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BOARD OF FUNERAL AND CEMETERY SERVICES
69K – PART I
CHAPTER 69K-2 MEETINGS
69K-2.003 Other Official Board Business.
CHAPTER 69K-5 APPLICATION AND LICENSURE
69K-5.0015 Certificates of Authority.
69K-5.0016 Certificate of Authority; Financial Requirements.
69K-5.002 Application for Certificate of Authority.
69K-5.0021 Application for Certificate of Authority Branch Office License.
69K-5.0022 Applications for Transfer of a Certificate of Authority.
69K-5.0023 Temporary Certificates of Authority.
69K-5.0024 Remittances to the Regulatory Trust Fund.
69K-5.0025 Inactive Certificates of Authority.
69K-5.003 Application for Registration of a Preneed Sales Agent.
69K-5.0031 Definition of Good Standing With the Board of Funeral and Cemetery Services.
69K-5.0035 Termination of a Preneed Sales Agent.
69K-5.004 Procedures for Licensing a New Cemetery.
69K-5.006 Procedure for Licensing Transferred Cemeteries.
69K-5.007 Conversion Procedures.
69K-5.008 Request for Additional Information - Applications.
69K-5.009 Regulatory Standards for Evaluating Applications by the Board.
69K-5.010 List of Approved Forms; Incorporation.
CHAPTER 69K-6 PRACTICE AND PROCEDURES
69K-6.001 Grave Spaces; Definition Limited.
69K-6.002 Care and Maintenance of Existing Cemetery.
69K-6.003 Cemetery By-laws.
69K-6.004 Safekeeping of Records.
69K-6.005 Records.
69K-6.0051 Accounts Receivable Records.
69K-6.0052 Examination Work Papers.
69K-6.0054 Written Contracts Required.
69K-6.006 Inspection of Cemeteries.
69K-6.007 Criteria for Burial; Disinterment; Reinterment.
69K-6.008 Minimum Standards for Interment.
CHAPTER 69K-7 TRUSTS AND TRUST FUNDS
69K-7.001 Care and Maintenance Trust Fund Deposits.
69K-7.002 Percentage Deposits Required on Turf Tops, Lawn Crypts, Etc.
69K-7.005 Performance Bond - Mausoleums or Below-Ground Crypts.
69K-7.006 Wholesale Purchase Price.
69K-7.007 Merchandise Trust Funds - Status of Accounts.
69K-7.008 Preneed Trust Funds - Withdrawal of Income Earned Thereon.
69K-7.009 Reporting Requirements for Certificate of Authority Holders Filing an Initial
Application to Utilize a Letter of Credit or Surety Bond in Lieu of Trusting.
69K-7.010 Reporting Requirements for Certificate of Authority Holders
Utilizing a Surety Bond or Letter of Credit in Lieu of Trusting.
69K-7.011 Criteria for Filing a Letter of Credit in Lieu of Trusting.
69K-7.012 Criteria for Filing a Surety Bond in Lieu of Trusting.
69K-7.0125 Alternative Form of Security for Permanent Outer Burial Receptacle Manufacturers.
69K-7.013 Procedures for Filing Claim with the Board.
69K-7.015 Trust Agreements and Trustees.
69K-7.016 Duties and Powers of Trustee; Authorized Investments.
69K-7.017 Trust Fund Deposits; Funeral and Burial Services and Merchandise Preneed Contract Payments.
69K-7.020 Treatment of Trusts Under Chapters 497 and 639, F.S.
69K-7.022 Payment of Funds Upon Contract Fulfillment; Documentation Required.
CHAPTER 69K-8 CONTRACTS
69K-8.002 Cancellation of Contracts.
69K-8.003 Cancellation of Preneed Contracts; Reasonable Time Defined.
69K-8.004 Preneed Contracts; Miscellaneous Provisions.
69K-8.005 Preneed Contracts Funded by Life Insurance.
69K-8.006 Description of Merchandise on Preneed Contracts.
69K-8.007 Processing Fee.
CHAPTER 69K-9 ADVERTISING AND SOLICITATION
69K-9.001 Advertising.
69K-9.002 Residential Solicitations.
69K-9.003 Solicitation in Healthcare Facilities.
CHAPTER 69K-10 PRENEED FUNERAL CONTRACT CONSUMER PROTECTION TRUST FUND
69K-10.001 Preneed Funeral Contract Consumer Protection Trust Fund.
69K-10.002 Disbursement From the Preneed Funeral Contract Consumer Protection Trust Fund.
69K-10.003 Remittances to the Preneed Funeral Contract Consumer Protection Trust Fund.
CHAPTER 69K-11 DISCIPLINARY GUIDELINES
69K-11.001 Disciplinary Guidelines.
69K-11.002 Minor Violations; Notice of Non-Compliance.
69K-11.003 Citations.
CHAPTER 69K-12 MONUMENTS
69K-12.001 Installation of Monuments.
CHAPTER 69K-13 FLORIDA MAUSOLEUM CONSTRUCTION
69K-13.001 General Provisions.
69K-13.002 Definitions.
69K-13.003 General Construction Specifications.
69K-13.004 Additional Non-Building Code Standards for Mausoleum and Columbarium Construction
CHAPTER 69K-2 MEETINGS
69K-2.003 Other Official Board Business.
Pursuant to Section 497.109, Florida Statutes, other board business for purposes of this section is defined as:
(1) Meetings of committees, appointed by the Chairman of the Board;
(2) Probable Cause Panel meetings;
(3) Meetings of a Board member with Department staff or contractors of the Department, at the Department's request;
(4) Meetings attended by a board member where the attendance and participation of the board member at the meeting has been:
(a) Requested or approved by the Department; and
(b) The Board member's participation at the meeting is related to the Board's authority as set forth in Chapter 497, Florida Statutes.
(5) All activity of Board members, if authorized by the Board, when grading, proctoring, or reviewing examinations given by the Department;
(6) All participation in Board authorized meetings with professional associations of which the Board member is a member or invitee. This would include all meetings of national associations of registration Boards of which the Board is a member as well as Board authorized participation in meetings of national or professional organizations involved in educating, regulating or reviewing the profession over which the Board has statutory authority;
(7) Any and all other activities which are Board approved and which are necessary for Board members to attend to protect the public health, safety and welfare, through the regulation of which the Board has statutory authority.
Specific Authority 497.103 FS. Law Implemented 497.109 FS. History–New 4-25-94, Amended 6-16-94, Formerly 3F-2.003.
CHAPTER 69K-5 APPLICATION AND LICENSURE
69K-5.0015 Certificates of Authority.
(1) For purposes of a corporation qualifying for a certificate of authority pursuant to Section 497.405(3), F.S., by use of a corporate agent, such corporate agent must have common ownership in excess of 50% of the voting stock with the certificate of authority holder or applicant. If the applicant or certificate of authority holder is a not-for-profit corporation, then it must have common membership with any corporate agent through which it plans to sell preneed contracts in accordance with Section 497.405(3), F.S.
(2) Nothing herein shall prohibit a corporate certificateholder from selling preneed contracts through corporate subsidiaries or other entities with common ownership in excess of 50% of the voting stock or common membership in the case of not-for-profit corporations, so long as such entities are made known to the Board prior to any such preneed sales provided:
(a) The Board determines that the certificateholder will be legally liable for the acts and liabilities of such entity arising out of its sales; and
(b) The financial condition of the selling entity or subsidiary when viewed in the aggregate with the financial condition of the certificateholder does not impair the ability of the certificateholder to qualify for or retain a certificate of authority.
Specific Authority 497.103 FS. Law Implemented 497.405(3) FS. History–New 10-15-95, Formerly 3F-5.0015, Amended 1-12-04.
69K-5.0016 Certificate of Authority; Financial Requirements.
(1) A Certificate of Authority holder or applicant must meet and maintain the following requirements on an annual basis, demonstrating its ability to discharge its liabilities as they become due in the normal course of business and must have sufficient funds available to perform its obligation under its existing preneed contracts.
(2) A Certificate of Authority holder or applicant must submit its most recent year-end financial statements (including a balance sheet and income statement) with the Certificate of Authority application and annually thereafter as provided in Section 497.407(1), F.S. The financial statements must be prepared in accordance with generally accepted accounting principles (GAAP) as those principles have been defined by the Florida Board of Accountancy in Chapter 61H1-20, F.A.C. If the applicant does not have the minimum net worth as set forth in section three (3) or lacks sufficient liquid assets to satisfy current liabilities or does not
appear to have any substantial long-term assets, the Department shall request additional financial information concerning financial statements and the statement of cash flows.
(3) For the purpose of this rule, total preneed contracts will mean the total retail value of all outstanding preneed contracts. The Certificate of Authority holder's financial statements must demonstrate the following levels of net worth:
(a) Certificate of Authority holder that has total preneed contracts $100,000 or less-$10,000 net worth;
(b) Certificate of Authority holder that has total preneed contracts of $100,001 to $200,000-$20,000 net worth;
(c) Certificate of Authority holder that has total preneed contracts of $200,001 to $400,000-$40,000 net worth;
(d) Certificate of Authority holder that has total preneed contracts of $400,001 to 600,000-$60,000 net worth;
(e) Certificate of Authority holder that has total preneed contracts of $600,001 to $800,000-$80,000 net worth.
(f) Certificate of Authority holder that has total preneed contracts in excess of $800,000-$100,000 net worth.
(4) In the case of a Certificate of Authority holder or applicant offering preneed sales through a subsidiary agent, as provided in Rule 69K-5.0015, F.A.C., the Certificate of Authority holder or applicant shall execute a guarantee agreement with respect to any contract obligations resulting from preneed sales of such a selling agent.
(5) If the Certificate of Authority holder or applicant does not meet the financial requirements in subsection (3) above, the entity may voluntarily submit to the Board additional evidence or agree to additional oversight as to its meeting the requirements of subsection (1) above and as a condition of receiving and retaining a Certificate of Authority. Such additional evidence or oversight agreement shall include as appropriate:
(a) Agreement to submit monthly financial statements of the entity,
(b) Agreement to submit quarterly financial statements of the entity,
(c) Appraisal of the entity's property or broker's opinion of value of entity's assets,
(d) Credit report of the entity or its principal owners,
(e) Subordination of debt agreement from the entity's principal owners,
(f) Indemnification/subrogation agreement binding the entity and principal owners,
(g) Guarantee agreement for the entity from its principal owners,
(h) Written explanation of past financial activity,
(i) Submission of a twelve month projected business plan which shall include:
1. Statement of cash flows,
2. Proforma income statement with sources of revenue identified, and
3. Marketing initiatives.
(j) Submission of previous Department examination reports,
(k) 100% voluntary trusting agreement by the entity,
(l) Provide a surety bond acceptable to the Department and the Board.
Upon the Board's review of such additional information or agreements, submitted as stated above, the Board shall issue a Certificate of Authority if such information or agreement results in the Board determining that the applicant or certificateholder meets the requirements of Sections 497.405 and 497.407, F.S.
(6) As to all new applicants, this rule will become effective 20 days after filing with the Department of State. As to renewals of existing Certificates of Authority, this rule will become effective on April 1, 2001.
Specific Authority 497.103 FS. Law Implemented 497.405, 497.407 FS. History–New 5-21-95, Amended 12-7-98, 10-18-99, 12-12-00, 6-26-02, Formerly 3F-5.0016.
69K-5.002 Application for Certificate of Authority.
(1) Each entity desiring to obtain a certificate of authority shall apply to the Board by submitting the following:
(a) A completed application for Certificate of Authority, Form DFS-COA-1, effective 2-7-95, and a Historical Sketch, Form DFS-HistS 7/01, incorporated herein by reference, effective 6-26-02, and available by mail from the Department of Financial Services, Bureau of Funeral and Cemetery Services, 200 East Gaines Street, Tallahassee, Florida 32399-0361. The application and historical sketch must be completed and signed within thirty (30) days prior to receipt by the Board; and (b) An application fee of $500 which shall be the fee for the annual period beginning July 1 of each year or any part thereof;
(2) The Historical Sketch shall be completed by any person with power to direct the management or policies of the applicant.
(3) Request for Additional Information. Any request for additional information will be made by the Executive Director of the Board within thirty (30) days after receipt of the application by the Board. The additional information must be received by the Board within forty-five (45) days from the date of request. Failure to respond to the request within forty-five (45) days from the date of request shall be construed by the Board as grounds for denial for failure to complete the application, and the application shall be denied pursuant to Section 120.60(2), F.S.
(4) Upon approval of the application, a certificate of authority will be issued for the remainder of the period.
(5) For purpose of Section 497.407(5), F.S., an applicant's principals (including directors, officers, stockholders owning more than 10% of the voting stock of the applicant, and other persons who can direct the management of the applicant) shall appear to be of good moral character if they:
(a) Have never been convicted of, or plead guilty to, a crime involving fraud, perjury, embezzlement, tax evasion, or other crime of moral turpitude;
(b) Have never filed false information with any governmental agency; and
(c) Have never demonstrated any act or nature that constitutes a lack of honesty or financial responsibility. However, such act or conviction shall not create an irrebuttable presumption that a person is not of good moral character. The Board shall take into consideration evidence of such person's efforts at rehabilitation and law abiding behavior during the three (3) years preceding the filing of the application.
Specific Authority 497.103, 497.407(1) FS. Law Implemented 497.405, 497.407 FS. History–New 4-25-94, Amended 2-7-95, 12-12-00, 6-26-02, Formerly 3F-5.002.
69K-5.0021 Application for Certificate of Authority Branch Office License.
(1) Every Certificate of Authority holder that is part of a common business enterprise and elects to operate under a different name shall apply to the Board for a license to operate a branch office by submitting the following:
(a) A completed Application for Certificate of Authority Branch Office Registration, Form DFS-COAB-12/00, effective 9-18-01, which is hereby incorporated by reference and available from the Department of Financial Services, Bureau of Funeral and Cemetery Services, 200 East Gaines Street, Tallahassee, Florida 32399-0361. The application must be completed and signed within thirty (30) days of receipt by the Board; and
(b) An application fee of $150 which shall be the fee for the annual period beginning July 1 of each year or any part thereof.
(2) A branch office shall be defined for purposes of this rule to be any location at which the certificate holder sells, or offers for sale, funeral or cemetery goods or services on a preneed basis in a name different from the name of the common business enterprise. Location identifiers shall not constitute a different name. The branch office may be the same business entity, a qualified corporate agent, corporate subsidiary or other entity as defined in subsection 69K-5.0015(2), F.A.C.
(3) For the purposes of this rule, the name of the common business enterprise shall be considered to be that listed as the entity registered as a Certificate of Authority Holder.
(4) “Operate under a different name” shall be defined for the purposes of this rule as the manner in which the certificate holder extends itself to the public at any given location. This includes but is not limited to the name of the business as listed on business signs, in advertisements, and on contracts entered into with purchasers either on an at need or preneed basis. The name of the entity listed as “seller” on a preneed contract shall not be the sole determination of the name in which the entity operates.
(5) Request for additional information. Any request for additional information will be made by the Executive Director of the Board within thirty (30) days after receipt of the application by the Board. The additional information must be received by the Board within forty-five (45) days from the date of request. Failure to respond to the request shall be construed by the Board as grounds for denial for failure to complete the application, and the application shall be denied pursuant to Section 120.60(2), F.S.
(6) Withdrawal of Application. An applicant, can request withdrawal of an application prior to a determination of the application being made by the Board of Funeral and Cemetery Services by submitting a written request that the application be withdrawn.
(7) Refunds. If the application is withdrawn or denied, the application fee is non-refundable.
(8) Upon approval of the application, a certificate of authority branch office license will be issued for the remainder of the annual license period ending June 30 of each year.
Specific Authority 497.103 FS. Law Implemented 497.103, 497.407(4) FS. History–New 6-5-97, Amended 12-12-00, 9-18-01, Formerly 3F-5.0021.
69K-5.0022 Applications for Transfer of a Certificate of Authority.
(1) When an entity which holds a certificate of authority changes ownership it shall cease operating under the certificate of authority. The successor owner may apply to transfer the COA and obtain a temporary certificate of authority to continue to operate. To be eligible to transfer a certificate of authority the successor entity must apply for a transfer within thirty (30) days of the change in ownership by submitting the following to the Board of Funeral and Cemetery Services:
(a) A completed application for Transfer of a Certificate of Authority, Form DFS-COAT1, effective 5-13-97, which is hereby incorporated by reference and available by mail from the Department of Financial Services, Bureau of Funeral and Cemetery Services, 200 East Gaines Street, Tallahassee, Florida 32399-0361, and, for each principal, a Historical Sketch, as referenced in Rule 69K-5.002, F.A.C. The application and historical sketch(s) must be completed and signed within thirty (30) days prior to receipt by the Board;
(b) A non-refundable application fee of $100, which shall be the fee for the remainder of the annual license period in which the application is approved; and
(c) Financial statements documenting compliance with Rule 69K-5.0016, F.A.C.;
(2) The Historical Sketch shall be completed by any person with power to direct the management or policies of the applicant.
(3) For the purpose of Section 497.407(5), F.S., an applicant's principals (including directors, officers, stockholders owning more than 10% of the voting stock of the applicant, and other persons who can direct the management of the applicant) shall appear to be of good moral character if they:
(a) Have never been convicted of, or plead guilty to, a crime involving fraud, perjury, embezzlement, tax evasion, or other crime of moral turpitude;
(b) Have never filed false information with any governmental agency; and
(c) Have never demonstrated any act or nature that constitutes a lack of honesty or financial responsibility. However such act or conviction shall not create an irrefutable presumption that a person is not of good moral character. The Board shall take into consideration evidence of such person's efforts at rehabilitation and law abiding behavior during the three (3) years preceding the filing of the application.
(4) Request for Additional Information. Any request for additional information will be made by the Executive Director of the Board within thirty (30) days after receipt of the application by the Board. The additional information must be received by the Board within forty-five (45) days from the date of request. Failure to respond to the request within forty-five (45) days from the date of the request shall be construed by the Board as grounds for denial for failure to complete the application, and the application shall be denied pursuant to Section 120.60(2), F.S.
(5) Withdrawal of Application. An applicant may request withdrawal of an application prior to a determination of the application being made by the Board by submitting a written request that the application be withdrawn.
(6) Refunds. If the application is withdrawn or denied, the application fee is non-refundable.
(7) Upon approval of the application, a letter informing the applicant of the Board's intent to approve the application will be sent to the applicant's mailing address as indicated on the application. Upon receipt of the original COA license issued to the former owners, notification that the change in ownership or control has been finalized and the effective date of closing, a certificate of authority will be issued effective the later of the date of closing or the date of notice of intent to approve, for the remainder of the annual license period. Failure to provide required documentation prior to the expiration of the temporary certificate of authority shall result in denial of the application.
(8) If an application for Transfer of a Certificate of Authority is not filed within the thirty (30) days after the change in entity, the new entity shall not be eligible to file such application. The entity shall be required to file an initial application for Certificate of Authority pursuant to Rule 69K-5.002, F.A.C. Any application for Transfer of a Certificate of Authority which is not timely filed shall be denied by the Board.
Specific Authority 497.103(1) FS. Law Implemented 497.407(11) FS. History–New 5-13-97, Amended 6-26-02, Formerly 3F-5.0022.
69K-5.0023 Temporary Certificates of Authority.
(1) Upon receipt of a completed application for Transfer of a Certificate of Authority including the required documentation of eligibility for a temporary certificate, the Executive Director of the Board of Funeral and Cemetery Services, may grant a temporary certificate of authority upon a determination by the Executive Director that issuance of such temporary certificate is in the best interest of consumer protection and that the applicant has met the following criteria:
(a) The entity to be acquired holds a current certificate of authority issued pursuant to Chapter 497, F.S.;
(b) Applicant has met the financial requirements of Rule 69K-5.0016, F.A.C.;
(c) There are no pending administrative actions taken either by the Board or the Department against either entity.
(2) The temporary certificate of authority will be effective upon receipt by the Department of documentation that the above criteria have been met and will continue until the date of the next Board meeting unless renewed by the Board.
(3) Any pending application for a preneed sales agent to register with an entity which has received a temporary certificate shall be considered active as of the later of the effective day of the temporary certificate or the date of receipt of an otherwise complete application for registration as a preneed sales agent.
Specific Authority 497.103(1) FS. Law Implemented 497.407(11) FS. History–New 5-13-97, Formerly 3F-5.0023.
69K-5.0024 Remittances to the Regulatory Trust Fund.
The amounts required to be remitted by a certificateholder to the Regulatory Trust Fund, pursuant to the provisions of Section 497.407(12), F.S., shall be determined in accordance with the following criteria:
(1) A preneed contract or arrangement shall be deemed to be written within the meaning of Section 497.407, F.S., when a preneed contract or arrangement is executed by both the purchaser and the certificateholder or its agent. A remittance for a preneed contract or arrangement dated within a specific quarter shall be submitted in the report for such quarter.
(2) Beginning with contracts written July 1, 1997, each certificateholder shall remit to the Regulatory Trust Fund of the Department of Financial Services a fee of $4.00 for each preneed contract written; regardless of any payments made by the purchaser.
(3) Assessments required to be remitted pursuant to Section 497.407, F.S., shall not be payable from funds subject to the trust provisions of Sections 497.417 and 497.429, F.S., nor shall they be included in a preneed contract and passed on to the purchaser.
(4) Contracts canceled within thirty days of execution as provided by Section 497.407, F.S., shall not be counted as a contract sold for purposes of determining the amount to be remitted to the Regulatory Trust Fund.
(5) If a contract is canceled after thirty days of execution, the certificateholder shall not be entitled to credit the remittance for that contract against future remittances.
(6) All remittances shall be sent with the Department of Financial Services Regulatory Trust Fund Remittance Form. This form, DFS-RTF-1, effective 5-13-97, which is hereby incorporated by reference, and shall be available from the Department of Financial Services, Board of Funeral and Cemetery Services, 200 East Gaines Street, Tallahassee, Florida 32399-0316. Checks should be made payable to the Department of Financial Services. Remittances should be submitted to the board office within 60 days following a calendar quarter.
(7) No certificateholder is entitled to a refund of its contribution to the Regulatory Trust Fund. A certificateholder who overpays the amount due to the Regulatory Trust Fund may make the necessary adjustments in future reports, provided the adjustment is adequately disclosed and includes a reasonable explanation therefor.
(8) It is the responsibility of the certificateholder to ensure the correct report and remittance is made.
Specific Authority 497.103, 497.407 FS. Law Implemented 497.407 FS. History–New 5-13-97, Amended 12-12-00, Formerly 3F-5.0024.
69K-5.0025 Inactive Certificates of Authority.
(1) A certificateholder shall be considered inactive upon acceptance by the Board of the surrender of the certificate of authority, if the certificateholder fails to submit a renewal application and fees or upon the final expiration of the certificate of authority after denial of renewal by the Board.
(2) Upon becoming inactive, the certificateholder shall do the following:
(a) Cease the sale of preneed contracts.
(b) Deposit into trust 100% of the funds collected as payments or made on outstanding preneed contracts.
(c) Notify the Department of the certificateholder's compliance with this rule.
(3) The licenses of all preneed sales agents registered with an inactive certificateholder shall expire immediately upon the certificateholder becoming inactive.
(4) If an inactive certificateholder intends to cease providing at-need services, the inactive certificateholder shall, prior to ending such services, assign all preneed contracts to a certificateholder for fulfillment. The Department and all preneed purchasers shall be notified of the assignment.
(5) As provided by Section 497.436(7), F.S., in order for the Board to exercise its jurisdiction as provided therein, an inactive certificateholder shall, at the same time as is required for renewing certificateholders, submit a certificate of authority renewal form and financial statement. Additionally, an inactive certificateholder shall continue to be subject to examination by the Department until all outstanding preneed contracts have been fulfilled or assigned to another certificateholder.
(6) To ensure compliance with this rule, the Department is authorized to request additional information as needed, concerning trust reports, bank statements, workpapers and statements of accounts receivable.
Specific Authority 497.103(1) FS. Law Implemented 497.436(7), 497.437 FS. History–New 8-12-02, Formerly 3F-5.0025.
69K-5.003 Application for Registration of a Preneed Sales Agent.
(1) Each person desiring to obtain registration as a preneed sales agent for a certificateholder shall apply to the Board by submitting the following by certified mail:
(a) A completed application for Registration of a Preneed Sales Agent, Form DFS-PNS-1, effective 4-25-94, which is hereby incorporated by reference and available by mail from the Department of Financial Services, 200 East Gaines Street, Tallahassee, Florida 32399-0361. The registration must be completed and signed by an authorized representative of the certificateholder within thirty (30) days prior to receipt by the Department;
(b) A non-refundable application fee of $100 which shall be the fee for the biennial period beginning March 1 of each even numbered year or any part thereof.
(2) Request for Additional Information. Any request for additional information will be made by the Department within thirty (30) days after receipt of the application by the Department. The additional information must be received by the Department within forty-five (45) days from the date of request. Failure to respond to the request for additional information within forty-five (45) days from the date of request shall be construed by the Board to be grounds for denial of the application for failure to complete the application, and the application shall be denied pursuant to Section 120.60(2), F.S.
(3) Amendment of Registration. An applicant may amend the registration as to those factors generally within the control or selection of the applicant, once, as a matter of course, at any time within thirty (30) days from its receipt for filing. Otherwise, the registration may be amended only with prior permission from the Department. Any unapproved requests to make changes filed at any time after the registration has been received shall be deemed by the Board to be grounds for denial, and a new registration, accompanied by the appropriate fee, shall be required.
(4) Withdrawal of Registration. An applicant, or sponsoring certificateholder, can request withdrawal of a registration prior to a determination of the application being made by the Board of Funeral and Cemetery Services by submitting a written request that the registration be withdrawn.
(5) Denial of Registration. The Department shall notify the applicant at the address of the sponsoring certificateholder of the Board's intent to deny the application. Upon receipt of the notification, the applicant shall cease conducting business as a preneed sales agent. Upon receipt of the notification, the certificateholder will use due diligence to stop the preneed sales agent from conducting business as a preneed sales agent on behalf of the certificateholder. If a request for a hearing has not been received within twenty-six (26) days of the date of the notification, the application shall be denied.
(6) Refunds. If the registration is withdrawn or denied, the application fee is non-refundable.
(7) Upon approval of the application, a registration will be issued for the remainder of the biennial registration period effective the later of the date the application was received or the date the last deficiency on the application was resolved.
(8) A separate registration is required for each different certificateholder represented by the applicant.
Specific Authority 497.103, 497.439(7) FS. Law Implemented 497.439 FS. History–New 4-25-94, Formerly 3F-5.003.
69K-5.0031 Definition of Good Standing With the Board of Funeral and Cemetery Services.
(1) A person applying for registration pursuant to Section 497.439, F.S., shall be deemed to be in good standing with the Board of Funeral and Cemetery Services if:
(a) The individual has not, at the time of application, been penalized for and is not under investigation for one or more of the following disciplinary actions by a licensing authority of any state, territory or country that is involved in regulating the cemetery or funeral home industries:
1. Revocation of a license or registration.
2. Suspension of a license or registration.
3. Probation of a license or registration for an offense involving fraud, dishonest dealing, or an act of moral turpitude.
(b) The individual has not been convicted or found guilty of, or entered a plea of nolo contendere to, regardless of adjudication, any felony or misdemeanor related to any activity regulated by Chapters 470 and 497, F.S., or their predecessors or another crime involving fraud, dishonest dealing, or an act of moral turpitude. Nevertheless, no applicant who has any felony or misdemeanor conviction that relates to any activity regulated by Chapter 497, F.S., shall be eligible for registration.
(c) The individual has not been disciplined by any governmental agency for an act that relates to fraud, dishonest dealing, or an act of moral turpitude.
(2) Except as otherwise provided in paragraph (1)(b) above, violations of the foregoing shall not be deemed to be a bar to registration if any of the following are shown:
(a) Sufficient time has elapsed since the prior disciplinary action, criminal conviction or guilty plea such that the applicant is substantially unlikely to pose any threat to the public through the ordinary course of his duties as a preneed sales agent.
(b) Steps taken by the applicant to insure the non-occurrence of similar actions in the future.
(c) Restitution of any damages suffered by any client or victim of the applicant's actions.
(d) The lack of any recurrent actions by the applicant.
(e) The action was the result of negligence rather than any wrongful intent.
Specific Authority 497.103 FS. Law Implemented 497.439(6)(b) FS. History–New 4-23-95, Formerly 3F-5.0031.
69K-5.0035 Termination of a Preneed Sales Agent.
Within thirty (30) days of any termination of any registered preneed sales agent, the certificateholder shall give written notice to the Department. The notice may be submitted in writing, electronically, or vial facimile, and shall contain:
(1) The effective date of termination, the name, and registration number of the preneed sales agent;
(2) The name, license number, and business location of the certificateholder where the preneed sales agent was working;
(3) Signature of an authorized agent of the certificateholder.
Specific Authority 497.103 FS. Law Implemented 497.439(9) FS. History–New 5-29-94, Formerly 3F-5.0035, Amended 1-12-04.
69K-5.004 Procedures for Licensing a New Cemetery.
(1) Any legal entity wishing to establish a cemetery should review the requirements of the Florida Cemetery Act (Chapter 497, F.S.) and applicable rules and regulations before filing a formal application for permission to start a cemetery in the State of Florida. The following should then be completed and submitted to the Board:
(a) Application To Organize A New Cemetery Company, Form DFS-CEMN 7/01, incorporated herein by reference, effective 6-26-02;
(b) Historical Sketch, as referenced in Rule 69K-5.002, F.A.C.;
(c) Current Financial Statement of each proponent, Form DFS-F-32 10/91, effective October 23, 1991, which is hereby incorporated by reference;
(d) Creation of a legal entity to conduct the cemetery business;
(e) The proposed financial structure of the cemetery;
(f) A map showing location of proposed site and other cemeteries located in the area;
(g) A non-refundable application fee in the amount of $5,000. Upon receipt of the above-completed documents and application fee, the Department will conduct an investigation;
(h) Legal description of the property including a statement as to the number of acres contained therein;
(i) Development plans for proposed cemetery;
(j) Written approval from the governing zoning authority. If no zoning board for such authority exists, written approval must be obtained from a majority of the adjacent property owners;
(k) Shown compliance with Rule 69K-5.009, F.A.C., Regulatory Standards for Evaluating Applications by the Board.
(2) If the application is approved, the following will be required:
(a) Establishment of a “Care and Maintenance Trust Fund”;
(b) Certification from Trustee of deposit of $50,000 in “Care and Maintenance Trust Fund”;
(c) Designation of a general manager;
(d) Certification from an Attorney or Title Company that the proposed acreage is free and clear from any financial
encumbrances and submit a copy of deed showing notice required by Section 497.201, F.S., has been recorded;
(e) Full development, ready for burials, of not less than two acres, including, but not limited to, a paved road from a public roadway to said developed section;
(f) Completion of an Application to Transact Cemetery Business, Form DFS-CEM 1/96, Rev. 7/01, incorporated herein by reference, effective 6-26-02, and a license fee of $250, refundable if license is not issued;
(g) Upon completion of the above requirements and on investigation of the cemetery grounds by the Department, a cemetery license will be issued to transact business for that year.
(h) Denial of Application. If the Board intends to deny an application, the provisions of Chapter 120, F.S., shall prevail. If the application is denied, written notice thereof will be given to the applicant and upon written request for a hearing thereon received within 21 days after receipt of notice of denial, a hearing may be held. Such hearing will be conducted in accordance with Chapter 120, F.S., and Chapter 28-107, F.A.C., of the Uniform Rules of Procedure.
(3) All forms herein are available by mail from The Department of Financial Services, 200 East Gaines Street, Tallahassee, Florida 32399-0361.
Specific Authority 497.103 FS. Law Implemented 497.201, 497.237, 497.245, 497.337 FS. History–New 9-29-75, Amended 6-21-77, 6-21-78, 11-2-78, 1-27-81, Formerly 3D-30.15, Amended 10-23-91, Formerly 3D-30.015, Amended 12-8-98, 6-26-02, Formerly 3F-5.004, Amended 1-12-04.
69K-5.006 Procedure for Licensing Transferred Cemeteries.
(1) Application. When a person, a group of persons or a corporation proposes to purchase or acquire control of an existing cemetery company either by purchasing the outstanding capital stock of any cemetery company, or the interest of the owner or owners, and thereby to change the control of said cemetery company, such person shall file an Application For Authority To Acquire Control Of An Existing Cemetery Company, Form DFS-F-35, effective September 18, 2001, and hereby incorporated by reference and available from the Department of Financial Services, Board of Funeral and Cemetery Services, 200 East Gaines Street, Tallahassee, Florida 32399-0361. This application shall be accompanied by a non-refundable application fee of $5,000.
(2) Supporting Data. The following items shall accompany the above application:
(a) Copy of sales agreement;
(b) Copy of certificate of good standing, if applicable;
(c) Historical Sketch of each proponent, as referenced in Rule 69K-5.002, F.A.C.
(d) Current Financial Statement, Form DFS-F-32, effective October 23, 1991, which is hereby incorporated by reference, of each proponent;
(e) Completion of an Application To Transact Cemetery Business, Form CEM 1/96 REV. 7/01, effective September 28, 2003, which is incorporated by reference in Rule 69K-5.010, F.A.C. Form DFS-CEM 1/96 Rev. 7/01 shall be accompanied by a license fee based on the cemeteries' last fiscal year sales pursuant to Section 497.213, F.S.;
(f) Existing license must be returned to the Board for cancellation. No license is transferable or assignable;
(g) A map showing land platted for burials.
(3) Conditions. Any deficits must be cleared by present owner to trust funds or a written statement waiving a final examination must be signed by the purchaser; thereby making him responsible for any deficits to the trust fund. If a new trustee is appointed, a copy of the trust agreement must be approved by the Department before the trust fund is transferred.
(4) Investigation. The Department shall investigate the following conditions:
(a) Character, reputation, financial standing, and business qualifications of the new proponents;
(b) Legal entity;
(c) Capitalization;
(d) Whether money is due any of the trust funds, unless waived;
(e) Current financial statement for each proponent;
(f) Biographical sketch for each proponent.
(5) Issuance of license. If the department finds that the proposed owner or owners of the existing cemetery company has in good faith complied with all lawful requirements, it shall issue a new cemetery license.
Specific Authority 497.103 FS. Law Implemented 497.201(1), 497.209 FS. History–New 9-29-75, Amended 11-2-78, 1-27-81, Formerly 3D-30.17, Amended 10-23-91, Formerly 3D-30.017, Amended 9-18-01, 6-26-02, Formerly 3F-5.006, Amended 1-12-04.
69K-5.007 Conversion Procedures.
When a municipal, church owned, fraternal or community and non-profit association cemetery converts to a cemetery company as defined in Section 497.005, F.S., then said cemetery shall file the following with the department:
(1) An Application To Organize A New Cemetery Company, Form DFS-F-34, effective October 23, 1991, which is hereby incorporated by reference. This application shall be accompanied by a non-refundable application fee of $5,000.
(2) A map showing the location of cemetery.
(3) A map showing land that has been platted for burials.
(4) Legal description of the property including a statement as to the number of acres contained therein.
(5) Establish and maintain a care and maintenance trust fund. The initial deposit for establishment of this trust fund shall be an amount equal to $10.00 per space for all spaces either previously sold or contracted for sale in said cemetery at the time of conversion or $25,000 whichever sum is greater.
(6) Copy of sales agreement.
(7) Historical Sketch of each proponent, as referenced in Rule 69K-5.002, F.A.C.
(8) Current Financial Statement, Form DFS-F-32, effective October 23, 1991, which is hereby incorporated by reference, of each proponent.
(9) Completion of an Application To Transact Cemetery Business, Form DFS-F-33, effective October 23, 1991, which is hereby incorporated by reference. Form DFS-F-33 shall be accompanied by a license fee based on the cemetery's last fiscal year sales pursuant to Section 497.213, F.S.
(10) Investigation. The Department shall investigate the following conditions:
(a) Character, reputation, financial standing, business qualifications and motives of the proponents;
(b) Legal entity;
(c) Capitalization;
(d) Current financial statement of each proponent;
(e) Biographical sketch of each proponent.
(11) If the application is denied, written notice thereof will be given to the applicant and upon written request for a hearing thereon received within 21 days after receipt of notice of denial, a hearing may be held. Such hearing will be conducted in accordance with Chapter 120, F.S., and Chapter 28-107, F.A.C., of the Uniform Rules of Procedure.
(12) All forms herein are available by mail from The Department of Financial Services, Bureau of Funeral and Cemetery Services, 200 East Gaines Street, Tallahassee, Florida 32399-0361.
Specific Authority 497.103 FS. Law Implemented 497.201, 497.213 FS. History–New 9-29-75, Amended 1-27-81, Formerly 3D-30.19, Amended 10-23-91, Formerly 3D-30.019, Amended 6-26-02, Formerly 3F-5.007.
69K-5.008 Request for Additional Information - Applications.
Rules 69K-5.004, 69K-5.006, 69K-5.007 and 69K-5.009, F.A.C., provide methods, procedures and supporting documentation for the licensing of new cemeteries, transferred cemeteries and for conversion procedures. All information the applicant wants to present in order to support the application should be submitted with the original filing. The required exhibits in the application forms are not intended to limit the applicant's presentation of any of the requirements, but merely represent the minimum information to be filed. Additional information must be submitted within sixty (60) days after a request therefor if specifically requested by the department within thirty (30) days after receipt of the application. Failure to respond to such request within sixty (60) days after the date of the request will be construed by the department and the Board of Funeral and Cemetery Services as grounds for denial of an application in accordance with the provisions of Section 120.60(2), F.S., and the file shall be closed.
Should the file be closed pursuant to these provisions, the applicant shall be duly notified. (See subsections 3-3.012(1)(a) and (3), F.A.C.)
Specific Authority 497.103 FS. Law Implemented 120.60(2), 497.201(2)(a), 497.209 FS. History–New 12-22-81, Formerly 3D-30.29, 3D-30.029, Amended 6-26-02, Formerly 3F-5.008, Amended 1-12-04.
69K-5.009 Regulatory Standards for Evaluating Applications by the Board.
When an application for authority to organize and operate a new cemetery company is filed, it is the applicant's responsibility to meet the statutory criteria warranting the grant of authority. If, in the opinion of the Board, any one of the criteria as set forth in Section 497.201, F.S., which requires board review and approval has not been met and cannot be remedied by the applicant, the Department cannot approve the application.
The applicant shall submit information addressing the following:
(1) Capital structure.
(a) Capital should be adequate to enable the new cemetery to provide necessary services for cemeteries, including adequate service to the community and adequate care and maintenance of the cemetery.
(b) Capital shall be sufficient to purchase a cemetery site of no less than 15 contiguous acres in fee simple unencumbered; to develop at least two (2) acres for burial spaces including paved road from a public roadway; to purchase or lease adequate equipment for the operation and maintenance of the cemetery; and to build or lease suitable facilities to operate the cemetery.
(c) An applicant shall demonstrate that it has sufficient capital to sustain its operations until its first projected profitable year. Sufficient capital shall mean that the applicant is able to cover its cumulative losses until projected profitability; provided that, in no event may the tangible accounting net worth of the applicant be less than $50,000. The demonstration of sufficient capital shall be made by submittal of a reasonable business plan covering every year from inception up to and including its first projected year of profitability and providing:
1. Revenue expectations based on the applicant's projected sources of revenue and projected revenue including number of annual sales and average sales on a unit basis and a demographic analysis of the applicant's projected market which supports this revenue projection;
2. An analysis of the cost incurred to achieve the projected revenues including sales costs, product costs, delivery of service costs, financing of capital requirements cost, care and maintenance costs, the cost of perpetual care (including other sources of funds in the event of shortfalls in the perpetual care funds); and
3. Any information required by the Board and reasonably necessary for the Board to make a determination of the applicant's financial stability.
(2) Proposed executive officers, directors or principals.
(a) The proposed officers, directors or principals shall each submit an executed Historical Sketch, as referenced in Rule 69K-5.002, F.A.C., and shall have reputations evidencing honesty and integrity. They shall have employment and business histories demonstrating their responsibility in financial affairs. The fact that a proposed officer, director or principal has been adjudicated bankrupt or has filed for relief under the Federal Bankruptcy Act shall be considered a material factor in the evaluation of responsibility in financial affairs.
(b) At least one (1) of the proposed directors or principals, who is not also a proposed officer, shall have had substantial direct experience as an executive officer, director or principal of a cemetery or a certificate holder licensed pursuant to Section 497.405, F.S., within 3 years of the date of the application. If in the opinion of the Board the aggregate level of experience represented by the proposed board of directors or principals is not substantial, the Board shall require the addition of other outside directors or principals who have adequate experience.
(c) The proposed general manager shall have at least three (3) years of direct cemetery management experience within seven (7) years of the application as a general manager, director, regulator of a cemetery or similar position having an equivalent level of responsibility for a cemetery. The general manager must have a reputation evidencing honesty and integrity and an employment history demonstrating competent past experience. It is not necessary that the name of the general manager be submitted with the application. However, this individual must be named and have submitted an executed Historical Sketch, as referenced in Rule 69K-5.002, F.A.C., not later than ninety (90) days prior to applicant's intended opening date. The applicant may not open for business without prior approval of the general manager by the Department.
(d) Change of a director, chief executive officer, president, principal or general manager or the addition of any new directors, executive officers through the first two (2) years of operation shall also require approval of the Department and the Board.
(e) The Department shall conduct background investigations on the principals, general manager, executive officers, directors, and major shareholders. Any misrepresentation or omission of fact in an application by any person shall be cause for the Department or the Board to deny that person's participation in the application and to the extent such misrepresentation or omission of fact reflect upon their honesty and integrity shall be grounds for denial of the entire application.
Specific Authority 497.103 FS. Law Implemented 497.201 FS. History–New 7-22-97, Amended 6-26-02, Formerly 3F-5.009.
69K-5.010 List of Approved Forms; Incorporation.
The following forms used by the Board in its dealings with the public are listed as follows and are hereby adopted and incorporated by reference, and can be obtained from the Board office by writing to the Department of Financial Services, Bureau of Funeral and Cemetery Services, 200 East Gaines Street, Tallahassee, Florida 32399-0361, or by telephoning (850) 413-3039:
(1) DFS-COA-1 effective 9-28-03, entitled “Application for Certificate of Authority.”
(2) DFS-HistS 7/01 effective 9-28-03, entitled “Historical Sketch.”
(3) DFS-COAB – 12/00 effective 9-28-03, entitled “Application for Certificate of Authority Branch Office License.”
(4) DFS-COAT1 01/01 effective 9-28-03, entitled “Application for Transfer of a Certificate of Authority.”
(5) DFS-RTF-1 effective 9-28-03, entitled “Preneed Funeral Contract Regulatory Trust Fund Remittance.”
(6) DFS-PNS-1 Rev. 04/94 effective 9-28-03, entitled “Registration of a Preneed Sales Agent.”
(7) DFS-CEMN 7/01 effective 9-28-03, entitled “Application to Organize a New Cemetery Company.”
(8) DFS-F-32 10/91 effective 9-28-03, entitled “Financial Statement.”
(9) DFS-CEM 1/96 REV 7/01 effective 9-28-03, entitled “Application to Transact Cemetery Business.”
(10) DFS-F-35 01/01 effective 9-28-03, entitled “Application for Authority to Acquire Control of an Existing Cemetery Company.”
(11) DFS-BYLAW1 6/99 effective 9-28-03, entitled “Pamphlet for Cemetery By-Law Approval.”
(12) DFS-EW-1 1/99 effective 9-28-03, entitled “Examination Workpapers – Rule 69K-6.0052, F.A.C.”
(13) DFS-F-43 REV 9/99 effective 9-28-03, entitled “Performance Bond – Mausoleums or Below-Ground Crypts.”
(14) DFS-C-1 effective 9-28-03, entitled “Application to Use a Letter of Credit or Surety Bond.”
(15) DFS-C-2 REV 9/99 effective 9-28-03, entitled “Surety Bond.”
(16) DFS-C-3 3/91 effective 9-28-03, entitled “Letter of Credit/Surety Bond Claim Form.”
(17) DFS-TFR-1 5/94 effective 9-28-03, entitled “Preneed Funeral Contract Consumer Protection Trust Fund Remittance.”
(18) DFS-TFD-1 6/01 effective 9-28-03, entitled “Preneed Funeral Contract Consumer Protection Trust Fund Proof of Claim and Disbursement Request.”
Specific Authority 120.53(1)(b), 120.536, 120.54, 120.60(2), 497.003, 497.103, 497.105, 497.127, 497.201, 497.209, 497.213, 497.237, 497.245, 497.257, 497.301, 497.305, 497.309, 497.329, 497.337, 497.357, 497.405, 497.407, 497.413, 497.417, 497.419, 497.421, 497.425, 497.427, 497.429, 497.431, 497.439 FS. Law Implemented 497.103, 497.201, 497.209, 497.213, 497.237, 497.301, 497.337, 497.405, 497.407, 497.439, 497.245 FS. History–New 9-28-03, Formerly 3F-5.010.
CHAPTER 69K-6 PRACTICE AND PROCEDURES
69K-6.001 Grave Spaces; Definition Limited.
“Grave space,” according to the definition in Section 497.005(20), F.S., means a space of ground in a cemetery intended to be used for the interment in the ground of the remains of a deceased person. Said definition is not altered or modified because of the dimensions of the space or whether vertical or horizontal to be the natural contour of the ground or whether the remains or cremains of more than one person occupy the same excavation.
Specific Authority 497.103 FS. Law Implemented 497.005(20) FS. History–New 7-20-73, Renumbered from 3-8.08 to 3D-30.08 on 9-8-75, Amended 1-27-81, Formerly 3D-30.08, 3D-30.008, 3F-6.001.
69K-6.002 Care and Maintenance of Existing Cemetery.
Every licensed cemetery shall be maintained in a reasonable condition as defined in Section 497.005(8), F.S.
Specific Authority 497.103 FS. Law Implemented 497.237, 497.241 FS. History–Amended 5-10-76, Formerly 3D-30.21, 3D-30.021, Amended 5-29-00, Formerly 3F-6.002.
69K-6.003 Cemetery By-laws.
(1) Any by-laws which had been submitted to the Department of Banking and Finance and approved prior to the effective date of Chapter 93-389, Laws of Florida (September 30, 1999), shall remain in full force and effect so long as such by-laws do not confict with the provisions of Chapter 497, F.S., or the rules promulgated thereto.
(2) A cemetery company which seeks to amend its existing by-laws need only submit to the Board of Funeral and Cemetery Services the amendments thereto and those sections of the by-laws which are affected by such amendments.
(3) Upon receipt of a set of proposed by-laws or amendments thereto, the Department shall publish notice of the filing of such by-laws or amendments thereto in the Florida Administrative Weekly and a newspaper of general circulation in the county in which the applicant cemetery is located, so that substantially affected parties may file comments. A period of thirty days for such comments shall be provided.
(4) Upon receipt of proposed by-laws or amendments thereto and any comments thereon provided by the published notice, the Executive Director of the Board of Funeral and Cemetery Services shall provide the cemetery and the substantially affected persons with an informal conference in accordance with the DFS-BYLAW1 effected June 1, 1999, which is hereby incorporated by reference and available by mail from the Department of Financial Services, Bureau of Funeral and Cemetery Services, 200 East Gaines Street, Tallahassee, Florida 32399-0361. Within fifteen (15) days after the conclusion of the informal conference, the Executive Director shall forward a recommendation to the Board and give notice to all affected persons that filed written comments of the time and place when the Board of Funeral and Cemetery Services will consider the proposed by-laws or amendments thereto.
(5) If the by-laws or amendments thereto are approved by the Board of Funeral and Cemetery Services, a notice shall be published in the Florida Administrative Weekly announcing the approval and the date the approval will become effective. The notice shall inform substantially affected parties who object to the by-laws that they may request a hearing in accordance to Chapter 120, F.S.
Specific Authority 497.103 FS. Law Implemented 497.305(3), 497.233(1)(a), 497.317, 497.325 FS. History–New 11-2-78, Formerly 3D-30.23, 3D-30.023, Amended 7-27-99, Formerly 3F-6.003.
69K-6.004 Safekeeping of Records.
All burial records referenced in Section 497.309, F.S., and those contracts under the jurisdiction of the Department and the Board of Funeral and Cemetery Services which have not been audited by the Department must be filed and kept in a secure manner. For purposes of this rule, “secure” means:
(1) A vault or fire-proof container with a properly certified fire resistant capability of at least one hour; or
(2) A computer readable media backed up by diskette, or optical disk, or tape which is stored at an off-site location; or
(3) Microfilm backed up by a security roll stored at an off-site location; or
(4) A duplicate copy of the records referenced in this rule are kept at an off-site location. Records that are deemed “secure” at an off-site location shall be updated quarterly.
Specific Authority 497.103 FS. Law Implemented 497.103, 497.309 FS. History–New 7-20-73, Renumbered from 3-8.09 to 3D-30.09 on 9-8-75, Amended 8-22-76, Formerly 3D-30.09, 3D-30.009, Amended 3-21-95, Formerly 3F-6.004.
69K-6.005 Records.
The following records shall be made available to the Department for the purposes of examinations or inspections:
(1) Cemetery License and/or Certificate of Authority;
(2) Price Disclosure List;
(3) Advertising file as in 69K-9.001, F.A.C.;
(4) By-Laws and Rules and Regulations;
(5) Financial and accounting records, including financial statements, general ledger, accounts receivable, accounts payable and cash receipts, journals, receipt books and invoices;
(6) Preneed Contracts;
(7) Other contracts, including at need sales and contracts for burial rights;
(8) Burial Records;
(9) Lot ownership records;
(10) Procedures for handling complaints as referenced by Section 497.445(6), F.S.;
(11) Mortgages on the property;
(12) Preneed Funeral Contract Consumer Protection Trust Fund and Regulatory Trust Fund remittances and supporting documentation;
(13) Record of cancellation requests and refunds given;
(14) Detailed maps of the cemetery;
(15) Procedure manuals; and
(16) Examination work papers as required by Rule 69K-6.0052, F.A.C.
These records will be available for review at the licensed facility or an alternative site of the cemetery company if approved by the Board pursuant to Section 497.309(2), F.S., Certificate of Authority holders will send written notification to the Board office if records are available for review at an alternative site.
Specific Authority 497.103 FS. Law Implemented 497.309, 497.431 FS. History–New 3-21-95, Amended 5-27-98, 4-16-00, Formerly 3F-6.005, Amended 1-12-04.
69K-6.0051 Accounts Receivable Records.
(1) Account receivable records pertaining to each individual purchaser shall be assigned the same serial number as shown on the purchaser's contract and shall be maintained in numerical sequence. The name of the purchaser or beneficiary, deferred payment price, date and amount of each payment, outstanding balance, retail price of each item, wholesale price of merchandise by item, a schedule of payments and percentage required to be deposited in each trust fund from each payment.
(2) The information contained in subsection (1) is the minimum information to be contained in the accounts receivable records.
Specific Authority 497.103 FS. Law Implemented 497.241, 497.245(5), 497.257(3), 497.309, 497.417 FS. History–New 7-20-73, Renumbered from 3-8.11 to 3D-30.11 on 9-8-75, Amended 1-27-81, Formerly 3D-30.11, 3D-30.011, Amended 5-27-98, Formerly 3F-6.0051.
69K-6.0052 Examination Work Papers.
(1) A licensed entity shall prepare and provide accurate work papers to the Department for the purpose of an examination.
(2) Work papers provided by the company shall include at least the following information for each contract:
(a) Sequentially ordered contract number;
(b) Contract type (i.e., void or cancelled);
(c) Date of contract;
(d) Payments received during examination period;
(e) Total trust liability;
(f) Trust liability percentage;
(g) Prior liability accrual;
(h) Current examination liability accrual;
(i) Prior total withdrawals from Trust; and
(j) Current withdrawals from Trust.
Items 2(d) and 2(f) may be provided on the accounts receivable records, as separate identifiable entries, in lieu of the work papers. For the purposes of this rule, trust liability and accruals should be detailed by trust funds as applicable (i.e., Care and Maintenance, Merchandise, Preneed, Preconstruction, and Special Care).
(3) Current examination work papers shall include all new contracts written during the examination period and all contracts written in prior examination period with transactional activity and/or trust liability remaining to be accrued. Work papers should include page totals for all applicable items and a grand total.
(4) Work papers that are not substantially similar in form to DFS-EW-1, effective January 1, 1999, which is hereby incorporated by reference, shall be submitted for approval to the Bureau Chief of the Bureau of Funeral and Cemetery Services, Department of Financial Services, 200 East Gaines Street, Tallahassee, Florida 32399-0361. Such format shall have a reasonable audit trail that can be followed.
(5) This rule is applicable to all contracts written under Sections 497.417, 497.245, 497.257, and 497.429, F.S., on or after October 1, 1993.
(6) The Department shall give the licensee at least 45 days notice of the scheduled examination to provide sufficient time for the work papers preparation.
Specific Authority 497.103 FS. Law Implemented 497.103(2), 497.245, 497.257, 497.309, 497.417, 497.429, 497.431 FS. History–New 8-16-98, Amended 1-1-99, Formerly 3F-6.0052.
69K-6.0054 Written Contracts Required.
(1) Written contracts on all sales must be made between the cemetery company or certificate of authority and the purchaser which contracts shall state the sales prices, terms and other pertinent information relative to the transaction. Such contracts shall be serially numbered and filed by the cemetery company or certificate of authority in numerical sequence. All sales shall be entered into a sales journal numerically.
(2) Any additional purchases or deletions made by a customer more than 30 days subsequent to the original sale must be shown on a separate contract and shall be assigned a separate serial number which number shall be the current unused number in consecutive order.
(3) Only one certificate of authority and one seller shall be represented on a sales contract. A separate sales contract shall be written for each additional certificate of authority or seller represented on a contract.
(4) The Sales contract form must comply with all disclosure requirements of Chapter 497, F.S.
(5) A copy of the sales contract form must be approved by the Board of Funeral and Cemetery Services prior to use by the certificate of authority.
Specific Authority 497.103 FS. Law Implemented 497.131, 497.241, 497.245(6), 497.257(3), 497.309, 497.337, 497.417 FS. History–New 7-20-73, Renumbered from 3-8.10 to 3D-30.10 on 9-8-75, Amended 5-10-76, 1-27-81, Formerly 3D-30.10, 3D-30.010, Amended 5-27-98, Formerly 3F-6.0054.
69K-6.006 Inspection of Cemeteries.
Inspection of cemeteries will be performed by the Department as often as necessary but not less than once per year. Such inspections shall involve the following:
(1) Maintenance of the grounds and mausoleums
(2) Verification of licenses and notices
(3) Safekeeping of records
(4) Progress of construction when preconstruction sales have been made
(5) Availability of price disclosure lists
(6) Confirmation of preneed merchandise and service contracts.
Specific Authority 497.103(2) FS. Law Implemented 497.103(2) FS. History–New 3-21-95, Amended 5-27-98, Formerly 3F-6.006.
69K-6.007 Criteria for Burial; Disinterment; Reinterment.
(1) A cemetery shall not perform a burial, interment, entombment, or inurnment, until it has received proper authorization. Such authorization shall consist of the following:
(a) An original completed burial transit permit;
(b) An authorization, in writing, on forms prescribed by the cemetery, from the individual(s) who own the burial rights for the burial space in which the burial is to take place; and
(c) An authorization, in writing, according to either cemetery by-laws or written operating procedures of the cemetery, from the individual or individuals who, at the time the interment is to be made, have the right to authorize the burial of the decedent.
(2) The cemetery may charge such burial storage fees, opening and closing fees and removal and reinstallation monument fees as are set forth on the cemetery's Price Disclosure Sheet effective at the time of providing the service, unless the monument is removed and re-installed by a registered monument installation establishment.
(3) The disinterment and reinterment of human remains shall require the physical presence of a licensed funeral director, unless the reinterment is to be made in the same cemetery.
(4) A cemetery shall not be required to perform a disinterment until it has received proper authorization. Such authorization shall consist of the following:
(a) All required permits;
(b) Written authorization from the individual or individuals who currently own the burial (interment) rights for the burial space from which the disinterment of the decedent is to take place; and
(c) Written authorization from the individual(s) who, at the time the disinterment is to be made, would be permitted to authorize the burial of the decedent.
(5) Unless the cemetery is provided with all of the documentation, the cemetery shall not perform the disinterment unless and until it receives a court order instructing it to do so.
(6) The removal of human remains from a designated temporary storage area to a place of permanent burial shall not be considered a disinterment or reinterment.
(7) The cemetery may charge such transfer fees, disinterment fees, opening and closing fees and monument removal and reinstallment fees as set forth on the cemetery's Price Disclosure Sheet in effect at the time the service is provided, unless the monument is removed and reinstalled by a registered monument installing establishment.
Specific Authority 497.103 FS. Law Implemented 497.305(1)(b), 497.309(1), 497.313(1), 497.317, 497.515(7) FS. History–New 3-21-95, Amended 2-25-98, Formerly 3F-6.007, Amended 1-12-04.
69K-6.008 Minimum Standards for Interment.
Each cemetery company shall ensure that all interments, except cremated remains, shall be covered by no less than twelve inches of soil or sod where physically possible. The family or next of kin, with prior approval of the cemetery, may authorize that the 12 inch minimum coverage be waived.
Specific Authority 497.103(1) FS. Law Implemented 497.103(3) FS. History–New 3-19-97, Formerly 3F-6.008, 3F-6.008.
CHAPTER 69K-7 TRUSTS AND TRUST FUNDS
69K-7.001 Care and Maintenance Trust Fund Deposits.
(1) The cemetery company is obligated to pay into the Care and Maintenance Trust Fund ten percent (10%) of the purchase price of burial rights as outlined in Section 497.245, F.S.
(2) Ten percent (10%) of the down payment and ten percent (10%) of each payment allocated to burial rights shall be paid to the trust fund until the full obligation is fulfilled.
(3) If the contract does not provide for the allocation of payments as anticipated in subsection (2) above, such payments shall be allocated as follows:
(a) For deferred payment contracts the trust liability as described in subsection (1) shall be divided by the total sales price.
(b) This percentage will then be applied to all payments received including the down payment and the value of credits given to determine the amount to be deposited in the care and maintenance trust fund.
(c) The percentage payments required to be deposited on each payment shall be carried out two places and the amount of deposit required may be rounded off to the nearest dollar as long as the total amount required to be deposited has been fully deposited when the contract has been fully paid.
(4) One hundred percent (100%) of all special endowments must be set aside in special trust account or a savings account in a bank or savings and loan association located within and authorized to do business in this state; or deposited in the care and maintenance trust fund. If a contract provides for a separate amount to be paid for care and maintenance, it shall be considered a special endowment. In such cases, the cemetery company shall pay the required percentage on the sum paid for the right and the amount of the endowment.
(5) If the contract contains terms which require a greater deposit to the care and maintenance trust fund or a more timely deposit, the terms of the contract shall prevail.
Specific Authority 497.103 FS. Law Implemented 497.237, 497.241, 497.245, 497.249 FS. History–New 3-22-63, Amended 4-20-63, Renumbered from 3-8.01 to 3D-30.01 on 9-8-75, Amended 1-27-81, Formerly 3D-30.01, 3D-30.001, Amended 2-1-95, 12-4-95, 5-27-98, Formerly 3F-7.001.
69K-7.002 Percentage Deposits Required on Turf Tops, Lawn Crypts, Etc.
The percentages required to be deposited in the care and maintenance fund for crypts commonly known as turf tops, lawn crypts, Westministers, and similar types, shall be computed in the same manner and at the same rate as a mausoleum if the crypt is above or partially above the natural contour of the land, unless:
(1) It is covered by at least fifteen inches of earth and sod and has a surrounding grade or slope of no greater than thirty degrees from the top of the earth and sod to the natural contour of the ground; or
(2) The base of a triangle created by the fill extends at least twice the distance from the crypt as the crypt and earth covering extends above the normal contour of the ground; or
(3) The retaining wall on the outer edges of the garden does not exceed 24 inches in height above the natural contour of the ground.
Specific Authority 497.103 FS. Law Implemented 497.245 FS. History–New 7-20-73, Renumbered from 3-8.07 to 3D-30.07 on 9-8-75, Formerly 3D-30.07, 3D-30.007, Amended 7-22-97, Formerly 3F-7.002.
69K-7.005 Performance Bond - Mausoleums or Below-Ground Crypts.
(1) As provided by Section 497.257(8), F.S., a cemetery may furnish the Board with a performance bond whenever such cemetery contemplates the sale of spaces in a section of a mausoleum or bank of below-ground crypts prior to the construction of such facilities. Such bond shall be in lieu of the payments outlined in Section 497.257(3), F.S. An approved form of such bond is hereby adopted by the Board and designated as Form DFS-F-43 and titled “Performance Bond – Mausoleums or Below-ground Crypts.” No sale of such spaces, where a bond is being given the Department in lieu of the payments provided by Section 497.257(3), F.S., shall take place prior to the delivery of such bond to the Department and receipt of written acceptance thereof by the cemetery or its agent.
(2) The amount of such bond shall be as determined by the Board. For a Section 497.257(8), F.S., bond determination, the cost of construction of a mausoleum or bank of below-ground crypts shall be determined by the Department on the basis of certified estimates of the design architect and two or more bids for such construction from contractors licensed to do business in the State of Florida.
(3) To be acceptable to the Board, the surety company on such bond shall be licensed to do business in the State of Florida and shall have been in business in this state with a record of successful operations for a period of at least five years prior to the execution of the bond and such surety company shall not be exposed on any one risk in an amount exceeding ten (10) percent of its surplus to policy-holders. Such surety company shall have at least the following minimum ratings in Best's Key Rating Guide or
other similar such rating service or publication.
Specific Authority 497.103 FS. Law Implemented 497.257(8) FS. History–New 12-22-81, Amended 3-24-82, Formerly 3D-30.30, 3D-30.030, 3F-7.005.
69K-7.006 Wholesale Purchase Price.
(1) Each licensed certificate of authority shall, prior to July 1st of each year, compile a list which includes the wholesale purchase price for each item of merchandise which the certificate of authority will provide for the subsequent twelve month period. The listed price shall be used to determine the amount to be deposited into the merchandise trust fund pursuant to Section 497.417(1), F.S.
(2)(a) For merchandise, the listed wholesale purchase price shall be the amount charged by the supplier on an invoice for the item as of June 1, of the current year.
(b) If an invoice is not available, then the listed wholesale purchase price shall be the manufacturer's catalogue price, or the manufacturer's written statement of the wholesale purchase price, as of June 1, of the current year.
(c) Invoices and other documentation used to establish the listed wholesale purchase price shall be maintained by the certificateholder.
Specific Authority 497.103 FS. Law Implemented 497.337, 497.417 FS. History–New 3-1-90, Formerly 3D-30.035, Amended 5-27-98, Formerly 3F-7.006, Amended 12-10-03.
69K-7.007 Merchandise Trust Funds - Status of Accounts.
(1) For purposes of merchandise trust funds, under the provisions of the Funeral and Cemetery Act prior to implementation of Chapter 93-399, Laws of Florida, a merchandise trust fund is in the nature of a master account (“the Fund”) used for investment purposes and is made up of commingled individual accounts deposited into the Fund in connection with the individual contracts between the cemetery company and its customers. Each of these accounts is to be established and retained in the Fund together with any income it might earn until certain events shall occur and it is determined to whom the principal of the account plus any earnings should be distributed. The principal of the account plus any earnings may be paid to the cemetery company upon the delivery of the merchandise or performance of the services or to the purchaser or his legal representative in the event that the cemetery company does not deliver the merchandise or perform the services when needed.
(2) The principal and any accrued earnings or losses in such separate account is to be held in suspense until the final determination is made to which party the account will be paid. At the time of withdrawal of the amount in the account, either the seller, cemetery company, or the purchaser or his representative is entitled to not only the principal amount deposited in the account, but also any accrued earnings on the account from the time of the deposit until the time of withdrawal.
| Bond Amount | Policy Holder's Rating | Required Financial Rating | | 0 to 100,000 | B | Class VII | | 100,000 to 500,000 | A | Class VIII | | 500,000 to 750,000 | A | Class IX | | 750,000 to 1,000,000 | A | Class X | | 1,000,000 to 1,500,000 | A | Class XI | | 1,500,000 or more | A | Class XII |
Specific Authority 497.103 FS. Law Implemented 497.349, 497.427 FS. History–New 11-15-83, Formerly 3D-30.31, 3D-30.031, Amended 4-6-03, Formerly 3F-7.007.
69K-7.008 Preneed Trust Funds - Withdrawal of Income Earned Thereon.
At the time of withdrawal a certificateholder shall take reasonable steps to evaluate the income derived from that particular contract. A certificate of authority holder may not use any formula to make the evaluation if such formula is used as a guise to make unauthorized withdrawals or results in accelerated or excessive withdrawals above the amounts allowed by Chapter 497, F.S., and the rules promulgated thereto.
Specific Authority 497.103 FS. Law Implemented 497.337 FS. History–New 8-26-85, Formerly 3D-30.32, Amended 1-4-88, Formerly 3D-30.032, Amended 4-10-97, Formerly 3F-7.008.
69K-7.009 Reporting Requirements for Certificate of Authority Holders Filing an Initial Application to Utilize a Letter of Credit or Surety Bond in Lieu of Trusting.
(1) A certificate of authority holder which chooses to purchase a surety bond or letter of credit in lieu of establishing or utilizing a trust must file a report of outstanding liabilities of merchandise and services to be covered under the surety bond or letter of credit which report must demonstrate by the following information that each existing trust has been operated in conformance with Chapter 497, F.S.
(a) An itemized listing in numerical order of all contracts which have an existing outstanding liability to the merchandise trust fund as described in Section 497.048(3)(a), F.S., and Rule 3D-30.024, F.A.C.;
(b) The purchaser's name;
(c) A brief description of the merchandise for which a liability exists;
(d) The total liability to the merchandise trust fund of merchandise and services and the liability which has accrued to the merchandise trust fund based upon payments received;
(e) A numerical listing of contracts for which a full or partial withdrawal from the merchandise trust fund was made containing the following information:
1. The purchaser's name;
2. The amount withdrawn;
3. The date of withdrawal;
4. The date of cancellation; and
5. A statement from the corporate trustee verifying all principal amounts deposited to and withdrawn from the trust fund.
(2) The report shall be filed in the following manner:
(a) The report must be signed by the cemetery company's chief financial officer;
(b) The report shall accompany the cemetery company's application on Form DFS-C-1, Application to Use a Letter of Credit or Surety Bond, to the Board for approval of the use of a surety bond or letter of credit pursuant to Section 497.425, F.S., and Rules 69K-7.011 and 69K-7.012, F.A.C.
(3) “Gross replacement or wholesale value” means for all services and facilities rented, seventy percent (70%) of the purchase price; for all cash advance items purchased, one hundred percent (100%) of the purchase price; for all merchandise items purchased, thirty percent (30%) of the purchase price or one hundred ten percent (110%) of the wholesale cost, which ever is greater.
Specific Authority 497.103, 497.425 FS. Law Implemented 497.417(1), 479.419, 497.421 FS. History–New 3-20-91, Formerly 3D-30.037, Amended 10-25-95, 5-27-98, Formerly 3F-7.009.
69K-7.010 Reporting Requirements for Certificate of Authority Holders Utilizing a Surety Bond or Letter of Credit in Lieu of Trusting.
(1) A certificate of authority holder which chooses to utilize a surety bond or letter of credit in lieu of maintaining a trust must file a report of outstanding liabilities of merchandise and services to be covered under the surety bond or letter of credit to accompany the application as provided for in Rules 69K-7.012 and 69K-7.011, F.A.C. This report shall be used to determine the amount of the surety bond or letter of credit and shall contain the following information in sequential order:
(a) An itemized listing in numerical order of all contracts sold during or subsequent to 1972 which have an existing outstanding liability for undelivered merchandise or services;
(b) The purchaser's name;
(c) A brief description of the merchandise for which a liability exists;
(d) The total liability to the certificate of authority holder for all undelivered merchandise or services which were sold during or subsequent to 1972.
(2) The report shall be filed in the following manner:
(a) The report must be signed by the certificate of authority holder's chief financial officer;
(b) The report shall be compiled annually and must be submitted to the Board within one hundred five (105) days from the end of the certificate of authority holder's fiscal year.
(3) “Gross replacement or wholesale value” means for all services and facilities rented, seventy percent (70%) of the purchase price; for all cash advance items purchased, one hundred percent (100%) of the purchase price; for all merchandise items purchased, thirty percent (30%) of the purchase price or one hundred ten percent (110%) of the wholesale cost, which ever is greater.
(4) The certificate of authority holder's obligation to file this report with the Board shall end upon the certificate of authority holder ceasing the use of a surety bond or letter of credit.
Specific Authority 497.103, 497.425 FS. Law Implemented 497.425 FS. History–New 3-20-91, Formerly 3D-30.038, Amended 10-25-95, 5-27-98, Formerly 3F-7.010.
69K-7.011 Criteria for Filing a Letter of Credit in Lieu of Trusting.
(1) As provided by Section 497.425(2), F.S., in lieu of utilizing a trust or purchasing a surety bond, a certificate of authority holder may obtain a letter of credit.
(2) For approval, the certificate of authority holder shall submit to the Board of Funeral and Cemetery Services, Form DFS-C-1, Application to Use a Letter of Credit or Surety Bond, which is hereby incorporated by reference (effective 6-21-01) and available from the Department of Financial Services, Bureau of Funeral and Cemetery Services, 200 East Gaines Street, Tallahassee, Florida 32399-0361 and meet the following criteria:
(a) The certificate of authority holder must file with its application the report which demonstrates its existing trust complies with Section 497.048, F.S. (1991), or as amended by Laws of Florida, Chapter 93-399 as set forth in Rule 69K-7.009, F.A.C.;
(b) The amount of the letter of credit shall be based on a report of outstanding liabilities as set forth in Rule 69K-7.010, F.A.C. The report shall be compiled and updated annually. The amount of the letter of credit shall be increased as necessary to correlate with changes in the outstanding liabilities;
(c) The letter of credit shall state the name of the certificate of authority holder as the purchaser;
(d) The letter of credit shall be made payable to the State of Florida for the benefit of the Board and all purchasers of preneed cemetery merchandise or services;
(e) The letter of credit shall only be issued by a state or national bank, credit union, or savings and loan association;
(f) The letter of credit shall be irrevocable for a thirty-six month period from the date of issuance; and
(g) The letter of credit cannot name the following as collateral:
1. The initial fifteen acres licensed as cemetery property pursuant to Section 497.253, F.S., and any contiguous land in which human remains are interred;
2. Any other areas of actual burial;
3. Any area subject to preneed sale;
4. Mausoleums;
5. Lawn Crypts;
6. Columbaria; and
7. Any trust fund entered into pursuant to Chapters 497 and 639, F.S.
(3) The issuer of the letter of credit must agree to give the Board and the certificate of authority holder at least ninety (90) days written notice if the issuer of the letter of credit intends not to renew it at the time of expiration. Upon receipt of the notification that the letter of credit will not be renewed, the certificate of authority holder shall immediately:
(a) Secure another letter of credit;
(b) Purchase a surety bond; or
(c) Establish a preneed trust fund with an initial deposit which shall include:
1. The wholesale purchase price plus 10% or 30% of retail, whichever is greater, for all merchandise and 70% of retail for all services and 100% retail for all cash advances which were included in the letter of credit, unless the contracts require more;
2. The wholesale purchase price shall be determined at the time the preneed trust fund is established.
(4) The certificate of authority holder must cease all preneed sales of services and merchandise at the beginning of this ninety (90) day period if an alternative method of trusting is not established.
(5) The Board shall deny an application to use a letter of credit in lieu of the merchandise trust fund if the application is incomplete or if the report as set forth in Rule 69K-7.009, F.A.C., shows the existing merchandise trust is not in compliance with the law.
Specific Authority 497.103, 497.425 FS. Law Implemented 497.425, 497.427 FS. History–New 3-20-91, Formerly 3D-30.036, Amended 10-25-95, 7-22-97, 6-21-01, Formerly 3F-7.011.
69K-7.012 Criteria for Filing a Surety Bond in Lieu of Trusting.
(1) As provided by Section 497.425(1)(a), F.S., in lieu of utilizing a preneed trust fund a certificate of authority holder may purchase a surety bond.
(2) For approval the certificate of authority holder shall submit to the Board of Funeral and Cemetery Services, Form DFS-C-1, Application to Use a Letter of Credit or Surety Bond, as set forth in Rule 69K-7.011, F.A.C., and meet the following criteria.
(a) The certificate of authority holder must file with its application the report which demonstrates its existing trust complies with Section 497.337, F.S. (1991), as set forth in Rule 69K-7.009, F.A.C. For purposes of reporting under this section with respect to contracts entered into prior to October 1, 1993, the applicant shall demonstrate that its existing trust is in compliance with the provisions of the law in place when the contract was entered into; and
(b) The amount of the bond shall be based on a report documenting the outstanding liabilities of the certificate of authority holder as prescribed by Section 497.425(1)(b), F.S., and set forth in Rule 69K-7.010, F.A.C.; however, should no liabilities exist, a minimum of $250,000 will be the initial amount. If the certificate of authority has existing liabilities that are secured by a trust fund account which will remain in place, and desires to secure new preneed sales with a surety bond, the face amount of the bond shall
be at least $1,000,000.
(3) The report shall be updated annually as required by Section 497.425(1)(c), F.S.
(4) An approved form of the surety bond is hereby adopted by the Board, designated as Form DFS-C-2, Surety Bond, hereby incorporated by reference and is available from the Department of Financial Services, Bureau of Funeral and Cemetery Services, 200 East Gaines Street, Tallahassee, Florida 32399-0361.
(5) The surety company or its agent, on such bond shall be licensed to do business in the State of Florida, and shall have been in business in this state with a record of successful operations for a period of at least five (5) years prior to the execution of the bond and meet the following criteria:
(a) The surety company must have at minimum a Best's rating of A- with a “Financial Size Category” of at least “X”.
(b) The surety company must have an “underwriting limitation” of not less than $10,000,000 as reported in the U.S. Department of the Treasury's Fiscal Service Dept. Circular 570, incorporated herein by reference and effective 8-2-01.
(6) The surety company must agree to give the Board and the certificate of authority holder at least one hundred twenty (120) days written notice if the surety company does not intend to renew the surety bond at the time of expiration. The certificate of authority holder must agree upon receipt of the notification that the surety bond will not be renewed to immediately:
(a) Purchase another surety bond;
(b) Secure a letter of credit; or
(c) Establish a preneed trust fund with an initial deposit which shall include:
1. The wholesale purchase price plus 10% or 30% retail, whichever is greater, for all merchandise and 70% retail for all services and 100% retail for all cash advances which were included in the surety bond unless the contract requires more;
2. The wholesale purchase price shall be determined at the time the preneed trust fund is established.
(7) The certificate of authority holder must cease all preneed sales of services and merchandise at the beginning of this ninety (90) day period if an alternative method of trusting is not established.
(8) The Board shall deny an application to use a surety bond in lieu of the merchandise trust fund if the application is incomplete or if the report as set forth in Rule 69K-7.009, F.A.C., shows the existing merchandise trust is not in compliance with the law.
Specific Authority 497.103, 497.425 FS. Law Implemented 497.425 FS. History–New 3-20-91, Formerly 3D-30.039, Amended 10-25-95, 7-22-97, 8-2-01, Formerly 3F-7.012.
69K-7.0125 Alternative Form of Security for Permanent Outer Burial Receptacle Manufacturers.
(1) Pursuant to Sections 497.423(9) and 497.337(2)(c), F.S., manufacturers of permanent outer burial receptacles shall be permitted to utilize the alternative form of security as provided in Section 497.337(2), F.S., and this rule, in connection with the sale of permanent outer burial receptacles sold to pre-need sellers in Florida. For purposes of this rule, a “permanent outer burial receptacle” as referred to in Section 497.337(2)(c), F.S., has the same meaning as an “outer burial container,” as defined in Section
497.005(29), F.S.
(2) The alternative form of security available to all permanent outer burial receptacle manufacturers who supply permanent outer burial receptacles to pre-need sellers in Florida, shall be in compliance with Chapter 497, F.S., and shall provide for an Alternative Manufacturers' Trust, together with a Manufacturers' Delivery Surety/Guarantee, defined as follows:
(a) Alternative Manufacturers' Trust.
1. An Alternative Manufacturers' Trust (trust) may be established in the State of Florida by a permanent outer burial receptacle manufacturer or the Manufacturers' Delivery Surety/Guarantor which trust shall be authorized to do business in Florida and shall be subject to interpretation, jurisdiction and venue in Florida under all applicable Florida laws. The trustee shall, with the Board's approval, be selected by the manufacturer or the Manufacturers' Delivery Surety/Guarantor.
2. Each deposit to the trust in connection with a pre-need sale of its product, shall be accounted for separately by the trustee and shall provide for quarterly valuation and pro-rata allocation of trust fund earnings and expenses during the period to each then outstanding trust account or sub-account;
3. The amount deposited as a result of each pre-need sales transaction will be made directly payable to the trust and shall be equal to one-hundred (100%) percent of the then existing manufacturer's wholesale price. The funds shall remain in the trust until such time as they become available for disbursement under Chapter 497, F.S., which disbursements shall be limited to the following:
a. The payment of trust expenses as provided in Chapter 497, F.S.;
b. The refund of a trust deposit, which, in the event a pre-need contract purchaser elects to cancel his or her pre-need contract, shall be made to the manufacturer for delivery to the pre-need seller;
c. The payment by the trustee to the manufacturer after delivery at the time of need, upon submission to the trustee of a fully completed invoice for property delivered. Payment by the trustee out of the trust to the manufacturer shall be limited to the lesser of the manufacturers' list price at the time of need or to the specific amount of funds in the trust allocated to the specifically identified account or sub-account relating to the invoice submitted;
d. The payment to the Department or Board in order to reimburse the Department or Board in the event the Department or Board is required to make payment in order to complete delivery at the time of need in response to purchaser's claim, where the manufacturer has failed to make delivery of the permanent outer burial receptacle and the Manufacturers' Delivery Surety/Guarantor has not performed pursuant to its Manufacturers' Delivery Surety/Guarantee.
(b) Manufacturers' Delivery Surety/Guarantee. In addition to the trust provided by this rule, a Manufacturers' Delivery Surety/Guarantor shall execute and deliver to the pre-need seller a Manufacturers' Delivery Surety/Guarantee which shall provide:
1. In the event that the manufacturer shall for any reason whatsoever not be able to deliver the permanent outer burial receptacle at the purchaser's time of need, then in such event (prior to disposition of funds from the trust), the Manufacturers' Delivery Surety/Guarantor shall deliver the permanent outer burial container at the time of need for the lesser of its then existing list price, or that portion of the trusted funds allocated to the specific trust account or sub-account.
2. In the event the Manufacturers' Delivery Surety/Guarantor operating under this rule shall be unable to effect delivery or its operations are for any reason discontinued, the trust shall continue in operation but the Department shall take over as trustee for the trust. The trust shall no longer accept deposits on pre-need contract sales and all funds deposited in connection with all prior and outstanding contracts in which delivery was effected shall remain in trust until the terms of all outstanding contracts have been fully
satisfied.
(c) Manufacturers' Delivery Surety/Guarantor Qualification.
1. In order for any Manufacturers' Delivery Surety/Guarantor to be considered for approval by the Board under this rule, such Manufacturers' Delivery Surety/Guarantor shall be affiliated with a manufacturer doing business in Florida.
2. Any Manufacturers' Delivery Surety/Guarantor approved by the Board who wishes to utilize this rule shall:
a. Obtain a certificate of approval from the Board to act as a Manufacturers' Delivery Surety/Guarantor and to establish an Alternative Manufacturers' Trust for the receipt of funds in Florida in connection with the sale of permanent outer burial receptacles sold on a pre-need basis;
b. Submit its financial statements to the Board on an annual basis pursuant to Sections 497.423(10)-(13), F.S.;
c. File a copy of all forms, certificates, guarantees and trust agreements and all changes or modifications thereof, to the Board, for review as to legal sufficiency; and
d. Guarantee to the pre-need seller pursuant to this rule that its permanent outer burial receptacle products will be available for delivery at any time of need.
3. The Manufacturers' Delivery Surety/Guarantee shall at all times assure an equivalent or better product will be delivered at the time of need. The Manufacturers' Delivery Surety/Guarantee shall include as an exhibit, a list of the Manufacturers' Delivery Surety/Guarantors' product line. Said exhibit shall be updated on an annual basis with the Board by the approved manufacturer. With regard to the manufacturers' wholesale or selling price, the manufacturer shall also file, on an annual basis, any changes in its
wholesale or selling price with the Board.
Specific Authority 497.103, 497.337(2)(c) FS. Law Implemented 497.337(2)(c) FS. History–New 6-15-95, Amended 3-5-01, Formerly 3F-7.0125.
69K-7.013 Procedures for Filing Claim with the Board.
A buyer of preneed merchandise or services who does not receive such services or merchandise due to the economic failure, closing, or bankruptcy of the certificateholder which has submitted a surety bond or letter of credit to the Board in lieu of utilizing a preneed trust fund may file a claim with the Board as provided by Section 497.425(3)(a), F.S. The name and address of the surety company shall be provided by the Department. Once the requirements of Section 497.425(3)(a), F.S., have been met, the purchaser
of preneed merchandise or services must file the claim in the following manner:
(1) Submit to the Board Form DFS-C-3, Letter of Credit/Surety Bond Claim Form, which is hereby incorporated by reference (effective 6-21-01) and available at the Department of Financial Services, Bureau of Funeral and Cemetery Services, 200 East Gaines Street, Tallahassee, Florida 32399-0361;
(2) Attach a copy of the preneed contract for merchandise or services which is the subject of the claim and provide documentation evidencing the purchaser's payment for the merchandise or services; and
(3) Submit evidence that the purchaser has made reasonable attempts to have the certificateholder deliver the merchandise or perform the service.
Specific Authority 497.103, 497.425 FS. Law Implemented 497.425(3)(a) FS. History–New 3-20-91, Formerly 3D-30.040, Amended 6-21-01, Formerly 3F-7.013.
69K-7.015 Trust Agreements and Trustees.
(1) Any trust company operating pursuant to Chapter 660, F.S., or a state or national bank holding trust powers or a savings and loan association holding trust powers shall be considered a Trustee qualified to serve as a Trustee of a preneed trust under Section 497.417 or 497.429, F.S., or a pre-construction trust under Section 497.257, F.S.
(2) Any trust company operating pursuant to Chapter 660, F.S., or a state or national bank holding trust powers shall be considered a Trustee qualified to serve as Trustee of a Care and Maintenance Trust under Section 497.237, F.S.
(3) All Trust Agreements and all amendments thereto must be submitted to and approved by the Board of Funeral and Cemetery Services.
(4) Each Trust Agreement must provide for:
(a) Resignation of the Trustee.
(b) Replacement of Trustee by Trustor/Settlor/Grantor.
(c) Transfer of assets of the Trust.
(5) Transfer of assets to another trust agreement is permissible provided the trust agreement was approved by the Board, if applicable, and the terms of both trust agreements are consistent and meet the requirements of Rule 69K-7.020, F.A.C.
(6) Transfer of assets of any trust must be made only to a qualified Trustee as set forth in subsection (1) or (2) above, and only after written notice to the Department and the Board of the name, address, and location of the successor trustee; the effective date of the selection thereof; and the transfer of the assets which must be certified to by the replaced or resigned Trustee to which shall be attached a receipt thereof from the Successor Trustee.
Specific Authority 497.103, 497.349, 497.436 FS. Law Implemented 497.237, 497.349, 497.436 FS. History–New 4-25-94, Amended 4-6-03, Formerly 3F-7.015.
69K-7.016 Duties and Powers of Trustee; Authorized Investments.
(1) Each trustee serving pursuant to a trust agreement approved by the Board shall be responsible for the administration of the trust and the investment of its assets in a manner consistent with Chapter 497, F.S.
(2) The duties and responsibilities of the trustee shall not be shared with the certificateholder that established the trust or discharged to any third party associated with investment decisions. An advisor to the trustee may be appointed by the certificateholder, however the recommendations of such advisor shall not be binding on the trustee and the trustee's liability shall not be diminished or abrogated in any way as a result of following the advice of the advisor.
(3) The certificateholder or the advisor appointed by the certificateholder is authorized to request the trustee to invest trust assets in whole or in part, in tax-free investments. An investment advisor is authorized to make non-binding recommendations to the trustee concerning specific investments.
(4) The trustee shall have the powers set forth in Part IV of Chapter 737, F.S., to the extent they are not inconsistent or do not conflict with Chapter 497, F.S.
(5) The trustee shall have the power to invest the trust assets in those investments set forth in Section 215.47, F.S., however, there shall be no limitation on the portion of the trust assets that are allocated to tax-free investments pursuant to a request as stated in subsection (3) of this rule.
Specific Authority 497.103 FS. Law Implemented 497.417 FS. History–New 8-9-94, Amended 4-29-99, Formerly 3F-7.016.
69K-7.017 Trust Fund Deposits; Funeral and Burial Services and Merchandise Preneed Contract Payments.
(1) All payments paid toward any preneed funeral or burial service or merchandise contract shall be trusted pursuant to Section 497.417 or 497.429, F.S., unless such merchandise or service is sold by a cemetery company and such merchandise is delivered or such service performed within 120 days after receipt of the final payment in accordance with Section 497.337, F.S. This section shall not apply to preneed contracts sold pursuant to Section 497.423 or 497.425, F.S.
(2) If the contract payments are made in deferred installments for merchandise and services which are not intended to be delivered as provided in subsection (1) above, then the funds paid on each installment shall be allocated in the manner set forth in the contract.
(3) If the contract does not provide for the allocation of payments as anticipated in subsection (2) above, such payments shall be allocated as follows:
(a) Funds collected for preneed services or merchandise contracts which comply with Section 497.417, F.S., shall be deposited in trust as follows: 70 percent of funds collected for services; 100 percent of funds collected for cash advance items; and 30 percent of funds collected or 110 percent of wholesale cost, whichever is greater, for merchandise. For deferred payment contracts the liability for each portion of the contract (services, cash advances and merchandise) shall be divided by the deferred payment price
to arrive at the percentages for each portion of the contract. These percentages shall be applied to payments received to determine the amount to be deposited in trust. Once the total liability to the trust is fulfilled, no further deposits need be made to the trust. (b) Funds collected for preneed services or merchandise contracts which comply with Section 497.429, F.S., shall not require allocation. The contract purchaser must make all payments to the Trustee or its servicing agent. The certificate holder (seller) may receive a distribution of 10% of funds collected by the Trustee. Once the total liability to the trust is fulfilled, no further deposits need be made to the trust.
(4) In the event that funds deposited into trust exceed the amount required by the contract or these rules, the certificate holder may withdraw the excess funds upon establishing that the total liability to the fund will equal the total corpus on deposit and the funds on deposit can be allocated and balanced on a contract-by-contract basis.
(5) Monthly reports shall be maintained showing the monies received and monies trusted on a contract-by-contract basis. The report shall also reflect the total monies received and trusted and that such trust deposits reconcile with the total monthly contract obligations.
(6) Documentation shall be maintained and be readily retrievable which shall show the calculation of trust liability and the percentage of payments made into the appropriate trust fund.
Specific Authority 497.103 FS. Law Implemented 497.333(8)(d), 497.337, 497.417, 497.423, 497.425, 497.429 FS. History–New 2-1-95, Amended 5-27-98, 3-5-01, Formerly 3F-7.017.
69K-7.020 Treatment of Trusts Under Chapters 497 and 639, F.S.
(1) An “old Chapter 497, F.S., merchandise trust” is defined as a trust created and approved on or before September 30, 1993, pursuant to Chapter 72-78, Laws of Florida, or as thereafter amended, for the deposit of proceeds from preneed contracts for burial services or related merchandise.
(2) A “new Chapter 497, F.S., preneed trust” is defined as a trust created and approved on or after October 1, 1993, pursuant to Chapter 93-399, Laws of Florida, or as thereafter amended, for the deposit of proceeds from preneed contracts for funeral services, burial services, or related merchandise.
(3) A “Chapter 639, F.S., funeral trust” is defined as a trust created and approved on or before September 30, 1993, pursuant to Chapter 77-438, Laws of Florida, or as thereafter amended, for the deposit of proceeds from preneed contracts for funeral services or related merchandise.
(4) The Board shall have jurisdiction over all old Chapter 497, F.S., merchandise trusts, new Chapter 497, F.S., preneed trusts, Chapter 639, F.S., funeral trusts, and all other trusts created pursuant to Chapter 497, F.S., in existence on October 1, 1993, or created thereafter.
(5) All Chapter 639, F.S., funeral trusts shall retain the same trustee powers and trust provisions as authorized by Chapter 639, F.S., on September 30, 1993, as to all preneed funeral contracts entered into prior to September 30, 1993, even though said contracts do not pay out until after October 1, 1993.
(6) Each certificateholder, settlor or trustor may change the trustee of any Chapter 639, F.S., funeral trust as provided in Chapter 497, F.S., (1993). Nevertheless, the trust provisions and trustee powers shall remain as they were in the Chapter 639, F.S., funeral trust agreement and related documents.
(7) A settlor or trustor may transfer assets from one Chapter 639, F.S., funeral trust upon the approval of the Board provided:
(a) The terms of the receiving trust do not violate any terms and conditions of the contracts or rights of the contract purchaser which provide the funds to be transferred;
(b) The certificateholder or the trustee, as appropriate, acknowledges in writing its responsibilities under the trust and contract documents including its ability to segregate contracts by type to ensure that proper payment is made upon the death of the beneficiary or proper refund is made upon cancellation of a contract; and
(c) The Board determines that such transfer will not impair the rights of the contract purchaser.
(8) No post-October 1, 1993, preneed contract may be trusted under a Chapter 639, F.S., funeral trust. Except as provided in subsection (9) of this rule, preneed contracts dated prior to October 1, 1993, which have not been completely paid by the contract purchaser shall continue to be trusted to the proper Chapter 639, F.S., funeral trust or the appropriate old Chapter 497, F.S., merchandise trust.
(9) A settlor or trustor may submit a new trust agreement for approval by the Board and transfer thereto assets from a Chapter 639, F.S., funeral trust or assets from an old Chapter 497, F.S., merchandise trust so long as all trust provisions and trustee powers are in conformity with Chapter 497, F.S. All such transfers shall be approved by the Board provided that the terms set forth in paragraph (7)(a) through (c) of this rule are complied with.
(10) In all Chapter 639, F.S., funeral trusts or old Chapter 497, F.S., merchandise trusts where compliance with the provisions of Chapters 215 or 497, F.S., would result in a potential financial loss to the trust assets, any such sale or transfer of assets, that would result in the potential loss must be first approved by the Board according to a submitted plan of sale or transfer.
(11) All new Chapter 497 funeral trust agreements and other trusts created pursuant to Chapter 497, F.S., submitted for approval of the Board must be in conformity with all provisions of Chapter 497, F.S., as now existing or as hereinafter amended.
(12) All cemetery care and maintenance trust fund agreements existing prior to October 1, 1993, shall remain effective, but all of the provisions of Chapter 497, F.S., shall immediately apply to these trust agreements and the trustee powers shall be those provided in Chapter 497, F.S.
(13) All cemetery pre-construction trust fund agreements existing prior to October 1, 1993, shall remain effective but all of the provisions of Chapter 497, F.S., shall immediately apply and the trustee's powers shall be those provided in Chapter 497, F.S., except:
(a) The allocation of investments therein need not be in compliance until September 30, 1995,
(b) The trusting formula on contracts dated prior to October 1, 1993, shall be the formula in effect on September 30, 1993; and
(c) The trusting formula on contracts dated after October 1, 1993, shall be in conformity with Chapter 497, F.S.
(14) If an asset is transferred from one trust to another as provided herein, then the asset in its entirety including any income derived therefrom must be transferred to the successor trust.
Specific Authority 497.103 FS. Law Implemented 497.237, 497.241, 497.245, 497.249, 497.257, 497.415, 497.417, 497.419, 497.421, 497.429 FS. History–New 4-11-95, Formerly 3F-7.020.
69K-7.022 Payment of Funds Upon Contract Fulfillment; Documentation Required.
(1) Upon fulfillment, either in part or in whole, a certificate of authorityholder may withdraw the amount deposited to trust plus income earned thereon for the merchandise or services which are delivered, when adequate documentation is submitted to the trustee.
(2) The following documentation shall be satisfactory evidence to show that a preneed contract has been fulfilled:
(a) Certified copy of a death certificate or;
(b) Invoice for merchandise which reflects the name of the purchase or beneficiary and the contract number or;
(c) Acknowledgement signed by the purchaser or next of kin, acknowledging that merchandise was delivered or services performed or;
(d) Certification signed by an officer, manager or designee that the merchandise was delivered and/or services are performed or;
(e) Burial permit or other documentation provided to another governmental agency.
(3) The certificate of authorityholder shall maintain documentation which supports fulfillment of a particular contract until such records are examined by the department.
Specific Authority 497.103 FS. Law Implemented 497.421 FS. History–New 4-9-97, Formerly 3F-7.022.
CHAPTER 69K-8 CONTRACTS
69K-8.002 Cancellation of Contracts.
(1) A purchaser may cancel a preneed contract in accordance with the terms of the contract, statute and rules that were effective at the time the contract was written.
(2) If the contract requires a greater refund than the statute or rules, the terms of the contract must be honored.
(3) When a preneed contract or cemetery contract is canceled, the accumulated earnings allocable to such contract shall be paid to the certificate holder as provided by the statute and rules in effect when the contract was written.
(4) The seller of a preneed or cemetery contract may not cancel the contract unless the purchaser is in default under the terms of the contract or pursuant to the applicable statute and rules.
Specific Authority 497.103 FS. Law Implemented 497.419 FS. History–New 1-29-81, Formerly 3D-30.27, 3D-30.027, Amended 7-6-97, Formerly 3F-8.002.
69K-8.003 Cancellation of Preneed Contracts; Reasonable Time Defined.
For purposes of Section 497.419(3)(a), F.S., a reasonable time for delivering merchandise consisting of “caskets” as defined by Section 497.005(9), F.S., and “outer burial containers” as defined by Section 497.005(29), F.S., shall be 24 hours from the time the purchaser or agent requests that the certificateholder deliver the merchandise. The certificateholder shall record the date and time that the request for delivery is received from the purchaser or agent in a log kept for that purpose. In the event a certificateholder fails to maintain such log and record a request for delivery, then the date and time of such request shall be the date and time designated by the purchaser or agent.
Specific Authority 497.103 FS. Law Implemented 497.419(3)(a) FS. History–New 4-25-94, Amended 3-5-01, Formerly 3F-8.003.
69K-8.004 Preneed Contracts; Miscellaneous Provisions.
(1) Funds received on a preneed contract must be credited to the specific contract and all calculations regarding deposits to trusts or refunds to purchasers must be based on the amount paid by the purchaser or his representative.
(2) An overpayment on a preneed contract shall be refunded to the purchaser by the certificateholder upon cancellation or fulfillment. With regard to all contracts upon which installment payments are being received on the date this rule becomes effective, any overpayment will be refunded following the receipt or the last installment payment, so long as the overpayment is $5 or greater.
(3) Misapplied or unidentified preneed funds shall be transferred to the correct preneed account immediately upon discovery, and shall be considered deposited timely if the funds were deposited in the trust in accordance with Sections 497.417 and 497.429, F.S.
(4) Preneed accounts which are under or over trusted due to computer or manual miscalculations must be corrected
immediately upon discovery, on a contract per contract basis.
(5) An executed preneed contract may be amended if the contract change does not affect the description or sales price of merchandise, or the sales price of services or cash advances, as reflected on the originally executed contract. All contract changes must be initialed and dated by the contract purchaser. The contract must be clearly legible before and after any amendments. A contract amendment can be in the form of an addendum to the contract provided the addendum is signed by the purchaser and certificateholder or cemetery company and is attached to the original contract. If a contract is rewritten, funds credited to the original contract shall be transferred to the rewritten preneed contract within 30 days, but if the rewritten contract is canceled within thirty days, the old contract is reinstated and all funds paid by the purchaser on the new contract shall be returned to the purchaser.
Specific Authority 497.103 FS. Law Implemented 497.415, 497.417, 497.419 FS. History–New 3-20-95, Amended 6-15-95, 8-17-95, 4-10-97, 2-18-03, Formerly 3F-8.004.
69K-8.005 Preneed Contracts Funded by Life Insurance.
(1) A preneed contract may be funded by a life insurance policy payable upon death of the preneed contract beneficiary, provided that no such policy may be sold if its maturity value is less than the amount of the services, merchandise or burial rights to be provided under the preneed contract. For purposes of this rule, maturity value shall mean the amount payable on the policy when
all premiums for the policy have been paid, or all conditions for full payment of the policy amount have been met, and must at least equal the cost to the preneed purchaser of the services, merchandise, or burial rights established at the time the preneed contract is executed.
(2) Preneed contracts funded by life insurance may be sold only by persons holding a valid certificate of authority pursuant to Section 497.405, F.S.
(3) Any insurance policy used to fund a preneed contract must be sold in a manner that complies with Sections 626.785 and 626.954(1)(s) and (t), F.S. |
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