New Certificate of Authority, Branch Registrant, and Preneed Sales Agent Licenses

CERTIFICATE OF AUTHORITY

34-13-190 (a)

No person may sell a preneed contract without first having a valid Certificate of Authority.

34-13-190 (b)

No person may receive any funds for payment on a preneed contract who does not hold a valid Certificate of Authority.

34-13-190 (c) (1)

No person may obtain a certificate of authority under this chapter for the preneed sale of funeral services or cemetery services unless the person or its agent, in the case of a corporate entity, holds a license as a funeral director or a funeral establishment, or is a cemetery authority and qualifies as an applicant for a certificate of authority pursuant to all of the following standards and qualifications:

The applicant(s) shall be at least the legal age of majority in this state.
The applicant(s) may not have any felony or misdemeanor convictions that relate to any activity regulated by this chapter or a crime involving moral turpitude, as defined by this chapter.
The applicant(s) shall be of good moral character and submit to a criminal history background check.

Additional requirements include the following:

The entity which the applicant(s) are representing meets the minimum equity requirement of $10,000.00.
The entity which the applicant(s) are representing has at least one registered Preneed Sales Agent.

Instructions for Obtaining a Certificate of Authority License

If the above minimum requirements are met, an applicant may obtain a valid Certificate of Authority by completing the application process and submitting all necessary documentation. The checklist for a new Certificate of Authority can be found here. More information about funding vehicle types can be found here. Sample contracts, agreements, and logs that may be required with the application can be found here. Instructions for applying for a Certificate of Authority license through the online portal can be found here.

FYI: THE APPLICATION CANNOT BE SUBMITTED UNTIL ALL THE REQUIRED INFORMATION HAS BEEN COLLECTED. THE BOARD CANNOT REVIEW THE APPLICATION UNTIL IT HAS BEEN SUBMITTED.

Email correspondences will be sent regarding the status of the application from the Board to the Applicant, including approval of the application and the issuance of the license. During the application process, applicants may choose to pay the application fees online or may choose to submit payment via regular mail.

Financial Statement

Administrative Code 395-X-9-.08

An applicant for a preneed certificate of authority must meet, and a certificate holder must maintain, the financial requirements set forth in this Rule demonstrating its ability to discharge its liabilities as they become due in the normal course of business, and must have sufficient funds available to perform its obligations under its existing preneed contracts.
An applicant for a preneed certificate of authority must meet, and a certificate holder must maintain, the financial requirements set forth in this Rule demonstrating its ability to discharge its liabilities as they become due in the normal course of business, and must have sufficient funds available to perform its obligations under its existing preneed contracts. Unless exempted under paragraph (8), a preneed seller must file with the Board a financial statement in order to apply for a certificate of authority or renew an existing certificate of authority. The financial statement shall, at the preneed seller’s option, be
1. a financial statement accompanied by a compilation, review or audit report from a licensed certified public accountant prepared in conformity with GAAP, or
2. a financial statement in the form furnished by the Board and published on the Board’s website using the alternate basis of accounting described in paragraph (5).
The financial statement must be for the preneed seller holding a certificate of authority or the applicant seeking a certificate of authority. Information in the financial statement must be accurate and contain all relevant notes and disclosures appropriate to the accounting basis used. The financial statement must be signed by the certificate holder or applicant and, if prepared by a certified public accountant or public accountant, by the accountant.
Financial statements prepared in conformity with GAAP that are consolidated must include supplementary consolidating schedules to provide supporting detail for each consolidated financial statement presented.
The financial statement form developed by the Board reflects a basis of accounting adopted by the Board as an alternative to GAAP reporting. This alternative basis differs from the measurements and disclosures required by GAAP in the following respects:
1. GAAP requires consolidation of certain equity investments and of variable interest entities under FIN 46(R), entitled Consolidation of Variable Interest Entities. The Board requires that only the primary reporting entity’s accounts and activities be reported. Investment in trusts are to be marked-to-market as of the financial statement date. Closely- held investments should be recorded using the equity method.
2. Deferred revenue for preneed contracts incurred prior to May 1, 2002 (the Act’s effective date), is to be equal to the current cost of providing the preneed services and merchandise.
3. A noncurrent receivable is to be recorded for the face amount of life insurance policies used to fund preneed contracts, with the offset being a credit to deferred revenue.
The financial statement of an applicant or certificate holder (in the case of annual renewals) must demonstrate the following levels of equity determined on the basis of the accounting method used in the financial statement:
1. An applicant or certificate holder with total preneed deferred revenue of $100,000 or less must have a minimum of $10,000 equity.
2. An applicant or certificate holder with total preneed deferred revenue of $100,001 or greater must have equity in an amount not less than ten percent (10%) of the total preneed deferred revenue.
On either a financial statement prepared using GAAP or the alternative form, the Board will disregard any figure included for “good will” as an intangible asset in determining whether the statutory requirements or equity requirements in Rule 395X-9-.08(6) above are met. The Board may assess other forms of intangible assets against the statutory requirements and equity requirements in Rule 395-X-9-.08(6).

Background Checks

Any application to the Board for a Certificate of Authority or Branch Registrant license to sell preneed contracts made on behalf of a sole proprietorship, firm, corporation, partnership, joint venture, or limited liability company shall be sworn to by each:

Owner, partner, member, shareholder, and/or other principal of such entity controlling a 10% or greater interest in the entity: and
Any other individual or officer as may be needed to legally bind the entity.

A background check fee of $38.25 is required for each applicant.

Branch Registrant

34-13-191 (d) (2)

Any person or entity that is part of a common business enterprise that has a Certificate of Authority issued pursuant to this chapter and elects to operate under a name other than that of the common business enterprise shall submit an application on a form prescribed by the board to become a Branch Registrant.

The following qualifications must be met to qualify as a Branch Registrant of a Certificate of Authority license:

The applicant(s) or the business entity which the Branch Registrant license is being applied must hold a funeral director or funeral establishment license, or is a cemetery authority and qualifies as an applicant for a Branch Registrant license.
The applicant(s) shall be at least the legal age of majority in this state.
The applicant(s) shall be in good standing with the board.
The applicant(s) may not have any felony or misdemeanor convictions that relate to any activity regulated by this chapter or a crime involving moral turpitude, as defined by this chapter.
The applicant(s) shall be of good moral character and submit to a criminal history background check.
The entity which the applicant(s) are representing has at least one registered Preneed Sales Agent.
The Certificate of Authority license that is applying for the Branch Registrant must meet the minimum equity requirement of
1. $10,000.00 if the total preneed deferred revenue is $100,000.00 or less; or
2. 10% of the total preneed deferred revenue if the preneed deferred revenue is $100,001 or greater.

If the above minimum requirements are met, an applicant may obtain a valid Branch Registrant license by completing the application process and submitting all necessary documentation. The checklist for a new Branch Registrant can be found here. Instructions for applying for a Branch Registrant license through the online portal can be found here.

FYI: THE APPLICATION CANNOT BE SUBMITTED UNTIL ALL THE REQUIRED INFORMATION HAS BEEN COLLECTED. THE BOARD CANNOT REVIEW THE APPLICATION UNTIL IT HAS BEEN SUBMITTED.

PRENEED SALES AGENT

34-13-199 (a)

All individuals who offer preneed contracts to the public, or who execute preneed contracts on behalf of a Certificate of Authority, shall be registered with the Board as Preneed Sales Agents, pursuant to this chapter.

34-13-199 (b)

All Preneed Sales Agents and funeral directors acting as Preneed Sales Agents shall be affiliated with the Certificate of Authority that they are representing.

34-13-199 (f)

The qualifications for a Preneed Sales Agent are as follows:

The applicant must be at least 18 years of age.
The applicant must be in good standing with the Board.
The applicant may not have any felony or misdemeanor convictions that relate to any activity regulated by this chapter or a crime involving moral turpitude, as defined by this chapter.
The applicant shall be of good moral character and submit to a criminal history background check.

Instructions for Obtaining a Preneed Sales Agent License

If the above minimum requirements are met, an applicant may obtain a valid Preneed Sales Agent license by completing the application process and submitting all necessary documentation. The checklist for a new Preneed Sales Agent application can be found here. Instructions for applying for a Preneed Sales Agent license through the online portal can be found here.

FYI: THE APPLICATION CANNOT BE SUBMITTED UNTIL ALL THE REQUIRED INFORMATION HAS BEEN COLLECTED. THE BOARD CANNOT REVIEW THE APPLICATION UNTIL IT HAS BEEN SUBMITTED.

Background Checks

A background check fee of $38.25 is required for each applicant.