A. Contracts for prepaid funeral benefits provided for pursuant to Section 6125 of this title may be funded by assignments of life insurance proceeds to the contracting organization.

B. A guaranteed contract for prepaid funeral benefits provided for pursuant to paragraph 1 of subsection B of Section 6125 of this title which is to be funded by assignment of life insurance proceeds shall provide that:

1. The contract be funded by a life insurance policy issued in the face amount of the current purchase price of the contract for prepaid funeral benefits;

2. All accrued benefits under the policy shall become available for disbursement to the organization upon the death of the beneficiary of the prepaid funeral contract;

3. The beneficiary shall be the same individual under the contract as the insured under the life insurance policy; and

4. The disbursement of life insurance proceeds to the organization shall constitute payment in full to the organization for the services and merchandise contracted for.

C. A nonspecified contract for prepaid funeral benefits provided for pursuant to paragraph 2 of subsection B of Section 6125 of this title which is to be funded by assignment of life insurance proceeds shall provide that:

1. The total proceeds paid to the organization under the policy shall not exceed the actual retail cost of the funeral services and merchandise at the time of delivery;

2. Any funds remaining unused shall be refunded to the purchaser or to the personal representative of the purchaser or designated beneficiary; and

3. After November 1, 2009, all price lists reflecting the actual retail cost of funeral services and merchandise used at the time of the delivery of services shall be retained for a period of at least six (6) years.

D. A violation of this section shall constitute a misdemeanor and shall be punished by a fine of not less than One Hundred Dollars ($100.00) nor more than Five Hundred Dollars ($500.00) or by imprisonment in the county jail for not less than one (1) month nor more than six (6) months, or by both such fine and imprisonment.

Added by Laws 1988, c. 118, § 8, eff. Nov. 1, 1988. Amended by Laws 2009, c. 294, § 6, eff. Nov. 1, 2009; Laws 2013, c. 269, § 13, eff. Nov. 1, 2013.