(a) No person may sell a preneed contract without first having a valid certificate of authority.

(b)(1) No person may receive any funds for payment on a preneed contract who does not hold a valid certificate of authority.

(2) Any preneed transaction in which a buyer pays to the seller before need, in whole or in part, a purchase price for funeral or cemetery merchandise and services, and in which the seller is not obligated to deliver the contracted for merchandise or to perform the services until need, in whole or in part, shall be evidenced by a written preneed contract satisfying the requirements of this chapter and signed by the seller and the purchaser. No person may receive or accept any form of consideration in such a transaction without a fully signed written preneed contract. A transaction not evidenced by a signed written preneed contract shall be voidable at the election of the buyer and, if such election is made, the seller shall refund to the buyer the entire amount paid by the buyer together with interest thereon at the legal rate within 30 days after notice to the seller.

(3) The provisions of subdivision (1) do not apply to the purchase of a life insurance policy or annuity, the benefits of which are assigned to a funeral home and/or cemetery authority, or the benefits of which are to be paid to a funeral home and/or cemetery authority named as beneficiary of the policy or annuity, as long as the purchaser and funeral home and/or cemetery authority acknowledge in writing that no preneed contract is entered as a result of the purchase or assignment of the life insurance policy or annuity at the time the policy or annuity is purchased. Benefits from a life insurance policy or annuity issued under this subdivision shall only be paid to a funeral home and/or cemetery authority which provides funeral or cemetery merchandise and services at the death of the insured whether or not such funeral home and/or cemetery has been named as an assignee or the beneficiary of the policy or annuity. If the amount of the policy or annuity proceeds shall exceed the actual funeral costs at the time of need, such excess amount must be paid to a designated beneficiary, other than a funeral home and/or cemetery authority, or to the estate of the insured or annuitant.

(4) The provisions of subdivision (1) do not apply to any legal reserve insurance company or to any trust company or to any national or state bank or savings and loan association having trust powers which company, bank, or association receives any money in trust pursuant to the sale of a preneed contract.

(c) No person may obtain a certificate of authority under this article 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.

(d) The provisions of this section do not apply to a cemetery authority owned or operated by a governmental agency or a religious institution.