(1) Establishment of Account. Each preneed
dealer that has not established a trust fund account pursuant to Section
10-14-7 or
10-14-7.1 of the Act shall establish one or more preneed escrow accounts into which
deposits shall be made pursuant to Section
10-14-7 of the Act. Said accounts shall be either segregated (containing the deposits
required to be made as a result of a single transaction) or aggregated
(containing deposits required to be made as a result of multiple transactions).
In the event all services and merchandise under a contract have been provided
or funds for any merchandise or services have been refunded pursuant to the Act
and these Rules, and said funds were in a segregated account, the account may
be closed upon payment of funds from the account. In the event funds are
originally deposited into an aggregated account, they may subsequently be
deposited into a segregated account, provided the amount of funds deposited on
account of any transaction is not less than the amount which would be required
to be refunded pursuant to Section
10-14-17(a)(3)
or
10-14-17(a)(4)
of the Act and these Rules.
(2)
Funding through Insurance.
(a) In the event
that an insurance policy is opened for the purpose of funding preneed burial or
funeral services and is titled, either solely or jointly, in the name of a
registrant, or if the purchaser makes an irrevocable payable-upon death
designation in favor of the registrant, the registrant must establish and
maintain a record of each insurance policy and the funds allocated to such
policy. The insurance policy will be subject to the filing requirements of the
Act and the Rules and Regulations with regard to the account.
(b) In the event thatan Insurance Policyis
titled in the name of the customer only and no irrevocable payable-upon-death
designation is made, the funds will not be subject to the escrow requirements
of the Act. However, the cost of the insurance policy must be paid directly by
the customer to the insurance provider. If a registrant takes possession of or
accumulates funds for the purpose of purchasing a Insurance Policy on the
customer's behalf, this will render the transaction a preneed sale requiring
the registrant to hold the Insurance Policy in escrow as an asset of the
account and will be subject to the funding and filing requirements of the Act
and the Rules and Regulations.
(3) Funding through Certificates of Deposit
for Segregated Accounts.
(a) Dealer Owned
Certificates of Deposit. In the event that a Certificate of Deposit opened for
the purpose of funding preneed burial or funeral services is titled jointly in
the name of the registrant, in the registrant's federal employee identification
number (FEIN) or if the purchaser makes an irrevocable payable-upon death
designation in favor of the registrant, the registrant must establish and
maintain a preneed escrow account as required by the Act. The Certificate of
Deposit must be held in escrow as an asset of the account and will be subject
to the funding and filing requirements of the Act and the Rules and Regulations
with regard to the account.
(b)
Customer Owned Certificates of Deposit. In the event thata Certificate of
Depositis titled in the name of the customer only and no irrevocable
payable-upon-death designation is made, the funds will not be subject to the
escrow requirements of the Act. However, the cost of the Certificate of Deposit
must be paid directly by the customer to the financial institution. If a
registrant takes possession of or accumulates funds for the purpose of
purchasing a Certificate of Deposit on the customer's behalf or if a registrant
takes possession of a Certificate of Deposit, which by its terms is payable to
the bearer rather than to the order of the customer, this will render the
transaction a preneed sale requiring the registrant to hold the Certificate of
Deposit in escrow as an asset of the account and will be subject to the funding
and filing requirements of the Act and the Rules and Regulations.
(c) Transfer of Funds. No less than ten (10)
days prior to transfer of escrow funds, the registrant shall file a notice with
the Office of the Secretary of Statecontaining the following:
1. The name, location, mailing address, and
telephone number of the registrant's principal business location in Georgia,
together with any trade names associated with each location;
2. If transferring funds between one or more
accounts within the same depository, the names of the accounts and account
numbers being transferred. If transferring funds from one depository to
another, the name, address, location, and telephone number of the new
depository and the names of the accounts and account numbers being transferred
to the new depository;
3. A dated
and notarized signature of the individual duly authorized to sign the notice
filing, including the signatory's printed name and title. If the cemetery is
incorporated, the president or authorized individual shall sign;
Within thirty (30) days after transferring funds from one
depository to another, the former depository shall submit to the Secretary of
State verification listing each certificate of deposit held in escrow as of the
date of closing of the preneed escrow account(s); and
Within thirty (30) days after transferring funds from one
depository to another, the new depository shall submit to the Secretary of
State verification listing each certificate of deposit to be held in escrow as
of the date of opening of the new preneed escrow account(s).
(4) Depositories.
(a) In addition to those depositories allowed
in Section
10-14-7(c) of the Act, the preneed escrow account may
be established and maintained with an insurance company which has an A. M. Best
rating of B+ or better and is licensed and in good standing with the Georgia
Insurance Commissioner.
(b) Any
other financial institution not specifically noted in this Rule or the Act as
an authorized depository may petition the Secretary of State for approval. The
Secretary of State may approve such institution as a depository if it
demonstrates to the Secretary of State its financial soundness and
responsibility and complies with the other requirements of this Rule.
(c) No less than ten (10) days prior to
moving a preneed escrow account from one depository to another, the preneed
dealer required to establish and maintain a preneed escrow account pursuant to
Section
10-14-7 of the Act shall file a notice with the Office of the Secretary of State
containing the following:
1. The name,
location, mailing address, and telephone number of the registrant's principal
business location in Georgia, together with any trade names associated with
each location;
2. The name,
address, location, and telephone number of the new depository and the names of
the accounts and account numbers being transferred to the new depository;
and
3. A dated and notarized
signature of the individual duly authorized to sign the notice filing,
including the signatory's printed name and title. If the cemetery is
incorporated, the president or authorized individual shall sign.
(d) Within thirty days after
moving a preneed escrow account from one depository to another, the former
depository shall submit certification to the Office of the Secretary of State
showing the actual account balances for the preneed escrow account as of the
date of closing of the preneed escrow account.
(e) Within thirty days after moving a preneed
escrow account from one depository to another, the new depository shall submit
written verification to the Office of the Secretary of State showing the actual
account balances for the preneed escrow account as of the date of opening of
the new preneed escrow account.
(5) Escrow Agent.
(a) The following persons may act as the
escrow agent of the preneed escrow account:
1. A bank incorporated pursuant to Official
Code of Georgia Annotated Section
7-1-390, et
seq., as now or hereafter amended, and located in this state and
authorized to exercise and validly exercising the powers of a fiduciary
pursuant to Article 2, Chapter 1 of Title 7 of the Official Code of Georgia
Annotated, as now or hereafter amended;
2. A building and loan or savings and loan
association incorporated pursuant to Official Code of Georgia Annotated Section
7-1-770, et
seq., as now or hereafter amended, and located in this state and
authorized to exercise and validly exercising the powers of a fiduciary
pursuant to Article 7, Chapter 1 of Title 7 of the Official Code of Georgia
Annotated, as now or hereafter amended;
3. A trust company incorporated pursuant to
Official Code of Georgia Annotated Section
7-1-390, et
seq., as now or hereafter amended, and located in this state, and
authorized to exercise and validly exercising the powers of a fiduciary
pursuant to Article 2, Chapter 1 of Title 7 of the Official Code of Georgia
Annotated, as now or hereafter amended;
4. A national bank with an office located in
this state and authorized to act as a fiduciary under the laws of the United
States; and
5. A federally
chartered savings and loan association with an office located in this state and
authorized to act as a fiduciary under the laws of the United States.
(b) Any prospective escrow agent
not specifically described in this Rule may petition the Secretary of State for
approval.
(c) No less than ten (10)
days prior to any change or substitution of the escrow agent of a preneed
escrow account, the preneed dealer required to establish and maintain a preneed
escrow account pursuant to Section
10-14-7 of the Act shall file a notice with the Office of the Secretary of State
containing the following:
1. The name,
location, mailing address, and telephone number of the registrant's principal
business location in Georgia, together with any trade names associated with
each location;
2. The name,
telephone number and address, including city, state and zip code, of the new
escrow agent;
3. A copy of the
preneed escrow agreement executed by the registrant and accepted by the new
escrow agent, and evidence satisfactory to the Secretary of State of the
deposit into such account of the amounts required under Section 10-16-7 of the
Act, the preneed escrow agreement being conditioned only upon receipt by the
Secretary of State of the notice required by this Rule;
4. The name, address, location, and telephone
number of the preneed escrow account depository or depositories, the names of
the accounts, and the account numbers;
5. A dated and notarized signature of the
individual duly authorized to sign the notice filing, including the signatory's
printed name and title. If the cemetery is incorporated, the president or
authorized individual shall sign.
(d) Within thirty days after any change or
substitution of the escrow agent of a preneed escrow account, the prior escrow
agent shall submit to the Office of the Secretary of State the following:
1. The yearly financial report set forth in
Section
10-14-7(h) of the Act calculated based on the
year-to-date with respect to the preneed escrow account; and
2. Written certification of the amount of
funds transferred to the new escrow agent.
(e) Within thirty days after any change or
substitution of the escrow agent of a preneed escrow account, the new escrow
agent shall submit to the Office of the Secretary of State verification of the
funds received.
(6) If
amounts received pursuant to Section
10-14-7 of the Act are deposited in a preneed escrow account which bears interest, a
sum not less than the lesser of 10 percent of the escrowed amount or one-half
of the interest earned as of the date of release may be retained by the preneed
dealer as an administrative fee for reimbursement of the preneed dealer for
costs. The remaining interest shall be retained in the account with the
principal and shall be held, accounted for and transferred in the same manner
as the principal amount to assure delivery of the same quality of service and
merchandise for which the preneed contract was made.
(7) Conversion of Preneed Escrow Account to
Trust
(a) A preneed dealer that established
one or more preneed escrow accounts into which deposits were made pursuant to
Section
10-14-7 of the Act may transfer one or more existing preneed escrow accounts into a
preneed trust account pursuant to Sections
10-14-7 or
10-14-7.1 of the Act, as applicable.
(b) No
less than ten (10) days prior to transferring a preneed escrow account to a
preneed trust account, the preneed dealer required to establish and maintain
such account pursuant to Section
10-14-7 or
10-14-7.11 shall file a notice with the Office of the Secretary of State containing the
following:
1. The name, location, mailing
address, and telephone number of the registrant's principal business location
in Georgia, together with any trade names associated with each
location;
2. The name, telephone
number and address, including city, state and zip code, of the new trustee of
the preneed trust fund;
3. A copy
of the preneed trust fund agreement executed by the registrant and accepted by
the new trustee;
4. The names of
the accounts and account numbers being transferred from the preneed escrow
account.
5. The name, address,
location, and telephone number of the preneed trust fund depository or
depositories, the names of the trust accounts, and the trust account
numbers;
6. A dated and notarized
signature of the individual duly authorized to sign the notice filing,
including the signatory's printed name and title. If the cemetery is
incorporated, the president or authorized individual shall sign; and
7. If the person signing did not prepare the
notice filing, the printed name, signature, and title of the person who
prepared the notice filing is required.
(c) Within thirty days after transferring a
preneed escrow account to a preneed trust account, the former escrow agent
shall submit to the Office of the Secretary of State:
1. The yearly financial report set forth in
Section
10-14-7(h) of the Act calculated based on the
year-to-date with respect to the preneed account(s); and
2. Written certification showing the account
balances for the escrow account as of the date of closure of the preneed escrow
account;
(d) Within
thirty days after transferring a preneed escrow account to a preneed trust
account, the the new depository shall submit to the Office of the Secretary of
State verification showing the account balances for the preneed trust as of the
date of opening of the new preneed trust;
Notes
Ga. Comp. R.
& Regs. R. 590-3-4-.01
O.C.G.A. ยงยง
10-14-3.1 and
10-14-14.
Original Rule entitled
"Preneed Escrow Accounts" was filed as Emergency Rule 590-3-4-0.11-.01 on
July 7, 1983; effective
July 1, 1983, the date of
adoption, to remain in effect for 120 days or until the effective date of a
permanent Rule covering the same subject matter is adopted, as specified by the
Agency.
Amended:
Permanent Rule of the same title adopted. Filed September 9, 1983; effective
October 5, 1983, as specified by
the Agency.
Amended:
Filed December 20, 1988; effective
January 9, 1989.
Repealed:
New Rule, same title held in Reserve. F. July 26,
2000; eff. August 15,
2000.
Amended: New
Rule of same title adopted. F. Jan 17,
2002; eff. February 6,
2002.
Repealed:
New Rule of same title adopted. F. May 19,
2005; eff. June 8,
2005.
Amended: F.
May 21, 2013; eff.
June 10,
2013.