Okla. Stat. tit. 36, § 36-6125

Types of contracts – Net value of contract – Interest - Withdrawal

of funds – Disbursement statement – Bond – Administrative fee –

Acceptance of funds – Violations.

A. 1. The organization may retain from the first funds

collected, the first ten percent (10%) of the purchase price of all

contracts issued pursuant to paragraph 1 of subsection B of this

section. Thereafter, one hundred percent (100%) of all funds

collected pursuant to the provisions of contracts for prepaid

funeral benefits, except for outer enclosures as defined by the

Funeral Services Licensing Act, shall be placed in investments

authorized by Article 16 of the Insurance Code, except to the extent

the Insurance Commissioner may determine that a particular asset may

be inappropriate for investment for prepaid funeral benefits.

2. For outer enclosures at the option of the organization the

first thirty-five percent (35%) of the retail price of the outer

enclosures collected may be retained by the organization. The

remaining sixty-five percent (65%) of the retail price collected for

the outer enclosures shall be invested as otherwise provided by this

subsection pursuant to the provisions of contracts for prepaid

funeral benefits.

3. The funds required to be deposited pursuant to paragraphs 1

and 2 of this subsection shall be deposited within ten (10) days

after the collection of the funds and shall be held in a trust fund

in this state for the use, benefit, and protection of purchasers of

contracts for prepaid funeral benefits. Nothing contained within

this section shall be construed to prohibit an organization

authorized to accept prepaid funds from transferring the funds held

in trust from one trust depository to another if notice of the

transfer is given to the Insurance Commissioner within ten (10) days

before the transfer and the organization transferring the funds

remains the designated trustor. This subsection shall not affect

funds invested prior to November 1, 1988.

B. An organization authorized to accept prepaid funds shall be

authorized to provide purchasers with a choice of either of the

following types of contracts:

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1. A contract for Specific and Described Funeral Merchandise

and Service at a Guaranteed Price. The provisions of this type of

contract shall provide that interest paid by the organization upon

monies deposited in trust shall be added to the principal and that

principal and interest shall become available for disbursement to

the organization upon the death of the beneficiary and if withdrawal

of monies occurs prior to death, the net value, plus the amount

withheld pursuant to paragraph 1 of subsection A of this section,

shall be paid to the purchaser. Net value of the contract for

purposes of this section shall be determined by adding the amount of

all principal paid in pursuant to the provisions of the contract

plus all interest payable pursuant to subsection D of this section

less taxes and administrative fees;

2. A contract establishing a fund for prepaid funeral benefits.

The provisions of this type of contract shall require an initial

minimum deposit of Twenty-five Dollars ($25.00) and shall grant the

purchaser the right to add to the fund at the discretion of the

purchaser. The provisions of this contract shall provide that the

funds accumulated shall apply to the cost of the funeral services

and merchandise selected and that any funds remaining unused shall

be refunded to the purchaser or to the personal representative or

designated beneficiary of the purchaser and if withdrawal of monies

occurs prior to death, the organization may retain from the

interest, all interest incurred in excess of the minimum amount

payable pursuant to subsection D of this section less taxes and

administrative fees. This type of contract shall also bear upon it

the language: "Exact Funeral Merchandise and Services to be Selected
or

designated beneficiary of the purchaser and if withdrawal of monies

occurs prior to death, the organization may retain from the

interest, all interest incurred in excess of the minimum amount

payable pursuant to subsection D of this section less taxes and

administrative fees. This type of contract shall also bear upon it

the language: "Exact Funeral Merchandise and Services to be Selected

at Time of Death";

3. Notwithstanding the provisions of this section, at no time

shall the purchaser of a contract for Specific and Described Funeral

Merchandise and Service at a Guaranteed Price receive upon any

withdrawal or transfer a sum less than the original principal

collected; or

4. Notwithstanding the provisions of this section, at no time

shall the purchaser of a contract for Exact Funeral Merchandise and

Services to be Selected at Time of Death receive upon any full

withdrawal or transfer prior to death a sum less than the original

principal collected available at death, with the exception of those

accounts which bear principal reduced by previously made cash

withdrawals.

C. If an organization other than the organization with which

the purchaser contracted provides funeral merchandise and services

upon the death of the beneficiary of the contract, the organization

with whom the purchaser contracted shall forward, upon receipt of

request in writing from the purchaser or the personal representative

of the purchaser, the net value of the contract plus the amount

withheld pursuant to paragraph 1 of subsection A of this section to

Oklahoma Statutes - Title 36. Insurance Page 1144

the organization which provided the merchandise and services or to

the purchaser or the personal representative of the purchaser.

D. Funds deposited in trust pursuant to the provisions of

either type of contract authorized by the provisions of this section

shall earn for the account of the purchaser a rate of interest which

is not less than the minimum rate of interest offered by the

qualified investments specified in subsection A of this section to

the savings customers of the qualified investments having interest-

bearing accounts. The organization, in a nondiscriminatory manner,

may pay or accrue interest for the accounts of purchasers at any

rate greater than the minimum rate that the organization desires;

provided, however, that the organization may retain from the

interest all interest incurred in excess of the minimum amount

payable pursuant to this subsection.

E. A purchaser of either of the types of contracts authorized

by the provisions of this section may withdraw the net value of the

contract by signing a statement requesting the withdrawal. The

organization shall retain in its files a copy of the statement

requesting the withdrawal. Withdrawal of funds deposited pursuant

to the provisions of a contract authorized by the provisions of

paragraph 1 of subsection B of this section shall void the

obligation of the contracting organization to provide funeral

merchandise and services at a guaranteed price. Withdrawal forms

shall be retained on file for at least six (6) years by the

organization.

F. Following the death of a beneficiary for whom a contract has

been purchased, the organization shall prepare a statement,

acknowledged by the purchaser if the purchaser is not the

beneficiary, or by the personal representative of the purchaser if

the purchaser is the beneficiary, setting forth the use of the funds

deposited and the party to whom any unused funds were disbursed. A

copy of this statement shall remain in the files of the organization

for at least six (6) years and a copy shall be delivered to the

trust depository and the purchaser.

G. After thirty (30) days, a contract of either type authorized

by the provisions of this section may become irrevocable and not

subject to withdrawal prior to the death of the beneficiary if the
nused funds were disbursed. A

copy of this statement shall remain in the files of the organization

for at least six (6) years and a copy shall be delivered to the

trust depository and the purchaser.

G. After thirty (30) days, a contract of either type authorized

by the provisions of this section may become irrevocable and not

subject to withdrawal prior to the death of the beneficiary if the

purchaser signs an election making the contract irrevocable. This

election shall not become effective until thirty (30) days after

signing the original contract.

H. In no event shall more funds be withdrawn or paid pursuant

to the provisions of one contract than were deposited with the

organization and which were accumulated as interest. All funds

deposited pursuant to the provisions of a contract authorized by the

provisions of this section and deposited pursuant to the terms of

this section and the interest earned on the funds shall be exempt

from attachment, garnishment, execution, and the claims of

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creditors, receivers, or trustees in bankruptcy, until the time the

funds have been withdrawn from the trust account and paid to the

organization or refunded to the purchaser.

I. Each organization subject to the provisions of this section

shall furnish a bond in the form of a cash bond, letter of credit,

or fidelity bond, to be approved by the Insurance Commissioner, in

the amount of Three Hundred Thousand Dollars ($300,000.00) or

fifteen percent (15%) of all funds collected for prepaid funeral

benefits, whichever is less.

J. Organizations contracting with purchasers for prepaid

funeral benefits pursuant to paragraphs 1 and 2 of subsection B of

this section shall be entitled to deduct from the principal and

interest allocable to the contracts an administrative fee which

shall not exceed the product of .001146 times the total contract

fund including accrued interest per month or any major portion

thereof.

K. No organization holding a permit issued pursuant to the

provisions of Sections 6121 and 6124 of this title shall accept any

funds except pursuant to the provisions of a contract for prepaid

funeral or burial benefits authorized by the provisions of Sections

6121 through 6136.18 of this title, and no organization shall accept

funds from a purchaser in excess of the contracted price of prepaid

funeral or burial benefits purchased.

L. Any organization which knowingly commits any of the acts set

forth in the first sentence of Section 6121 of this title without

first having obtained a permit to engage in the stated activity from

the Insurance Commissioner, or any organization which commits the

acts while knowingly operating with an invalid or expired permit,

upon conviction, shall be guilty of a misdemeanor. Each separate

act performed without a valid permit shall be deemed a separate

offense. The punishment upon conviction for the offense shall be a

fine not to exceed One Thousand Dollars ($1,000.00) or imprisonment

in the county jail for not less than sixty (60) days nor more than

one (1) year, or both such fine and imprisonment.