4.06: Transfer of Pre-Need Funeral Contracts

(1) Upon receipt of written authorization to do so from the buyer of a pre-need funeral contract, or the buyer’s legal representative, a licensed funeral establishment shall transfer or assign that pre-need funeral contract to another licensed funeral establishment designated by that buyer or legal representative, provided that the funeral establishment to whom the contract is to be transferred or assigned has indicated in writing that it will agree to honor that contract.

(2) In the event of any transfer or assignment of a pre-need funeral contract pursuant to 239 CMR 4.08 4.06(1):

(a) if any all funds received by the transferor funeral establishment from the buyer in connection with that pre-need funeral contract and placed are being held in a funeral trust account pursuant to 239 CMR 4.11 4.09, all such funds shall be transferred to the transferee funeral establishment within ten (10) business days, as provided in 239 CMR 4.11 4.09(5). The transferor funeral establishment shall furnish written confirmation to the buyer, and the beneficiary (if different), that these funds have been transferred to the transferee funeral establishment not later than thirty (30) days after the transfer or assignment of the pre-need funeral contract occurs;

(b) If any funds received by the transferor funeral establishment from the buyer in connection with that pre-need funeral contract were used to purchase a pre-need insurance policy pursuant to 239 CMR 4.10, the transferor funeral establishment shall send a copy of the buyer’s written authorization for transfer of that pre-need funeral contract to the insurance company which issued the pre-need insurance policy and request that the insurance company take all necessary and appropriate steps to modify the insurance policy so that the transferee funeral establishment may receive payment for any funeral goods and services it provides to the beneficiary of that policy. The transferor funeral establishment shall furnish written confirmation to the buyer, and the beneficiary (if different), that the request for transfer of the pre-need funeral contract and appropriate modification of the insurance policy have been sent to the insurance company which issued the pre-need insurance policy not later than thirty (30) days after the transfer or assignment of the pre-need funeral contract occurs.

4.07:   Funding Methods ‑ Pre‑Need Insurance Policies and Annuities

(1)   Any agent or employee of any licensed funeral establishment who sells or otherwise provides insurance policies or annuities as a method for funding pre‑need funeral contracts shall comply with all applicable state and federal laws and regulations pertaining to the conduct of the business of insurance, including but not limited to all licensing requirements of the Massachusetts Division of Insurance.

(2)   Any agent or employee of any licensed funeral establishment who sells or otherwise provides insurance policies or annuities as a method for funding pre‑need funeral contracts shall, prior to accepting any funds as payment for the issuance of any such insurance policy or annuity, make all of the disclosures required by the Massachusetts Division of Insurance to the prospective purchaser of said insurance policy or annuity.

(3)   No licensed funeral establishment, nor any agent or employee thereof, shall require any buyer to purchase any insurance policy or annuity as a condition for entering into any pre‑need funeral contract.

(4)   Any person who purchases a pre‑need insurance policy or annuity from any agent or employee of any licensed funeral establishment who is duly licensed as an insurance agent by the Massachusetts Division of Insurance, may cancel said policy or annuity without penalty any time within ten days after said policy or annuity contract is delivered to him or her by surrendering the policy or annuity contract to either the insurance company which issued said policy or annuity or the agent from whom it was purchased. Upon surrender of such policy or annuity, the purchaser shall be entitled to a full refund of all payments made in connection with said policy or annuity. No licensed funeral establishment, nor any agent or employee thereof, shall impose any penalty or surcharge (monetary or otherwise) on any person exercising said right of cancellation.

(5)   The requirements of 239 CMR 4.07 shall apply to any and all forms of insurance which are sold or utilized for the purpose of providing funding for a pre‑need funeral contract, regardless of how named.

4.05 4.07: Cancellation Rights Cancellation of Pre-Need Funeral Contracts

(1) Any buyer of a pre‑need funeral contract may cancel that contract and receive a full refund of all monies paid or transferred to the licensed funeral establishment in connection with that contract, without penalty, at any time within ten days after signing said contract. After the expiration of this ten‑day "cooling off period" a pre‑need funeral contract may be canceled in accordance with 239 CMR 4.06(8). 239 CMR 4.07(3).

(2) Where an application by the buyer or contract beneficiary of a pre‑need funeral contract for government benefits is pending, the buyer may waive his/her right to cancel said contract within this ten‑day "cooling off" period, but only by signing a written waiver of that right. Said waiver shall not affect the buyer's right to cancel transfer that pre-need funeral contract pursuant to 239 CMR 4.06(8). 239 CMR 4.06.

(3) If a pre-need funeral contract was revocable at the time it was originally created, The the buyer who signed a that pre‑need funeral contract, or his/her legal representative, may cancel a that pre‑need funeral contract with a licensed funeral establishment at any time after the expiration of the ten-day “cooling off” period specified in 239 CMR 4.07(1) above by sending written notice of such cancellation, via certified mail, return receipt requested, to said the licensed funeral establishment.

(a) If a funeral trust account has been established to fund said that pre‑need funeral contract, and the licensed funeral establishment is not the trustee, the buyer funeral establishment shall forward a copy of said notice of cancellation to the named trustee of said funeral trust account, and take all steps necessary to ensure that all funds contained in that funeral trust account are refunded to the buyer, without penalty, within ten (10) days after the notice of cancellation is received by the trustee of the funeral trust account.

(b) If a pre-need insurance policy was purchased to fund that pre-need funeral contract, the licensed funeral establishment shall forward a copy of the notice of cancellation of that pre-need funeral contract to the insurance company which issued the pre-need insurance policy.

(4) If a pre-need funeral contract was irrevocable at the time it was originally created, such a contract shall not be cancelled by either party except by order of a court of competent jurisdiction. Such a contract may, however, be transferred to another licensed funeral establishment in accordance with 239 CMR 4.06.

(5) No licensed funeral establishment, or agent or employee thereof, shall impose any surcharge, fee or other penalty (monetary or otherwise) upon any person buyer of a pre‑need funeral contract who seeks to exercise his or her rights to cancel a pre-need funeral contract under 239 CMR 4.05 4.07.

4.08: Restrictions on Use or Disposition of Funds Received in Connection with Pre-Need Funeral Contracts

(1) Prohibition Against Personal or Business Uses - No licensed funeral establishment, nor any agent or employee thereof, shall use or pledge any funds which are received in connection with any pre-need funeral contract for any personal use, payment of the operating expenses of any funeral establishment, issuance of a loan to any person, as collateral for any loan, or for any purpose other than those expressly authorized by that pre-need funeral contract and 239 CMR 4.00.

(2) Funeral Trust Account or Pre-Need Insurance Policy Required - All funds received by a licensed funeral establishment, or by any employee or agent thereof, in connection with any pre-need funeral contract shall be:

(a) Deposited in a funeral trust account which meets the requirements of 239 CMR 4.09 not later than five (5) business days after the expiration of the “cooling-off” period described in 239 CMR 4.07(1); or

(b) Paid to an insurance company for the purchase of a pre-need insurance policy or annuity pursuant to 239 CMR 4.10 not later than five (5) business days after the expiration of the “cooling-off” period described in 239 CMR 4.07(1).

Each time a licensed funeral establishment receives any funds in connection with any pre-need funeral contract to which it is a party, that funeral establishment shall furnish the buyer, and the beneficiary (if different), with written confirmation that such funds have been deposited in a funeral trust account or used to purchase a pre-need insurance policy, as required by this section, not later than thirty (30) days after such funds are received. Such written confirmation shall bear the signature of a duly-authorized representative of the banking institution in which the funeral trust account has been established, or a duly-authorized representative of the insurance company which issued the pre-need insurance policy, whichever applies.

(3) Reimbursement for Newly Imposed Taxes Permitted - Notwithstanding the provisions of 239 CMR 4.08(1), a licensed funeral establishment may require a customer to reimburse said funeral establishment for any local, state or federal taxes or fees imposed after the execution of the pre-need funeral contract, including but not limited to any value-added or sales taxes, for which the funeral establishment is held responsible by the taxing authority. In cases where the pre-need funeral contract is funded in full or in part, said reimbursement shall be considered an additional sum to be paid by the customer, and the funeral establishment shall not be required to deduct it from any income which accrues on the amount initially placed with the funeral establishment for investment in a pre-need funeral trust account or pre-need , funeral insurance policy or annuity other funding arrangement.

(4) Access to Pre-Need Contract Funds - Neither a licensed funeral establishment, nor any agent or employee thereof, shall have access to any of the funds received by that funeral establishment in connection with any pre-need funeral contract for any purpose other than:

(a) Obtaining payment for the actual costs of funeral goods and/or services provided to the beneficiary upon presentation of the documentation required by 239 CMR 4.08(5);

(b) Transferring those funds to another funeral trust account, or to a pre-need insurance policy or annuity, upon written authorization to do so from the buyer, the beneficiary of the pre-need funeral contract (if different from the buyer), or the duly authorized legal representative of the buyer or beneficiary;

(c) Transferring those funds to another licensed funeral establishment in connection with a transfer of the underlying pre-need funeral contract, pursuant to and in accordance with the requirements of 239 CMR 4.06; or

(d) Refunding those funds to the buyer or the beneficiary upon receipt of a written notice of cancellation of the pre-need funeral contract from the buyer, the beneficiary of the pre-need contract (if different from the buyer) or the duly authorized legal representative of the buyer or beneficiary, to the extent permitted by 239 CMR 4.07.

(5) Documentation Required for Payment for Services Rendered – Before obtaining or receiving payment for funeral goods and/or services rendered to the beneficiary of any pre-need funeral contract pursuant to 239 CMR 4.08(4)(a), the licensed funeral establishment shall present both of the following to the named trustee of the funeral trust account, or the duly authorized representative of the insurer which issued the pre-need insurance policy or annuity, which was used to fund that pre-need funeral contract:

(a) A certified copy of the death certificate for the beneficiary; and

(b) A written statement, signed by a registered licensed funeral director, certifying that the pre‑need funeral contract has been performed in full.

(6) Allocation and Disposition of Funds – Price-Protected Pre-Need Funeral Contracts – If a pre-need funeral contract is a price-protected pre-need funeral contract, as defined in 239 CMR 4.01 above, all funds paid by the buyer in connection with that pre-need funeral contract shall be treated as follows:

(a) All income earned on the funds paid by the buyer shall be applied to offset any increase in the costs of the funeral goods and/or services specified in the pre-need funeral contract;

(b) If the funds available from the funeral trust account or pre-need insurance policy at the time of the contract beneficiary’s death exceed the amounts necessary to pay for all of the funeral goods and services being provided for that contract beneficiary, including any “cash advance” goods or services which are provided by vendors other than the funeral establishment itself, the funds shall be used to pay for those goods and services. Any excess funds remaining after all such goods and services have been paid for may be retained by the funeral establishment;

(c) If the funds available from the funeral trust account or pre-need insurance policy at the time of the contract beneficiary’s death are not sufficient to pay for all of the funeral goods and services being provided for that contract beneficiary, including any “cash advance” goods and services which are provided by vendors other than the funeral establishment itself, the available funds shall be applied as follows:

1. The available funds shall be divided into two “pools”, one of which shall be used to pay for the funeral goods and services being provided by the funeral establishment itself, and the other of which shall be used to pay for the “cash advance” goods and services being provided by vendors other than the funeral establishment.

2. The allocation of the available funds between the two “pools” shall be determined on the basis of the costs set forth in the itemized statement of funeral goods and services which was prepared at the time the price-protected pre-need funeral contract was originally made.

3. The percentage of the available funds to be allocated for the funeral goods and services being provided by the funeral establishment shall be determined by dividing the total cost of the goods and services being provided by the funeral establishment, as set forth in the itemized statement, by the total cost of the funeral as set forth in that same itemized statement.

4. The percentage of the available funds to be allocated for the cash-advance goods and services being provided by vendors other than the funeral establishment shall be determined by dividing the total cost of the cash-advance goods and services being provided by vendors other than the funeral establishment, as set forth in the itemized statement, by the total cost of the funeral as set forth in that same itemized statement.

5. If the portion of the funds allocated to cover the costs of the funeral goods and services provided by the funeral establishment itself, as determined pursuant to 239 CMR 4.08(6)(c)3 above, is equal to or greater than the actual costs of those funeral goods and services at the time of the contract beneficiary’s death, the funeral establishment shall be paid in full for those goods and services. Any excess funds then remaining shall not be retained by the funeral establishment, but shall instead be added to the funds available to cover the cash-advance goods and services and applied to cover those costs.

6. If the portion of the funds allocated to cover the costs of the funeral goods and services provided by the funeral establishment itself, as determined pursuant to 239 CMR 4.08(6)(c)3 above, is less than the actual costs of those funeral goods and services at the time of the contract beneficiary’s death, the funeral establishment shall be paid the amount allocated for those funeral goods and services as determined pursuant to 239 CMR 4.08(6)(c)3 above. The funeral establishment shall not bill the contract beneficiary, or any other person, for any resulting difference between the funds allocated to cover the costs of the goods and services provided by the funeral establishment pursuant to 239 CMR 4.08(6)(c)3 above and the actual costs of those goods and services.

7. The contract beneficiary, or his or her estate, may be billed only for any difference between the funds available to cover the costs of the cash-advance goods and services, as determined pursuant to 239 CMR 4.08(6)(c) above, and the actual costs of those cash-advance goods and services, and only if the price protection provisions of the pre-need funeral contract did not apply to the cash-advance goods and services provided by the vendors other than the funeral establishment.

(7) Disposition of Funds - Pre-Need Funeral Contracts Without Price Protection Provisions – If a pre-need funeral contract is not a price-protected pre-need funeral contract, as defined in 239 CMR 4.01 above, all funds paid by the buyer in connection with that pre-need funeral contract shall be treated as follows:

(a) All income earned on the funds paid by the buyer shall be applied to offset any increase in the costs of the goods and/or services specified in the pre‑need funeral contract.

(b) In the event that the funds available in the funeral trust account or pre-need insurance policy as of the date of the contract beneficiary’s death exceed the cost of the funeral goods and/or services provided, including the cash-advance goods and services, the excess shall be refunded to the estate of the contract beneficiary. In such event, the amount refunded may be subject to claims of the Commonwealth or the United States.

(c) In the event that the funds available in the funeral trust account or pre-need insurance policy as of the date of the contract beneficiary’s death are not sufficient to cover the full cost of the funeral goods and/or services provided, including the cash-advance goods and services, the estate of the contract beneficiary may be billed for the amount of any resulting deficiency.

4.09: Funeral Trust Accounts

(1) All funeral trusts funeral trust accounts shall be established and administered in compliance with the requirements of 239 CMR 4.06.4.09.

(2) Investment Requirements. Creation of Funeral Trust Accounts - Where a funeral trust is established pre-need funeral contract will be funded through a funeral trust account, the licensed funeral establishment shall deposit at least 90% of all funds received in connection with that funeral trust pre-need funeral contract in a funeral trust account within five business days after the expiration of the “cooling‑off” period described in 239 CMR 4.07(1). Every such funeral trust account shall:

(a) Designate either the licensed funeral establishment, or a federal or state‑chartered banking institution or trust company within the Commonwealth of Massachusetts which has trust powers, as the trustee of said funeral trust account;

(b) Designate the person for whom the funeral goods and/or services are to be provided as the beneficiary of said funeral trust account;

(c) Indicate that the funds are to be used solely for the purpose of paying for funeral goods and/or services; and

(d) Provide that the entire account balance shall be payable to the licensed funeral establishment which provides the specified funeral goods and/or services to the beneficiary at time of death upon presentation of a certified copy of the death certificate for the named trust beneficiary and a written statement from the funeral establishment, signed by a registered licensed funeral director, certifying that the terms of the pre‑need funeral contract have been performed in full.

(3) Investment Requirements

(a) If the named trustee of a funeral trust account established pursuant to 239 CMR 4.09(2) is a federal or state-chartered banking institution which has trust powers, the funds placed in that funeral trust account may be invested in Where the named trustee of a funeral trust account established pursuant to 239 CMR 4.06 4.11(2)(a) is a federal or state‑chartered banking institution or trust company within the Commonwealth which has trust powers, the funeral trust account may take the form of: any form of investment which may lawfully be established or maintained by the trust department of that banking institution or trust company.

(b) If the named trustee of a funeral trust account established pursuant to 239 CMR 4.09(2) is a federal or state-chartered banking institution which does not have trust powers, the funds placed in that funeral trust account shall be invested only in a bank account or other form of deposit which is insured.

-5. A bank account which is insured; or

-4. Any other form of investment which may lawfully be established or maintained by the trust department of the banking institution or trust company in which the funeral trust account is established.

(c) All funds deposited in said funeral trust account shall be invested and managed in a manner which is consistent with the “prudent man” investment standard for trustees.

(4) Common or Commingled Trust Accounts

Funds received in connection with more than one funeral trust pre-need funeral contract may be deposited in a single common or commingled funeral trust account under the terms of a single trust instrument, provided that:

1. (a)  The common or commingled funeral trust account is established and administered in accordance with all applicable requirements of 239 CMR 4.06(2)(e)1.4.09; and

2. (b) Separate records, which meet the requirements of 239 CMR 4.06(10) 4.12(2), are maintained for each customer whose funds are deposited in the common or commingled funeral trust account.

(5) Obligations to Locate Trust Beneficiary.

(a)   If a licensed funeral establishment which is a party to a pre‑need funeral contract does not provide the funeral goods and/or services for the beneficiary of that contract upon his/her death, then, upon receipt of a certified copy of the death certificate of such beneficiary, the trustee of any funeral trust account established to fund said pre‑need funeral contract shall pay the assets of said funeral trust account to the estate or legal representative of the named beneficiary in accordance with the applicable requirements of 239 CMR 4.06(4), 239 4.06(5) and 239 CMR 4.06(8) 4.09.

(b)   If a licensed funeral establishment has not received notice of the death of the named beneficiary of a pre‑need funeral contract for whom a funeral trust account has been established under 239 CMR 4.06 4.09 within 100 years of the beneficiary's date of birth, said funeral establishment shall take all reasonable steps to contact that beneficiary or his/her legal representative to inform them of the existence of said funeral trust account. A written notice of the existence of said funeral trust account, sent via certified mail, return receipt requested, to the last known address of the trust beneficiary and his/her legal representative shall be sufficient to satisfy the requirements of 239 CMR 4.06(10) 4.09(5)(b).

(c)   If, after a reasonable search, a licensed funeral establishment which is the named trustee of a funeral trust account established under 239 CMR 4.00 4.09 is unable to locate the named beneficiary of said funeral trust account or his/her legal representative, said funeral establishment shall turn over all funds in the funeral trust account to the Treasurer of the Commonwealth, in accordance with the laws of the Commonwealth. Any such transfer of funds to the Treasurer of the Commonwealth shall constitute a complete release of all obligations of such licensed funeral establishment pursuant to the pre‑need funeral contract and/or funeral trust agreement.

4.07 4.10:   Funding Methods ‑ Pre‑Need Insurance Policies and Annuities

(1)   Any agent or employee of any licensed funeral establishment who sells or otherwise provides insurance policies or annuities as a method for funding pre‑need funeral contracts shall comply with all applicable state and federal laws and regulations pertaining to the conduct of the business of insurance, including but not limited to all licensing requirements of the Massachusetts Division of Insurance.

(2)   Any agent or employee of any licensed funeral establishment who sells or otherwise provides insurance policies or annuities as a method for funding pre‑need funeral contracts shall, prior to accepting any funds as payment for the issuance of any such insurance policy or annuity, make all of the disclosures required by the Massachusetts Division of Insurance to the prospective purchaser of said insurance policy or annuity.

(3)   No licensed funeral establishment, nor any agent or employee thereof, shall require any buyer to purchase any insurance policy or annuity as a condition for entering into any pre‑need funeral contract.

(4)   Any person who purchases a pre‑need insurance policy or annuity from any agent or employee of any licensed funeral establishment who is duly licensed as an insurance agent by the Massachusetts Division of Insurance, may cancel said policy or annuity without penalty any time within ten days after said policy or annuity contract is delivered to him or her by surrendering the policy or annuity contract to either the insurance company which issued said policy or annuity or the agent from whom it was purchased. Upon surrender of such policy or annuity, the purchaser shall be entitled to a full refund of all payments made in connection with said policy or annuity. No licensed funeral establishment, nor any agent or employee thereof, shall impose any penalty or surcharge (monetary or otherwise) on any person exercising said right of cancellation.

(5)   The requirements of 239 CMR 4.07 4.10 shall apply to any and all forms of insurance which are sold or utilized for the purpose of providing funding for a pre‑need funeral contract, regardless of how named.

4.08: 4.11:  Marketing Of Pre‑Need Funeral Products

(1)   No agent or employee of any licensed funeral establishment shall visit or call upon any patient in a hospital, convalescent or nursing home, rest home, charitable home for the aged, infirmary maintained in a town, intermediate care facility for the mentally retarded, or other health care facility, for the purpose of soliciting or inducing such patient to enter into any pre‑need funeral contract, or for the purpose of soliciting or inducing such patient to establish a funeral trust account or purchase a pre‑need insurance policy or annuity, unless said agent or employee has received a written request from the patient or his/her legal representative to do so prior to the date of the visit.

(2)   A licensed funeral establishment, or any agent or employee thereof, may utilize telephonic communications for the purpose of soliciting or inducing any person to enter into a pre‑need funeral contract, establish a funeral trust account, or purchase any pre‑need insurance policy or annuity, provided that:

(a)   The prospective customer is informed at the beginning of the telephonic communication that the telephonic communication is being made for the purpose of inducing him or her to enter into a pre‑need funeral contract, establish a funeral trust account, or purchase a pre‑need insurance policy or annuity; and

(b)   The telephonic communication is terminated immediately upon any request to do so from the prospective customer.

(3)   No agent or employee of any licensed funeral establishment shall solicit or attempt to induce any person to enter into a pre‑need funeral contract, establish any funeral trust account, or purchase any pre‑need insurance policy or annuity by any method or means which is false, deceptive, misleading, coercive, intimidating or threatening.

(4)   No licensed funeral establishment, nor any agent or employee thereof, shall knowingly induce or attempt to induce any person to cancel or revoke any pre‑existing pre‑need funeral contract, funeral trust account, or pre‑need insurance policy or annuity.

(5)   Advertising of Pre‑need Funeral Products.

(a)   Advertising of pre‑need funeral contracts, funeral trust accounts and/or pre‑need insurance policies or annuities by any licensed funeral establishment, or agent or employee thereof, shall not be false, deceptive or misleading.

(b)   All advertising of pre‑need funeral contracts, funeral trust accounts and/or pre‑need insurance policies or annuities shall disclose all of the following information:

1.   The type of product (e.g., funeral trust account, pre‑need insurance policy, annuity, etc.) which is to be, or may be, used to fund the pre‑need funeral contract; and

2.   The nature of the relationship between the agent who solicits the purchase of the product, the funeral establishment which is to provide the funeral goods and/or services, the buyer, and the individual or institution which will receive and/or hold any funds paid by the buyer in connection with the purchase of the product.

(c)   All advertising of pre‑need funeral contracts, funeral trust accounts, and/or pre‑need insurance policies or annuities by a licensed funeral establishment, or any agent or employee thereof, shall comply with all other applicable state and federal laws and regulations pertaining to such advertising.

4.12: - Recordkeeping Requirements

(1) Each licensed funeral establishment shall maintain a separate, legible written record for each pre-need funeral contract to which that funeral establishment is a party. Said records shall be maintained at all times on the premises of that funeral establishment, or on the premises of another specifically-identified licensed funeral establishment within the Commonwealth which is owned and operated by the same proprietor, corporation, partnership, association, limited liability company, limited liability partnership or other business entity. At a minimum, such records shall contain all of the following information:

(a) A fully-executed copy of the pre-need funeral contract, which shall include all of the information required by 239 CMR 4.02;

(b) Satisfactory written documentation of each amendment or modification of the terms of that pre-need funeral contract which has been made since the contract was originally executed, including but not limited to written documentation that the buyer and/or beneficiary has consented in writing to each such amendment or modification;

(c) In the case of any pre-need funeral contract which was transferred to another funeral establishment after its original execution, the name and address of the funeral establishment to which that pre-need funeral contract was transferred and written documentation that the buyer and/or beneficiary has authorized that transfer in writing;

(d) In the case of any pre-need funeral contract which has been performed (i.e., the funeral goods and services specified in that contract have been provided to the beneficiary of that contract), a copy of the death certificate for the beneficiary of that pre-need funeral contract and written documentation that the funeral goods and services specified in that contract were provided;

(e) Where the funding source for the funeral goods and services to be provided pursuant to that pre-need funeral contract is a funeral trust account:

(11)   Records Required.

(a)   A licensed funeral establishment which serves as the named trustee of any funeral trust established pursuant to 239 CMR 4.00 shall maintain a separate, written record for each such funeral trust. Said records shall be legible and shall be maintained at all times at a location within the Commonwealth specified by the funeral establishment in its annual report submitted pursuant to 239 CMR 4.02(5). Said records, at a minimum, shall contain all of the following information:

1.   The name and address of the trust settlor;

2. The name, address, date of birth and social security number of the named trust beneficiary;

3. Copies of bank statements and deposit slips from the bank or financial institution which is holding the funds deposited in the funeral trust account which show the date on which the funeral trust was originally established, and the amount of money originally deposited in the funeral trust account at the time the funeral trust account was originally established, and the date and amount of each subsequent deposit in the funeral trust account, if any;

4. The name and address of the bank or financial institution which is holding the funds deposited in the funeral trust account;

5. The balance in the funeral trust account, on a monthly basis;

6. A description of the form and manner in which the trust funds are invested;

7. A copy of the individual trust agreement, or, in the case of a common or commingled funeral trust account established pursuant to 239 CMR 4.06 (2)(e) 4.09(4), a copy of the Master Trust Agreement for the common account; and

8. Written documentation sufficient to demonstrate compliance with the all applicable requirements of 239 CMR 4.00 with respect to all changes in the terms or provisions of the funeral trust account; and

(f) Where the funding source for the funeral goods and services to be provided pursuant to that pre-need funeral contract is a pre-need insurance policy or annuity:

1. the name and address of the insurance company which issued the policy or annuity;

2. the amount of money originally paid to that insurance company for the issuance of that policy or annuity; and

3. the face value of that insurance policy or annuity.

(2) In the case of any common or commingled funeral trust account established pursuant to 239 CMR 4.06(2)(e) 4.09(4), a separate written record which complies with the above‑noted requirements of 239 CMR 4.12(1) above shall be maintained for each separate trust beneficiary.

(3) Any and all records established and maintained pursuant to 239 CMR 4.06(11)(a) 4.12 shall be available upon request, at any time during regular business hours, to any duly authorized representative of the Board for inspection.

(4) Any and all records required by 239 CMR 4.06(11)(a) pertaining to a particular funeral trust 4.12 shall be made available by the licensed funeral establishment which serves as trustee of said trust, during regular business hours, to the settlor of said trust, the named beneficiary of said trust, buyer of the pre-need funeral contract to whom those records pertain, the beneficiary of the pre-need funeral contract to whom those records pertain, or the legal representative of either, for inspection within ten days after receipt of any request from any such person to examine such records. Upon the request of the buyer, the contract beneficiary, or the legal representative of either, the licensed funeral establishment shall furnish copies of all such records to the requesting party. The licensed funeral establishment may charge a reasonable fee, not to exceed the actual costs of reproduction, for such copies.

(5)  In addition to the foregoing, a licensed funeral establishment which serves as trustee of any funeral trust account established under 239 CMR 4.00, shall send an annual statement of the earnings of the that funeral trust account to the named beneficiary of said funeral trust account, unless the beneficiary requests in writing that said statements not be sent.

(6) Every licensed funeral establishment shall file with the Board, on or before June 30 of each calendar year, a written report setting forth the following information:

(a) The number of pre‑need funeral contracts entered into during the preceding calendar year;

(b) The total number of pre-need funeral contracts to which the funeral establishment is a party;

(c) The funding method used to finance each pre‑need funeral contract to which the licensed funeral establishment is a party;

(d) The number of pre-need funeral contracts to which the licensed funeral establishment was a party and which were performed during the preceding calendar year;

(e) The number of pre-need funeral contracts to which the licensed funeral establishment was a party which were transferred during the preceding calendar year;

(f) The number of pre-need funeral contracts to which the licensed funeral establishment was a party which were cancelled during the preceding calendar year;

(g) The names and addresses of all banks, financial institutions, insurance companies and/or investment companies holding any funds received in connection with any such pre‑need funeral contracts during the preceding calendar year;

(h) The aggregate total balance, as of the end of the preceding calendar year, of all funeral trust accounts established in connection with any and all pre-need funeral contracts to which the licensed funeral establishment is a party;

(i) The aggregate total face value, as of the end of the preceding calendar year, of all pre-need insurance policies purchased in connection with any and all pre-need funeral contracts to which the licensed funeral establishment is a party; and

(j) The location within the Commonwealth of Massachusetts where its records pertaining to pre‑need funeral contracts are maintained.

Said report shall be made in such form and manner as the Board may direct.

(7) Upon request by any authorized representative of the Board in connection with any official inquiry, a licensed funeral establishment shall furnish complete written information regarding the total amount of assets being held in connection with pre‑need funeral contracts by each institution or company identified pursuant to 239 CMR 4.02(5)(c) 4.12(6) which is holding any such funds.

4.09: 4.13:  Penalties

Violation of any provision of this chapter shall be considered a violation of M.G.L. c. 112, § 84A(j), and may also be considered "gross misconduct in the practice of the profession" within the meaning of M.G.L. c. 112, § 61, and shall constitute grounds for disciplinary action by the Board.

4.14: Effective Date

The provisions of 239 CMR 4.00 shall apply to all pre-need funeral contracts which are established on or after January 1, 2004.

REGULATORY AUTHORITY:

239 CMR 4.00: M.G.L. c. 112, s. 85