Cal. Code Regs. Tit. 16, § 1269 - Reporting of Pre-Need Funeral Trust Funds

(a) Each licensed funeral establishment and licensed funeral director who enters into any pre-need arrangements, contracts or plans described in and subject to the provisions of Article 9, Chapter 12, Division 3 of the Business and Professions Code shall file with the bureau annually on or before May 1 of each year and upon transfer of license or cessation of business, a written, verified or audited report, on form 21 P-4A (1/94) prescribed and furnished by the bureau, pertaining to funds received and held under such arrangements, contracts or plans. Firms utilizing a fiscal year accounting system may request permission, in writing to the bureau chief to file said report on a fiscal year basis and, if permission is granted, said report shall then be filed with the bureau no later than one hundred twenty (120) days from the date of the close of said fiscal year.

(b) The report required under this Article shall accompany the forms of assignment or transfer of a funeral establishment license. The report required hereunder upon cessation of business as a licensed funeral establishment shall be submitted thirty (30) days prior to such cessation of business.

(c) In cases where trust corpus is deposited in individual savings accounts, and not commingled for investment purposes, the bureau may require a verified report. Said requirement of verification shall be deemed complied with by a verification under penalty of perjury by the owner, partners, or, in the case of a corporation, by the president or vice-president and one (1) other officer thereof and, in addition thereto, all reports must contain a verification under penalty of perjury executed by at least two (2) trustees not employed by the funeral establishment and, in the case of a banking institution or trust company legally authorized to act as a trustee within the meaning of Section 7736 of Article 9, Chapter 12, Division 3, of the Business and Professions Code, a verification under penalty of perjury on behalf of such trustee by an authorized representative of said trustee.

(d) In cases where trust funds have been commingled for purposes of investment, the bureau may require, in addition to the written report required by subsection (a) of this section, an independent audit report prepared and signed by a Certified Public Accountant or Public Accountant, currently licensed in the State of California, which certifies compliance with the provisions of Article 9, Chapter 12, Division 3 of the Business and Professions Code and the provisions of this Article.

(e) All written reports required under this section shall include, but are not limited to, a statement setting forth:

(1) Amounts collected pursuant to pre-need arrangements, contracts or plans, or any agreements collateral thereto;

(2) Amounts deposited with the trustee and held in trust;

(3) Amounts of authorized expenditures of income allocable to individual accounts, itemized as to the nature of expenditures;

(4) Amount of authorized expenditures of income paid, itemized as to the nature of expenditure; and

(5) Separately, the total amount of such trust funds invested in each of the investments authorized by law and the amount of cash on hand not invested which statement actually show the financial condition of the trust funds.

(f) Two (2) or more funeral establishments who utilize a common trust fund to hold and administer payments received under pre-need contracts may cause the trustee of that common trust fund to file one (1) combined annual report regarding all such pre-need contracts, provided each funeral establishment's information is disclosed separately.

Notes

Cal. Code Regs. Tit. 16, § 1269

1. Amendment and renumbering of former Section 1261 filed 2-25-72; effective thirtieth day thereafter (Register 72, No. 9).
2. Amendment filed 2-11-75 as an emergency; effective upon filing. Certificate of Compliance included (Register 75, No. 7).
3. Amendment filed 6-17-77; effective thirtieth day thereafter (Register 77, No. 25).
4. Amendment filed 7-3-86; effective thirtieth day thereafter (Register 86, No. 27).
5. Amendment of subsections (a), (b), (c) and (f) filed 10-31-97; operative 11-30-97 (Register 97, No. 44).
6. Change without regulatory effect amending subsections (a), (c), (d) and (f) and amending NOTE filed 9-22-2011 pursuant to section 100, title 1, California Code of Regulations (Register 2011, No. 38).

Note: Authority cited: Sections 7602, 7606 and 7740, Business and Professions Code. Reference: Sections 7735, 7738, 7740 and 7740.5, Business and Professions Code.

1. Amendment and renumbering of former Section 1261 filed 2-25-72; effective thirtieth day thereafter (Register 72, No. 9).
2. Amendment filed 2-11-75 as an emergency; effective upon filing. Certificate of Compliance included (Register 75, No. 7).
3. Amendment filed 6-17-77; effective thirtieth day thereafter (Register 77, No. 25).
4. Amendment filed 7-3-86; effective thirtieth day thereafter (Register 86, No. 27).
5. Amendment of subsections (a), (b), (c) and (f) filed 10-31-97; operative 11-30-97 (Register 97, No. 44).
6. Change without regulatory effect amending subsections (a), (c), (d) and (f) and amending Note filed 9-22-2011 pursuant to section 100, title 1, California Code of Regulations (Register 2011, No. 38).