La. R.S. § 37:865 Restriction On Use Or Disposition of Funds

• Library: Louisiana Statutes
• Edition: 2023
• Currency: Current with changes from the 2023 Legislative Session
• Year: 2023
• Citation: La. R.S. § 37:865

A. No funeral establishment, or any agent or employee thereof, shall borrow from, convert to another policy or surrender any preneed insurance policy or annuity, nor use or pledge any funds or insurance policy or annuity which is received in connection with any preneed funeral contract for any personal use, payment of funeral goods and services prior to the death of the funeral recipient, payment of the operating expenses of a 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 preneed funeral contract and this Section. There shall be no commingling of funeral trust accounts.

B. All funds delivered by a buyer to a funeral establishment in connection with any preneed funeral contract shall be either:

(1) Deposited in a trust account with a financial institution not later than five business days after the expiration of the ten day right of cancellation period provided in R.S. 37:864(A). Such deposit shall be made in individual accounts or certificates of deposits which name the funeral establishment and the funeral recipient and shall be for the exclusive use and benefit, including all earned interest, of the funeral recipient.

(2) Delivered to an insurance company for the purchase of a preneed insurance policy or annuity not later than five business days after the expiration of the ten day right to cancel period provided in R.S. 37:864(A).

C. A funeral establishment shall not be allowed to avoid the requirement of Subsections A and B of this Section by constructive delivery of funeral goods to the buyer, storing the funeral goods in a warehouse or other location, posting of any type surety bond or other security or in any other manner or form.

D. Each funeral establishment shall file an annual report of funeral trust accounts with the Louisiana State Board of Embalmers and Funeral Directors as a prerequisite for licensing as a funeral establishment. The report shall list the name of the funeral recipient, contract number, financial institution account number, principal amount, and accumulated interest of each funeral trust account outstanding. This report shall be in the form of a sworn affidavit certifying that the report is true and correct, that all funds received were deposited in a financial institution or delivered to an insurance company as required under Subsection B of this Section and that the funeral establishment has no other funds or deposits for funding prepaid funeral goods and services effective as of the date of the report. All records used to complete the report shall be made available to the board which shall make an inspection of such records at least once annually.