§441-41 Investment of perpetual care funds and pre-need trusts. (a) The investment of perpetual care funds and pre-need trusts by a bank or trust company appointed as trustee shall be governed by the standards prescribed in article 8 of chapter 412.
(b) The investment of perpetual care funds and pre-need trusts by a board of trustees shall be governed by the following standards:
(1) Funds may be invested in either:
(A) An institution listed with the New York Stock Exchange, that is a member of the Securities Investor Protection Corporation (SIPC), and provides additional insurance coverage of $1,000,000 per account above and beyond the minimum cash and securities protected by the Securities Investor Protection Corporation; or
(B) An institution whose deposits are federally insured.
(2) Funds invested with an institution as provided in section 441-41(b)(1) shall be insured on a cash basis by the institution for the full amount of those funds. If the institution insures a portion of the fund, the perpetual care and pre-need funeral authority shall acquire additional insurance in the amount equal to or in excess of the funds held by the institution. The insurance shall be in full force and effect and shall not lapse or be reduced below the full amount of the funds. The perpetual care and pre-need funeral authority shall immediately notify the director when the insurance is not in conformity with the requirements stated herein. Failure, refusal, or neglect of a licensed cemetery and pre-need funeral authority to maintain in full force and effect the insurance as required by this section shall cause the automatic suspension of the license effective as of the date of expiration or cancellation of the insurance. The authority's license shall not be reinstated until evidence of insurance as required in this section is received by the director. The director may assess a fee on the licensee not to exceed $500 as a condition for the reinstatement of a suspended license, pursuant to this section. Failure to effect a reinstatement of a suspended license within sixty days of the expiration of the requirement of licensing shall cause it to be terminated, thereby forfeiting all license and biennial renewal fees. A licensee may, within fifteen days after receipt of the notification of the license termination, request an administrative hearing pursuant to chapter 91.
(3) Investment by the board of trustees in an institution described in section 441-41(b)(1)(A) shall be limited to stocks which are either listed on a national securities exchange or traded over-the-counter on the national market of the National Association of Securities Dealers, Inc., Automated Quotation System. Only the board of trustees shall have the authority to make investment decisions. No securities salesperson shall be granted or allowed to have discretionary authority over the account.
(4) Investment of moneys designated for perpetual care and pre-need services shall be held intact. [L 1967, c 199, pt of §1; HRS §441-41; am L 1982, c 66, §8; am L 1985, c 101, §21; am L 1993, c 350, §22]
Section: Previous 441-34 441-35 441-36 441-37 441-38 441-39 441-40 441-41 441-42 441-43 441-44 441-45 441-46 NextLast modified: October 27, 2016