REPORTING

34-13-192 (a)

Each year, the Certificate of Authority shall file a report of its preneed contract activity on a form or in a format prescribed by the Board.  The information reported shall include the total number of preneed contracts in force at the beginning of the previous calendar year, the total number of preneed contracts sold during the previous calendar year, the total number of preneed contracts fulfilled during the previous calendar year, the total number of preneed contracts in force at the end of the previous calendar year, and such other information as may be required by the Board.  The report shall be organized by type of funding, including life insurance, annuity, trust, letter of credit, or surety bond.  The report shall also provide a certification by the trustee of the amount of assets held by the trust at the beginning of the reporting period and at the end of the reporting period.  If a Certificate of Authority twice defaults in complying with the requirements of this subsection, the Board may require that the Certificate of Authority thereafter submit the report more frequently and shall continue so reporting for a time to be determined by the Board.

If a Certificate Holder becomes inactive for any reason (surrender, expiration, etc.) then the Inactive Certificate Holder – Annual Report must be filed annually, so long as the Inactive Certificate Holder has at least one unfulfilled preneed contract. If the Inactive Certificate Holder has ever funded preneed contracts by trust and has one or more trust funded contracts outstanding/unfulfilled in the reporting year, then the Inactive Certificate Holder must file a statement of trust activities for each merchandise and services trust for the reporting year (January 1st – December 31st) with the Inactive Certificate Holder – Annual Report. The report and the statement from the trustee(s) regarding all trust activities (if applicable) is due within 90 days of the end of the reporting period, January 1st – December 31st (due April 1st). If the Certificate Holder has contracts funded by insurance, then a detailed statement from the insurer showing policy activity must accompany the report.

Instructions for reporting through the online portal can be found here.

The due dates for reporting are found below.

PRENEED SALES LOG

34-13-192 (b)

The Certificate of Authority shall maintain a written log of preneed sales.  The log shall be on a form or in a format prescribed by the Board, shall detail all information required by the Board, and shall be available for examination at any time by the Board.

The specific requirements of the logs are contained in Preneed Regulation 395-X-12.  At a minimum, the logs should be updated quarterly, so that at no time is it ever more than a quarter behind.  The logs should show all transactions made since April 30, 2002.  Preneed contracts should always remain on the log, even after the contract has been fulfilled, transferred, or cancelled.  The logs must be in the form of or equivalent to the sample log.  A sample Preneed Sales Log can be found here.

Administrative Rule 395-X-12-.02 (4)

Each log must be formatted so that:

1. The company name is on each page of the log.
2. Each page of the log is sequentially numbered at the bottom.
3. The log is typed or printed legibly.
4. If the log is not being created using a computer spreadsheet, all contract items shall be completed using black or blue ink, except the columns for the current payment status, amount in trust, and cumulative amount in trust, may be written in pencil until the contract is paid in full.
5. The log can be copied and scanned.

Administrative Rule 395-X-12-.02 (5)

Use of the Board’s sample log forms published on the Board’s website will be deemed compliance with this Rule. The certificate holder may create its own form of a log as long as all information categories in Rule 395-X-12-.03 or Rule 395-X-12-.04, as applicable, appear and the log is formatted as provided in paragraph (4). The certificate holder shall perform such staff training and engage in such oversight as may be necessary to reasonably assure that the log is maintained accurately and updated.

Administrative Rule 395-X-12-.03

If the Board’s sample log form is not used, any substitute form of preneed contract log shall include the following information categories:

1. Sequentially ordered contract number
2. Name of purchaser
3. Name of beneficiary (i.e., the person for whom the contract will cover at the time of need)
4. Date of contract
5. Net amount of contract (contract price after insurance credits and all discounts)
6. Itemization of purchase price of merchandise and services collected under the contract
7. Amount to be trusted (if applicable)
8. Type of payments (paid-in-full or installments)
9. Cumulative amount trusted for merchandise and services as of the paid-in-full date
10. Face amount of insurance sold (if applicable)
11. Paid-in-full amount or cumulative installment payments
12. Partial delivery (yes/no)
13. Date delivered
14. Date of burial (at need)
15. Date contract voided or cancelled
16. Last payment date

RENEWING

All preneed-related licenses issued by the Board shall expire annually on October 01, and must be renewed no later than 30 days prior to expiration each year in order to continue to sell preneed in Alabama.  The renewal period begins July 01, each year, and remains open until September 01, each year.  If a preneed license is not renewed in that time period, the renewal becomes late and must be renewed with a late penalty between the dates of September 02, and October 01, each year.  If a preneed license is not renewed by October 01, each year, the license becomes expired and all preneed activity must cease until the proper reinstatement steps are met to reinstate the license.

CERTIFICATE OF AUTHORITY AND BRANCH REGISTRANT

When the Certificate of Authority is renewed, so long as all the qualifications are met, the Branch Registrant(s) registered under the Certificate of Authority shall so also be renewed, unless otherwise specified during the renewal period.  The following is required to renew a Certificate of Authority and/or Branch Registrant license:

1. The renewal application completed in its entirety.
2. The appropriate renewal fee.
   1. $99.00 for a Certificate of Authority license
   2. $198.00 for each Branch Registrant license
3. A list of each Branch Registrant registered under the Certificate of Authority.
4. A list of each Preneed Sales Agent registered under the Certificate of Authority and/or Branch Registrant.
5. A true and complete financial statement as of the end of the last fiscal year of the Certificate of Authority.
6. The minimum equity requirements are met.
   1. $10,000.00 for preneed deferred revenue of $100,000.00 or less.
   2. 10% of the preneed deferred revenue of $100,001 or greater.
7. A signature of any of the original applicants or current owner(s).

Instructions for renewing a Certificate of Authority or Branch Registrant license through the online services portal can be found here.

Financial Statement Waiver

Administrative Rule 395-X-9-.08 (9)

The Board may exempt a certificate holder from filing financial statements and from the equity requirements in 395X-9-.08(6) at renewal, provided that the following conditions are met:

1. The certificate holder demonstrates that 100% of the net amount of each of the certificate holder’s preneed contract(s) are funded by trust or life insurance.
2. At minimum, the certificate holder must submit the following documentation to the Board on or before July 1st of each year for the Board’s approval:
   1. A written request for an exemption from filing financial statements at renewal.
   2. An annual financial summary which must include the certificate holder’s:
      1. Total Assets
      2. Total Liabilities
      3. Equity
      4. Total Net Amount of Preneed Contracts
      5. Total Amount of Preneed Contract Funds Collected
      6. Total Funded Amount of Preneed Contract Funds
   3. A sworn written statement affirming the accuracy of the submitted information.
3. If payments are being made by the purchaser to the seller, the seller must submit 100% of the payment collected to the trust or insurance company within the required timeframe established by law to be eligible for exemption of financial statements and equity requirements.
4. An exemption will not be granted if the certificate holder has any preneed contracts, that fall under the jurisdiction of the board, that are not 100% funded by trust or insurance.
5. For the purpose of this chapter, assets, liabilities and equity shall be defined according to GAAP, except as modified in 395-X-9-.08(5).

To qualify for a financial statement waiver, the Certificate of Authority must meet the following requirements:

1. The Certificate of Authority license must not have any valid complaints filed against it since the last examination.
2. The Certificate of Authority license must not have any administrative actions instituted against it since the last examination.
3. All outstanding preneed contracts written under the Certificate of Authority since April 30, 2002, are fully funded in Accordance with The Act.
4. All preneed contracts written under the Certificate of Authority have been funded by life insurance, annuity, or the deposit of 100% of all funds collected on all preneed contracts in trust within thirty (30) days after the end of the calendar month in which the funds are collected. Trustee report(s) must be submitted along with waiver request to show proof of 100% funding.
5. All required or requested records have been provided to the department in a timely manner.

If the Certificate of Authority meets the requirements, a Financial Statement Waiver Application can be filed with the Board each year prior to renewal.  If the application is approved by the Board, the Certificate of Authority is waived from having to submit a true and complete financial statement.

PRENEED SALES AGENT

The following is required to renew a Preneed Sales Agent license:

1. The renewal application completed in its entirety.
2. The renewal fee of $33.00.
3. The name of the Certificate if Authority under which the agent is registered.
4. The name of the Branch Registrant under which the agent is registered, if applicable.
5. Signature of the agent and any of the original applicants of the Certificate of Authority or its current owner(s).

Instructions for renewing a Preneed Sales Agent license through the online services portal can be found here.

CHANGE OF OWNERSHIP

CERTIFICATE OF AUTHORITY AND BRANCH REGISTRANT

If the ownership of a Certificate of Authority or Branch Registrant license may change, a Change of Ownership application must be submitted and approved by the Board before the change of ownership can take place.  Each current representative of the Certificate of Authority as well as each new representative must sign the change of ownership application.  Before change of ownership can take place, the following requirements must be met:

1. All fees and fines due to the Board must be satisfied.
2. All required reports due up to the point of transfer must be filed with the Board.
3. Any administrative actions, including examination findings, must be addressed and/or resolved to the Board’s satisfaction.

FYI:  THE CHANGE OF OWNERSHIP FOR THE CERTIFICATE OF AUTHORITY MUST BE APPROVED BEFORE CHANGE OF OWNERSHIP CAN TAKE PLACE FOR THE FUNERAL ESTABLISHMENT.

PRENEED SALES AGENT

A Preneed Sales Agent license cannot be transferred from one person to another.

SURRENDERING

34-13-197

1. A certificate holder shall be considered inactive upon the acceptance of the surrender of its license by the board or upon the nonreceipt by the board of the certificate of authority renewal application and fees.
2. A certificate holder shall cease all preneed sales to the public upon becoming inactive. The certificate holder shall collect and deposit into trust all of the funds paid toward preneed contracts sold prior to becoming inactive.
3. Any certificate holder desiring to surrender its license to the board shall first do all of the following:
   1. File notice with the board.
   2. Submit copies of its existing trust agreements.
   3. Submit a sample copy of each type of preneed contract sold.
   4. Resolve to the satisfaction of the board all findings and violations resulting from the last examination conducted.
   5. Pay all outstanding fines and invoices due the board.
   6. Submit its current certificate of authority.
4. Upon receipt of the notice, the board shall review the certificate holder’s trust funds, trust agreements, and evidence of all outstanding preneed contracts.
5. After a review to the satisfaction of the board, the board shall terminate the certificate of authority by an order that shall set forth the conditions of termination established by the board to ensure that the preneed funds will be available for their intended purpose.
6. The trust fund of the certificate holder shall be held intact and in trust after the certificate holder has become inactive, and the funds in that trust shall be disbursed in accordance with the requirements of the written contracts until the funds have been exhausted.
7. The board shall continue to have jurisdiction over the inactive certificate holder as if the certificate were active and to require the reports and inspect the records as the board deems appropriate so long as there are funds in trust or preneed contracts that are not fulfilled.
8. Other terms of revocation or suspension ordered pursuant to this chapter may apply.

DUE DATES

ANNUAL REPORTING

Unless otherwise specified to the Certificate of Authority by the Board, a report of preneed activity is required to be submitted by the Certificate of Authority on an annual basis.

OTHER REPORTING

If a Certificate of Authority twice defaults in submitting their annual report, the Board may require a Certificate of Authority to report preneed activity more frequently.  The Board may also require more frequent reporting as part of a corrective action plan for a preneed examination.  If this happens, those due dates can be found below.

INACTIVE REPORTING

A certificate of Authority license that has become Inactive for any reason, must no longer engage in the practice of selling preneed, but will still have outstanding preneed contracts that have not been fulfilled.  These outstanding contracts must be reported to the Board on an annual basis.

ENDOWMENT CARE CEMETERY REPORTING

Annual reports of Endowment Care Trust must be reported to the Board for all Endowment Care Cemeteries.  This report is separate from the report of preneed activity and should focus only on the Endowment Care Trust and interment rights sold.

RENEWALS

All preneed-related licenses issued by the Board shall expire annually on October 01, and must be renewed no later than 30 days prior to expiration each year in order to continue to sell preneed in Alabama.  The renewal period begins July 1st, each year, and remains open until September 1st, each year.  If a preneed license is not renewed in that time period, the renewal becomes late and must be renewed with a late penalty between the dates of September 2nd, and October 1st, each year.  If a preneed license is not renewed by October 01, each year, the license becomes expired, and all preneed activity must cease until the proper reinstatement steps are met to reinstate the license.

FINANCIAL STATEMENT WAIVER

Due April 1st of each year

Financial statement waivers are only valid for one renewal period.  An application for a financial statement waiver must be submitted to the Board every year in order to be continuously waived of submitting financial statements.