House of Representatives

SB 1289

Prearranged funeral trusts; accounts; audits

(now: prearranged funeral trust accounts; audits)

Sponsors: Cirillo: Nichols

X	Committee on Commerce and Economic Development
	Caucus and COW
	As Passed the House

SB 1289 requires any licensed funeral establishment that offers prearranged funeral trust accounts to provide the State Banking Department [Department] with an annual financial audit performed by a certified public accountant.

History

Current law requires the State Banking Department to randomly examine prearranged funeral trust accounts for certain specific information as follows:

1. The names/addresses of those who purchased prearranged trust accounts and the dollar amount paid.

2. The location/status of monies received and the total amount of monies in the trust accounts.

3. Whether the funeral business is complying with applicable laws and administrative rules.

These examinations must take place at least once within the first year of sales, then at least every three years thereafter. Additionally, the Department may conduct examinations as appropriate during an investigation prompted by the Board of Funeral Directors and Embalmers [Board]. If the Department determines there has been a violation of law, they must send a written report to the Board within 30 days of the completed investigation. The Department is authorized by statute to assess each business up to $520 per day for each examiner working on the case.

SB 1289 requires these businesses that sell prearranged trusts to provide the Department with an annual audited financial statement that is conducted by a certified public accountant. The bill outlines the content of the audit and stipulates the actions that may be submitted by the Department.

Provisions

SB 1289 mandates an annual CPA financial audit of funeral establishments [within 120 days of their fiscal-year end] offering prearranged funeral trusts to consumers. The audited financial statement must include the following:

1. The CPA's opinion regarding compliance with generally accepted accounting principles. This opinion shall become part of the examination report.

2. An examination of the internal control structure over the financial reporting and accounting of the prearranged funeral trust business.

3. Any reportable conditions of the internal control structure. Reportable conditions means significant deficiencies in the business design or operation that would adversely affect its ability to perform its activities and carry out its fiduciary duties consistent with the lawful operation of the prearranged funeral trust business.

SB 1289 requires the business to pay the cost of the audit. In addition, the bill charges the State Banking Department with recommending to the Funeral Board, specific corrective measures or enforcement actions in order to remedy the deficiencies or violations outlined in the examination.

---------- DOCUMENT FOOTER ---------

45th Legislature

First Regular Session 2 March 27, 2001

---------- DOCUMENT FOOTER ---------