(1) Upon receiving anything of value under a prearrangement sales contract or preconstruction sales contract, the certified provider who sold the contract shall deposit the following amounts into one or more trust funds maintained pursuant to ORS 97.923 to 97.949, 97.992, 97.994 and 692.180:
(a) Ninety percent of the amount received in payment of a guaranteed prearrangement sales contract or guaranteed preconstruction sales contract. The remaining 10 percent shall be paid to the provider who sold the contract; or
(b) One hundred percent of the amount received in payment of a nonguaranteed prearrangement sales contract or nonguaranteed preconstruction sales contract.
(2) All trust deposits required by ORS 97.923 to 97.949, 97.992, 97.994 and 692.180 shall be placed in a depository or delivered to a master trustee within five business days of their receipt.
(3)(a) The trust deposits of a provider that does not use the services of a master trustee shall be maintained in a depository, except that the provider may invest the trust funds in a manner that is, in the opinion of the provider, reasonable and prudent under the circumstances.
(b) A provider that invests trust funds may invest the funds only in:
(A) Certificates of deposit;
(B) U.S. Treasuries;
(C) Issues of U.S. government agencies;
(D) Guaranteed investment contracts; or
(E) Banker’s acceptances or corporate bonds rated A or better by Standard & Poor’s Corporation or Moody’s Investors Service.
(c) All investments made under paragraph (b) of this subsection shall be placed in the custody of the depository in which the trust funds were originally deposited or any other depository that may qualify under ORS 97.923 to 97.949.
(d) Prearrangement sales contract trust fund and preconstruction sales contract trust fund accounts shall be in the name of the provider who sold the contract under ORS 97.923 to 97.949, 97.992, 97.994 and 692.180.
(4) Funds deposited in the trust fund account shall be identified in the records of the provider by the name of the purchaser and beneficiary and adequate records shall be maintained to allocate all earnings to each prearrangement sales contract or preconstruction sales contract. Nothing shall prevent the provider from commingling the deposits in any such trust fund account for purposes of managing and investing the funds. A common trust fund account shall be identified by the name of the provider.
(5) When a prearrangement sales contract or preconstruction sales contract includes rights of interment and funeral or cemetery merchandise or services, the application of payments received under the contract shall be clearly provided in the contract.
(6) Any person engaging in prearrangement sales or preconstruction sales who enters into a combination sale which involves the sale of items subject to trust and any item not subject to trust shall be prohibited from increasing the sales price of those items not subject to trust with the purpose of allocating a lesser sales price to items which require a trust deposit.
(7)(a) A provider may appoint a successor provider. The depository shall release the trust funds deposited under ORS 97.923 to 97.949, 97.992, 97.994 and 692.180 and accrued income only to the successor provider as described in ORS 97.943 and 97.944 or upon presentation of the written request of the purchaser.
(b) If appointing a successor provider under this subsection, the original provider shall notify the Director of the Department of Consumer and Business Services of the proposed change at least 30 days prior to the appointment.
(8)(a) A provider may appoint a successor depository or a master trustee as defined in ORS 97.923.
(b) If appointing a successor depository or master trustee under this subsection, the provider, the successor depository and the master trustee must notify the director of the proposed change at least 30 days prior to the appointment.
(9)(a) The director may appoint a successor certified provider upon a determination that:
(A) The original certified provider has ceased to provide the services and merchandise that the original certified provider agreed to provide;
(B) The certificate issued to the original certified provider has been revoked or surrendered; and
(C) The appointment of a successor certified provider is appropriate in order to protect the interests of the purchasers and beneficiaries of prearrangement sales contracts or preconstruction sales contracts.
(b) Depositories or master trustees holding deposits of trust funds by the original certified provider shall change their records to reflect the appointment of a successor certified provider upon receipt of written notice of the appointment from the director.
(10) The trust fund accounts shall be a single purpose fund. In the event of the provider’s bankruptcy, the funds and accrued income shall not be available to any creditor as assets of the provider, but shall be distributed to the purchasers or managed for their benefit by the trustee in bankruptcy, receiver or assignee.
(11)(a) If the original provider is licensed under ORS chapter 692 and voluntarily surrenders the license to the State Mortuary and Cemetery Board, the original provider shall transfer responsibility as provider under this section to a successor provider who holds a certificate issued by the director under ORS 97.933.
(b) If the original provider is not licensed under ORS chapter 692, upon presentation of proof of the death, dissolution, insolvency or merger with another provider of the original provider, the depository shall release the prearrangement trust fund deposits or preconstruction trust fund deposits to the purchaser.
(c) If the original provider is licensed under ORS chapter 692, upon proof of the death, insolvency or involuntary surrender of the license of the original provider, the depository shall release the prearrangement trust fund deposits or preconstruction trust fund deposits to the purchaser.
(12) The purchaser or beneficiary of a prearrangement sales contract or preconstruction sales contract may be named cotrustee with the provider with the written consent of the purchaser or beneficiary.
(13) A provider who has not appointed a master trustee shall have an annual audit of all trust account funds performed by an independent certified public accountant in accordance with generally accepted accounting procedures. The provider shall make the audit results available to the director if requested.
(14) As used in this section, “common trust fund account” means trust funds received by a provider from two or more purchasers. [Formerly 128.423; 2007 c.661 §19]
Note: See note under 97.923.Section: Previous 97.930 97.931 97.933 97.935 97.936 97.937 97.939 97.941 97.942 97.943 97.944 97.945 97.946 97.947 97.948 Next
Last modified: August 7, 2008