Chapter 4717-14 Preneed Funeral Contract

4717-14-01 Purpose.

There is established a recovery fund which shall be administered by the board. The purpose of the fund is to reimburse the purchasers of preneed funeral contracts who have suffered financial loss as a result of malfeasance, misfeasance, default, failure, or insolvency in connection with the sale of a preneed funeral contract by any licensee under Chapter 4717. of the Revised Code.

Effective: 1/6/2018
Five Year Review (FYR) Dates: 01/06/2022
Promulgated Under: 119.03
Statutory Authority: 4717.04
Rule Amplifies: 4717.41

4717-14-02 Scope.

This chapter shall apply to any preneed funeral contract sold by any licensee on or after September 29, 2017, except for a preneed funeral contract that is funded by the assignment of an existing life insurance policy. For purposes of these this chapter, an "existing life insurance policy" shall mean a life insurance policy that was not purchased for the purpose of funding funeral or final disposition expenses and which has been in existence for at least six months prior to its assignment to fund the preneed funeral contract.

Effective: 1/6/2018
Five Year Review (FYR) Dates: 01/06/2022
Promulgated Under: 119.03
Statutory Authority: 4717.04
Rule Amplifies: 4717.41

4717-14-03 Automated reporting and preneed payment system.

The board of embalmers and funeral directors may establish and maintain an automated reporting and payment system. The board shall use the automated reporting and payment system to monitor preneed funeral contracts sold in this state and to manage the "Preneed Recovery Fund", the presentation and processing of applications for reimbursement, subrogation or assignment of the rights of any reimbursed applicant, and other necessary actions to carry out the duties pursuant to section 4717.41 of the Revised Code.

Effective: 1/6/2018
Five Year Review (FYR) Dates: 01/06/2022
Promulgated Under: 119.03
Statutory Authority: 4717.04
Rule Amplifies: 4717.41

4717-14-04 Licensee registration requirements.

(A) If the board of embalmers and funeral directors establishes and maintains an automated reporting and payment system to carry out the duties pursuant to section 4717.41 of the Revised Code, a funeral home director actually in charge shall register an account with the automated reporting and payment system on behalf of a funeral home licensee.

(B) A new funeral home licensee shall contact the board to register an account with the automated reporting and payment system within thirty days after issuance of the license by the board.

(C) The funeral director actually in charge shall have the responsibility of registering an account with the automated reporting and payment system and submitting all reports and payments to the system.

(1) The funeral director actually in charge may delegate the act to submit reports and payments to an institutional depositor authorized by the board to submit quarterly reports to the automated reporting and payment system.

(2) The responsibility to complete the act of submission of reports and payments to the automated reporting and payment system will remain with the institutional depositor once the funeral director actually in charge delegates the responsibility. Although responsibility to complete the act of submission may be delegated, liability under Chapter 4717. of the Revised Code and agency 4717 of the Administrative Code cannot be delegated and will remain with the funeral director actually in charge.

(D) A funeral home shall send written notification to the board requesting a change of account information if the following should occur:

(1) Change in the funeral director actually in charge;

(2) Change in ownership that causes a change in the funeral director actually in charge;

(3) Change in location of the funeral home;

(4) Closure of the business.

Effective: 1/6/2018
Five Year Review (FYR) Dates: 01/06/2022
Promulgated Under: 119.03
Statutory Authority: 4717.04
Rule Amplifies: 4717.41

4717-14-05 Requirements for authorization as an institutional depositor.

(A) An entity seeking to become an institutional depositor authorized to submit reports and payment on behalf of a licensee shall submit a request form to the board. The discretion to authorize an entity rests solely with the board or its delegate.

(B) The entity seeking to become an institutional depositor must agree to accept the responsibility to submit all quarterly reports and payments on behalf of any licensee.

Effective: 1/6/2018
Five Year Review (FYR) Dates: 01/06/2022
Promulgated Under: 119.03
Statutory Authority: 4717.04
Rule Amplifies: 4717.41

4717-14-06 Institutional depositor registration requirements.

(A) An institutional depositor for the purposes of these rules is any trust, insurance company, or entity that will perform the act of submitting quarterly reports and payments to the automated reporting and payment system.

(B) An institutional depositor may submit quarterly reports and payments on behalf of a licensee.

(C) If the board of embalmers and funeral directors establishes and maintains an automated reporting and payment system to carry out the duties pursuant to section 4717.41 of the Revised Code, an institutional depositor shall register an account with the automated reporting and payment system.

(D) The institutional depositor shall only submit quarterly reports and payments to the automated reporting and payment system and shall not be responsible for the accuracy of the reports submitted, the accuracy of the information contained in the reports, or compliance with Chapter 4717-10 or 4717-14 of the Administrative Code and divisions 4717.31 to 4717.36 of the Revised Code. The institutional depositor shall notify the licensee of the responsibilities under this rule.

Effective: 1/6/2018
Five Year Review (FYR) Dates: 01/06/2022
Promulgated Under: 119.03
Statutory Authority: 4717.04
Rule Amplifies: 4717.14

4717-14-07 Information required for submission.

(A) As used in this division:

(1) "Deposit Amount" means the amount, if any, deposited by the purchaser upon the sale of the preneed funeral contract;

(2) "Recovery fee" means the amount collected during the sale of the preneed funeral contract;

(3) "Funeral home identification number" means the license number issued by the board upon receipt of the facility license;

(4) "Funding vehicle identification number" means the numerical sequence or alphabetical sequence or alphanumerical sequence automatically assigned to the funding vehicle that is generated by the automated reporting and payment system;

(5) "Funeral recipient" means the individual actually receiving the funeral, services, goods, or merchandise listed in the preneed funeral contract;

(6) "Purchaser" means the individual or entity remitting payment for the prearranged service.

(B) If the board of embalmers and funeral directors establishes and maintains an automated reporting and payment system to carry out the duties pursuant to section 4717.41 of the Revised Code, each licensee who sells a preneed funeral contract in this state shall submit to the board a report with the following information:

(1) Contract number;

(2) Contract type;

(3) Contract date;

(4) Contract amount;

(5) Deposit amount;

(6) Funeral home identification number;

(7) Funding vehicle identification umber;

(8) Funeral recipient last name;

(9) Funeral recipient first name;

(10) Purchaser last name;

(11) Purchaser first name;

(12) Purchaser address;

(13) Purchaser city;

(14) Purchaser state;

(15) Purchaser zip code;

(16) Purchaser telephone number;

(17) Any other information deemed necessary to be required by the board.

Effective: 1/6/2018
Five Year Review (FYR) Dates: 01/06/2022
Promulgated Under: 119.03
Statutory Authority: 4717.04
Rule Amplifies: 4714.41

4717-14-08 Reporting requirements.

The funeral director actually in charge or institutional depositor reporting to the automated reporting and payment system shall submit a report on a quarterly basis as follows:

(A) Calendar quarterly reporting

(1) First quarter: January first through March thirty-first

Mandatory reporting period for first quarter April first through May thirty-first

(2) Second quarter: April first through June thirtieth

Mandatory reporting period for second quarter July first through August thirtieth

(3) Third quarter: July first through September thirtieth

Mandatory reporting period for third quarter October first through November thirtieth

(4) Fourth quarter: October first through December thirty-first

Mandatory reporting period for fourth quarter January first through March first

(B) The quarterly reporting requirement for the preneed recovery fund established by the board does not replace or eliminate the annual reporting requirement as described under Chapter 4717-10 of the Administrative Code.

(C) In the event that a funeral director actually in charge or institutional depositor cannot electronically submit a report using the automated reporting and payment system, the licensee shall immediately contact the board to determine a mutually acceptable method of reporting. The licensee or institutional depositor must document in writing to the board the reasons that caused inability to submit the required information.

Effective: 1/6/2018
Five Year Review (FYR) Dates: 01/06/2022
Promulgated Under: 119.03
Statutory Authority: 4717.04
Rule Amplifies: 4717.41

4717-14-09 Fund deposits.

(A) For the quarter beginning October 1, 2017, and each quarter thereafter, the following amounts shall be paid to the fund by the funeral director actually in charge or institutional depositor:

(1) Ten dollars for each preneed funeral contract sold in the state until the balance of the fund exceeds two million dollars at the end of any fiscal year;

(2) Where the fund exceeds two million dollars at the end of a fiscal year, the amount shall be reduced to five dollars for each preneed funeral contract sold in the state until the fund balance of the fund exceeds three million dollars at the end of any fiscal year.

(B) The deposits required by this section shall be suspended when the balance of the fund exceeds three million dollars at the end of any fiscal year.

(C) Quarterly reporting and payment to the fund shall be made by the funeral director actually in charge or institutional depositor using the automated reporting and preneed payment system.

(D) The funeral director actually in charge or institutional depositor shall continue to submit quarterly reports during periods where deposits to the fund are suspended for the upcoming fiscal year.

(E) The fee authorized under section 4717.41 of the Revised Code is not direct payment prohibited under section 4717.35 and division (C) of section 4717.36 of the Revised Code and may be collected by a funeral director or funeral home.

Effective: 1/6/2018
Five Year Review (FYR) Dates: 01/06/2022
Promulgated Under: 119.03
Statutory Authority: 4717.04
Rule Amplifies: 4717.41

4717-14-10 Record keeping.

(A) Every funeral director and funeral home shall allow for inspection and retain all preneed records in accordance with rule 4717-13-01 of the Administrative Code.

(B) Every funeral director and funeral home shall store records of preneed funeral contracts in a secure location in an office or readily accessible computer located in the actual business and in a uniform manner that is readily available and can be promptly produced upon request by the board or an administrator of the fund.

(C) Every funeral director and funeral home shall keep and maintain, at a minimum, accurate accounts, books, and records.

(D) Where a preneed funeral contract is funded by an insurance policy, trust, or annuity, a funeral home or funeral director shall produce records relating to preneed funeral contracts within three working days upon request by the board.

(E) The accounts, books, and records kept by the funeral director or funeral home shall include the contents required pursuant to section 4717.32 of the Revised Code and the following:

(1) The dates and amounts of payments made and accepted;

(2) Copies of all agreements.

(F) It is the responsibility of a funeral director actually in charge to maintain compliance with this rule.

Effective: 1/6/2018
Five Year Review (FYR) Dates: 01/06/2022
Promulgated Under: 119.03
Statutory Authority: 4717.04
Rule Amplifies: 4717.41 and 4717.32

4717-14-11 Fund administrator.

(A) If the board establishes and maintains an automated reporting and payment system to carry out the duties as described under section 4717.41 of the Revised Code, the executive director of the board may do all of the following:

(1) Employ an administrator who is responsible for operating and managing the fund in accordance with the Administrative Code and section 4717.41 of the Revised Code;

(2) Fix the compensation of the administrator.

(B) The administrator of the fund shall have the following duties:

(1) Management of the monies that become available in the fund;

(2) Supervision and review of all claims for reimbursement submitted to the board;

(3) Enforcement of any claims for reimbursement made under this fund;

(4) Conduct audits of any preneed funeral contracts sold in this state and subject to reporting to the fund;

(5) Processing and payment of valid claims for reimbursement; and

(6) Any other duties necessary to carry out the administration of the fund.

Effective: 1/6/2018
Five Year Review (FYR) Dates: 01/06/2022
Promulgated Under: 119.03
Statutory Authority: 4717.04
Rule Amplifies: 4717.41

4717-14-12 Investigation of reimbursement claims.

(A) The board shall enforce, or cause to be enforced, section 4717.41 of the Revised Code or any rules adopted thereunder and take such action as it considers appropriate.

(B) A claim for reimbursement shall be submitted to the board and the board shall investigate all application claims for reimbursement.

(C) The board may inspect, copy, or retain any record relevant to the claim for reimbursement and examine the affairs of any funeral director actually in charge or funeral home whenever it is deemed appropriate to do so. The board may request additional documentation relevant to the claim for reimbursement.

Effective: 1/6/2018
Five Year Review (FYR) Dates: 01/06/2022
Promulgated Under: 119.03
Statutory Authority: 4717.04
Rule Amplifies: 4717.41

4717-14-13 Application for reimbursement.

(A) The board shall create an application form for reimbursement which shall be submitted to the board office and require the following information:

(1) The name, address, and contact information of the applicant;

(2) The name, address, and contact information of the funeral home or funeral director, or both, who caused the loss;

(3) The amount of the alleged loss for which the application for reimbursement is made;

(4) A copy of the preneed funeral contract or written agreement which was the basis of the alleged loss;

(5) If the individual seeking reimbursement is deceased, a copy of the death certificate of the funeral recipient;

(6) Relationship to the funeral recipient;

(7) If applicable, a copy of the right of disposition;

(8) A general statement of the relevant facts causing the application for reimbursement;

(9) Supporting documents, including copies of court proceedings and other papers indicating the efforts of the applicant to obtain reimbursement from the provider, insurance companies, or others, any reimbursement received from the provider, insurance companies, or other funeral home;

(10) If applicable, the name and address of the funeral home that carried out the contract and provided services or merchandise or both following the loss;

(11) If applicable, proof of payment for the new preneed funeral contract;

(12) If applicable, name of the individual or individuals who purchased or contributed to the purchase of the new preneed funeral contract;

(13) If applicable, the name and address of the funeral home where a new preneed funeral contract was purchased following the loss from the initial contract.

(B) An applicant with multiple claims shall submit an application for reimbursement for each claim and include the information required by the board.

(C) Applicants with multiple individuals contributing to payment of a preneed contract shall submit one application for reimbursement and include the name of each individual that contributed to payment for the contract.

Effective: 1/6/2018
Five Year Review (FYR) Dates: 01/06/2022
Promulgated Under: 119.03
Statutory Authority: 4717.04
Rule Amplifies: 4717.41

4717-14-14 Reimbursement.

(A) Reimbursement shall be issued for deaths occurring after September 29, 2017 on any contract or agreement that is in effect before or after this date.

(B) Reimbursements from the fund, if any, shall be determined by the board.

(C) Reimbursement shall be made to the extent that monies become available in the fund.

(D) Reimbursements will be processed in the order in which they are received and are subject to the availability of monies in the fund. The board may determine the order and manner of payment of approved applications and may reject or allow claims in whole or in part. A rejection is final and no further consideration shall be given by the board to the application or to another application based upon the same alleged facts.

(E) Reimbursement shall only be made after the applicant submits a completed application and the board verifies the claim is valid.

(F) Reimbursement may be made to the applicant who suffered the loss, the estate of the funeral recipient, the purchaser, or assigned to the funeral home or funeral director who provided services or merchandise or both following the loss. A funeral home or funeral director shall not apply or seek reimbursement from the fund.

(G) All reimbursements of losses from the fund shall be a matter of privilege in the sole discretion of the board and not a matter of right.

Effective: 1/6/2018
Five Year Review (FYR) Dates: 01/06/2022
Promulgated Under: 119.03
Statutory Authority: 4717.04
Rule Amplifies: 4717.41

4717-14-15 Subrogation.

(A) In the event reimbursement is made to an applicant under this section, the board shall be subrogated in the reimbursed amount and may bring any action the board deems appropriate for the recovery fund, including against a licensee.

(B) In pursuing a subrogation claim as authorized under section 4717.41 of the Revised Code, the board may require the reimbursed applicant to execute a subrogation agreement, providing for, among other things, that the action may be brought in the name of the applicant. Any amounts recovered by the board in excess of the amount to which the fund is subrogated, less the board's actual costs of recovery, shall be paid to or retained by the reimbursed applicant as the case may be.

Effective: 1/6/2018
Five Year Review (FYR) Dates: 01/06/2022
Promulgated Under: 119.03
Statutory Authority: 4717.04
Rule Amplifies: 4717.41

4717-14-16 Requests and release of records.

(A) The board may provide information from the automated reporting and payment system in accordance with the following:

(1) Upon receipt of a request from a funeral recipient of a preneed funeral contract seeking information on the funeral recipient's own contract or the purchaser of a preneed funeral contract seeking information on the preneed funeral contract purchased;

(2) Upon receipt of a request from a funeral director actually in charge or funeral home seeking its own information;

(3) Pursuant to a subpoena issued by a grand jury, the board shall provide to the grand jury information from the automated reporting and payment system relating to the person who is the subject of an investigation;

(4) Pursuant to a subpoena, search warrant, or court order in connection with the investigation or prosecution of a possible or alleged criminal offense, the board shall provide information from the automated reporting and payment system as necessary to comply with the subpoena, search warrant, or court order.

(B) The board may provide information from the automated reporting and payment system to the following:

(1) The funeral recipient of a preneed funeral contract or purchaser of a contract requesting the information;

(2) The funeral director actually in charge who is employed by the funeral home requesting the information;

(3) Upon notice of the death or impending death of the funeral recipient to a government official, hospital, nursing facilities, next of kin, appointed representative(s) with the right of disposition of the funeral recipient or a funeral services provider that is seeking to obtain preneed funeral contract information for the specific purpose to facilitate final disposition of the funeral recipient upon or following the death;

(4) A federal officer, or state or local officer of this or any other state, who is involved in an active investigation being conducted by the officer's employing government entity of the individual who submitted the request for the information.

Effective: 1/6/2018
Five Year Review (FYR) Dates: 01/06/2022
Promulgated Under: 119.03
Statutory Authority: 4717.04
Rule Amplifies: 4717.41

4717-14-17 Annual preneed recovery fund report.

The board shall prepare and submit a financial report on the activity of the fund each year after the fiscal year.

Effective: 1/6/2018
Five Year Review (FYR) Dates: 01/06/2022
Promulgated Under: 119.03
Statutory Authority: 4717.04
Rule Amplifies: 4717.41