
							 originated life insurance is involved.
$200.00
d. Failure to trust sufficient amounts for each
							 contract.
$1,000.00 per formula category
e. Failure to maintain fair market value reports
							 provided by the trustee.
$200.00
f. Failure to submit the required certification to
							 the trustee in support of any withdrawal pursuant to a
							 cancellation.
$200.00
g. Failure to support withdrawals due to fulfillment
							 by a certification from the seller, affirming that all obligations under the
							 contact have been fulfilled.
$200.00
7. General Price List
a. Failure to maintain publicly available
							 establishment pricing that complies with the rules established by the Federal
							 Trade Commission.
$500.00
8. Merchandise
a. Failure to provide evidence of delivery or
							 installation of merchandise.
$200.00
b. Storing merchandise not suitable for prolonged
							 storage or using a method of storage that does not protect the merchandise from
							 deterioration.
$200.00
c. Using a third-party for storage of merchandise who
							 is not bonded and insured.
$200.00
d. Failure to maintain receipts or records from the
							 third-party storing the merchandise that indicate the item being stored, the
							 specific preneed contract for which the merchandise is being stored, the or the
							 precise location of the merchandise being stored, or doesn't indicate the
							 identity and address of the bonding or insuring parties.
$200.00
e. Storing caskets or alternative
							 containers.
$500.00 per casket or alternative
							 container
9. Cemetery
a. Failure to maintain a log of burial space, niche,
							 and crypt sales.
$500.00
b. Failure to maintain a plat map for each cemetery
							 location.
$500.00
c. Failure to maintain a book or file that reflects
							 by date, the location by lot and space number of each person entombed or
							 interred in the cemetery.
$200.00
d. Failure to maintain a publicly available written
							 copy of cemetery rules and regulations.
$200.00
e. Failure to entrust the appropriate amount to the
							 endowment care fund in a manner that aligns with the relevant requirements in
							 effect at the time of the contract, both appropriately and in a timely
							 fashion.
$500.00
(2) If
			 the board finds a Certificate of Authority holder guilty of any violation of
			 Chapter 13, Title 34,
Code of Ala. 1975
or Chapter 395
			 of the administrative code, including but not limited to, any violation of
			 subsection (a) and the infractions therein, the board may refuse to grant,
			 refuse to renew, or suspend or revoke a license, after proper hearing and
			 notice to the licensee, upon the licensee being found guilty of any violation
			 of this chapter. The board may levy and collect administrative fines for any
			 violation of this chapter, or the rules or regulations of the board, in an
			 amount not to exceed one thousand dollars ($1,000) for each no willful
			 violation and in an amount not to exceed ten thousand dollars ($10,000) for
			 each willful violation. Repeat violators will be subject to further
			 disciplinary action by the Board in accordance with the
Code of
			 Ala. 1975
, Title 34 Chapter 13.
Author:
Charles M. Perine
Statutory Authority:
Code of Ala.
				  1975
, §§
										34-13-26,
				  34-13-27,
				  34-13-56,
				  34-13-202.