GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1989

S	1 

SENATE BILL 855

Short Title:  Life Insurance Sales Amendments.	(Public)
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Sponsors: Senator Barker.
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Referred to:  Judiciary III.
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April 12, 1989

A BILL TO BE ENTITLED
AN ACT TO AMEND THE LAW RELATING TO DISCLOSURE OF LIFE INSURANCE POLICIES.
The General Assembly of North Carolina enacts:
Section 1.  Article 22A of Chapter 58 of the General Statutes is amended by adding the following new section to read:
"§ 58-213.13.  Disclosure of prearrangement insurance policy provisions.
(a)	As used in this section:
(1)	‘Prearrangement' means an agreement by or for an individual before that individual's death relating to the purchase or provision of specific funeral or cemetery merchandise or services; but does not mean the furnishing of a cemetery lot, crypt, niche, mausoleum, grave marker, or monument.
(2)	‘Prearrangement insurance policy' means a life insurance policy, annuity policy, or other insurance policy, issued by a licensed insurance company which policy, whether by assignment or otherwise, has for a purpose the funding of a prearrangement, where the insured is the person for whose service the policy proceeds are to be paid.
(b)	The following information shall be adequately disclosed by the insurance agent at the time an application is made, prior to accepting the applicant's initial premium or deposit, for a prearrangement:
(1)	The fact that a prearrangement insurance policy is involved or being used to fund a prearrangement;
(2)	The nature of the relationship among the insurance agent or agents, the provider of the funeral or cemetery merchandise or services, the administrator, and any other person;
(3)	The relationship of the prearrangement insurance policy to the funding of the prearrangement and the nature and existence of any guarantees relating to the prearrangement;
(4)	The effect on the prearrangement of (i) any changes in the prearrangement insurance policy, including but not limited to, changes in the assignment, beneficiary designation, or use of the policy proceeds; (ii) any penalties to be incurred by the insured as a result of failure to make premium payments; and (iii) any penalties to be incurred or monies to be received as a result of cancellation or surrender of the prearrangement insurance policy;
(5)	A list of the merchandise and services that are applied or contracted for in the prearrangement; and all relevant information concerning the price of the merchandise and services, including an indication that the purchase price is either guaranteed at the time of purchase or to be determined at the time of need;
(6)	All relevant information concerning what occurs and whether any entitlements or obligations arise if there is a difference between the policy proceeds and the amount actually needed to fund the prearrangement; and
(7)	Any penalties or restrictions, including geographic restrictions or the inability of the provider to perform, on the delivery of merchandise, services, or the prearrangement guarantee."
Sec. 2.  This act shall become effective July 1, 1989.