S*0463(Rat #0107, Act #0067 of 1995)  General Bill, By Passailaigue
 A Bill to amend the Code of Laws of South Carolina, 1976, by adding Section
 32-7-95 so as to provide that prohibitions against preneed funeral contract
 soliciting and advertising apply to funeral directors acting as agents for a
 life insurer and to the life insurer; to amend Section 32-7-20, relating to
 preneed funeral contracts, so as to provide that a funeral director employed
 as a life insurance agent only may act as an agent in connection with the
 funding of a preneed funeral contract; to amend Section 32-7-25, relating to
 irrevocable preneed funeral contracts, so as to further regulate preneed
 funeral contract agreements; to amend Section 32-7-35, relating to transfer of
 preneed funeral contracts, so as to provide conditions for transfer of such
 contracts funded by an insurance policy; to amend Section 38-55-310, relating
 to the prohibition against a life insurer operating an undertaking business,
 so as to provide an exception; and to amend Section 38-55-330, relating to the
 prohibition against a funeral director being licensed as a life insurance
 agent, so as to delete this prohibition, and to provide conditions with which
 a funeral director must comply when licensed as a life insurance
 agent.-amended title

   02/08/95  Senate Introduced and read first time SJ-9
   02/08/95  Senate Referred to Committee on General SJ-9
   02/28/95  Senate  Polled favorable from General SJ-14
   03/01/95  Senate Read second time SJ-22
   03/07/95  Senate Read third time and sent to House SJ-16
   03/08/95  House  Introduced and read first time HJ-8
   03/08/95  House  Referred to Committee on Medical, Military,
                     Public and Municipal Affairs HJ-8
   03/30/95  House  Committee report: Favorable with amendment
                     Medical, Military, Public and Municipal Affairs HJ-3
   04/05/95  House  Debate adjourned until Tuesday, April 11, 1995 HJ-20
   04/11/95  House  Objection by Rep. Richardson, Tripp, Vaughn,
                     Easterday, Herdklotz, McAbee, Cooper, J. Young,
                     Townsend, Stille, Carnell, Seithel & Limehouse HJ-16
   04/12/95  House  Objection withdrawn by Rep. Cooper & J. Young HJ-73
   04/12/95  House  Objection withdrawn by Rep. Limehouse &
                     Richardson HJ-73
   04/19/95  House  Objection withdrawn by Rep. Herdklotz HJ-29
   04/26/95  House  Objection withdrawn by Rep. Seithel HJ-116
   04/27/95  House  Objection withdrawn by Rep. Carnell, Vaughn,
                     Tripp & Stille HJ-53
   04/27/95  House  Debate adjourned until Tuesday, May 2, 1995 HJ-53
   05/03/95  House  Debate adjourned HJ-77
   05/04/95  House  Debate adjourned until Thursday, May 11, 1995 HJ-25
   05/04/95  House  Objection withdrawn by Rep. Easterday HJ-28
   05/11/95  House  Debate adjourned until Tuesday, June 6, 1995 HJ-33
   05/11/95  House  Reconsidered HJ-39
   05/11/95  House  Objection by Rep. Carnell, Spearman, Tripp,
                     Stille, P. Harris & Vaughn HJ-39
   05/17/95  House  Objection withdrawn by Rep. Vaughn & Tripp HJ-22
   05/30/95  House  Amended HJ-46
   05/30/95  House  Read second time HJ-49
   05/30/95  House  Roll call Yeas-75  Nays-22 HJ-50
   05/31/95  House  Read third time and returned to Senate with
                     amendments HJ-49
   06/01/95  Senate Concurred in House amendment and enrolled SJ-15
   06/06/95         Ratified R 107
   06/12/95         Signed By Governor
   06/12/95         Effective date 11/01/95
   08/09/95         Copies available
   08/09/95         Act No. 67

AN ACT TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 32-7-95 SO AS TO PROVIDE THAT PROHIBITIONS AGAINST PRENEED FUNERAL CONTRACT SOLICITING AND ADVERTISING APPLY TO FUNERAL DIRECTORS ACTING AS AGENTS FOR A LIFE INSURER AND TO THE LIFE INSURER; TO AMEND SECTION 32-7-20, RELATING TO PRENEED FUNERAL CONTRACTS, SO AS TO PROVIDE THAT A FUNERAL DIRECTOR EMPLOYED AS A LIFE INSURANCE AGENT ONLY MAY ACT AS AN AGENT IN CONNECTION WITH THE FUNDING OF A PRENEED FUNERAL CONTRACT; TO AMEND SECTION 32-7-25, RELATING TO IRREVOCABLE PRENEED FUNERAL CONTRACTS, SO AS TO FURTHER REGULATE PRENEED FUNERAL CONTRACT AGREEMENTS; TO AMEND SECTION 32-7-35, RELATING TO TRANSFER OF PRENEED FUNERAL CONTRACTS, SO AS TO PROVIDE CONDITIONS FOR TRANSFER OF SUCH CONTRACTS FUNDED BY AN INSURANCE POLICY; TO AMEND SECTION 38-55-310, RELATING TO THE PROHIBITION AGAINST A LIFE INSURER OPERATING AN UNDERTAKING BUSINESS, SO AS TO PROVIDE AN EXCEPTION; AND TO AMEND SECTION 38-55-330, RELATING TO THE PROHIBITION AGAINST A FUNERAL DIRECTOR BEING LICENSED AS A LIFE INSURANCE AGENT, SO AS TO DELETE THIS PROHIBITION, AND TO PROVIDE CONDITIONS WITH WHICH A FUNERAL DIRECTOR MUST COMPLY WHEN LICENSED AS A LIFE INSURANCE AGENT.

Be it enacted by the General Assembly of the State of South Carolina:

Advertising and soliciting prohibitions apply

SECTION 1. Chapter 7, Title 32 of the 1976 Code is amended by adding:

"Section 32-7-95. The prohibitions of Section 32-7-90 as to solicitations and advertising relating to preneed funeral contracts apply equally to a funeral director licensed under this title as an agent for a life insurer as well as to the life insurer doing business in this State."

Insurance code provisions apply

SECTION 2. Section 32-7-20(E) of the 1976 Code is amended to read:

"(E) Subsections (A), (B), (C), and (D) do not apply to contracts for funeral service or merchandise funded by insurance policies which are otherwise regulated by law; however, Section 38-55-330 governs the conduct of a licensed funeral director employed by a licensed funeral home in South Carolina, except a licensed funeral director employed by a licensed funeral home owned by a company not chartered in the United States, who also is licensed as an agent for a life insurer doing business in this State."

Irrevocable trust funded preneed contract

SECTION 3. Section 32-7-25 of the 1976 Code is amended to read:

"Section 32-7-25. The contracts governed by the provisions of this chapter may be made irrevocable at the option of the purchaser. If the purchaser selects an irrevocable contract he must be allowed thirty days to examine the contract. Within that period, the purchaser may revoke his decision to enter this contract and all monies paid by the purchaser must be refunded. An irrevocable trust funded preneed funeral contract executed under Chapter 7 of Title 32 may not be converted to an insurance funded preneed funeral contract. If a premium is paid on an insurance funded preneed irrevocable contract and the contract is revoked within thirty days, the full premium must be refunded."

Conditions for contract transfer

SECTION 4. Section 32-7-35 of the 1976 Code is amended to read by adding at the end:

"A preneed funeral contract, whether revocable or irrevocable, funded by an insurance policy, may be transferred to another provider only at the prior written request of the purchaser or the beneficiary if the purchaser dies before the beneficiary or pursuant to Section 32-7-45. The selling provider may not collect, charge, or receive a fee in connection with this transfer of a preneed funeral contract funded by an insurance policy. An irrevocable preneed funeral contract funded by an insurance policy may be transferred to another provider only at the prior written request of the purchaser or the beneficiary if the purchaser dies before the beneficiary or pursuant to Section 32-7-45."

Exception to prohibition

SECTION 5. Section 38-55-310 of the 1976 Code is amended to read:

"Section 38-55-310. It is unlawful for a life insurer, except a fraternal benefit association licensed to do business in this State, to own, manage, supervise, operate, or maintain a mortuary or undertaking establishment or to permit its officers, agents, or employees to own, operate, or maintain a funeral or undertaking business, except as may be authorized under Section 38-55-330."

Prohibition removed

SECTION 6. Section 38-55-330 of the 1976 Code is amended to read:

"Section 38-55-330. A licensed funeral director employed by a licensed funeral home in South Carolina may be licensed as an agent for a life insurer doing business in this State. However, a funeral director licensed under this section may act as an agent for a life insurer only in connection with the funding of a preneed funeral contract under Chapter 7 of Title 32. The amount of an insurance policy sold by a licensed funeral director licensed under this section may not exceed the amount of the preneed funeral contract as defined in Section 32-7-10(3). In addition to the filing and approval requirements of Section 38-61-20, a life insurer must file a sample policy to fund a preneed funeral contract with the South Carolina Board of Funeral Service, and before the policy can be marketed in this State the board must verify that the policy is consistent with Title 32, Chapter 7. The board also shall maintain a list of all funeral directors licensed as insurance agents, the insurer each director represents, and the type of policy each director is licensed to sell. Except for a funeral director licensed under this title, no insurance agent, as defined in Section 38-1-20, or person, as defined in Section 38-1-20, shall sell any policy, as defined in Section 38-1-20, which has for its purposes the funding of any funeral services, or the furnishing or delivery of personal property, merchandise, services of any nature in connection with the final disposition of a dead human body, to be furnished or delivered at a time determinable by the death of a person whose body is to be disposed of, but does not mean the furnishing of a cemetery lot, crypt, niche, mausoleum, grave marker, or monument."

Time effective

SECTION 7. This act takes effect November 1, 1995.

Approved the 12th day of June, 1995.