As part of our New Year’s resolutions for 2013, the Surety Bond Insider will feature surety legislation that’s currently in the works. This coverage will be in addition to our coverage of legislation that’s already been enacted. We’re kicking off this new blog feature today with Alabama HB 10 — a bill that was introduced on December 7, 2012, and is scheduled to be first read to the House of Representatives Committee on Insurance on February 5, 2013.
If passed, HB 10 would do the following:
- “provide further for the definition of a preneed contract and would clarify that a preneed contract is not an insurance contract”
- “clarify and require any person selling funeral or cemetery services on a preneed basis to obtain a certificate of authority from the Department of Insurance”
- “revise the annual application and renewal dates for persons holding preneed certifications of authority and would waive the requirement of filing annual financial statements under certain circumstances and upon written request to the commissioner”
- “require each certificate holder to file with the commissioner a quarterly report of all preneed contract activity”
- “clarify the amount of a bond used as an alternative to a trusting requirement”
Current law requires that those who plan future cemetery and/or funeral services provide a preneed funeral surety bond in an amount equal to or greater than the aggregate value of outstanding liabilities on undelivered preneed contracts for merchandise, services and cash advances can be posted to secure preneed funeral contracts. HB 10 would revise the definition of “outstanding liabilities” to only apply to contracts written since April 30, 2002, and alter the bond requirement to an amount sufficient to cover the outstanding liability when each contract is executed. Additionally, the bond amount would be based on the liabilities of the previous quarter and the projected liabilities of the next quarter rather than on an annual report of the contract seller’s liabilities.
Stay tuned for more information about Alabama HB 10.
If you need a surety bond in Alabama or any other state, contact SuretyBonds.com online or by phone at 1 (800) 308-4358. It’s our goal to help our clients enjoy fast, easy and accurate bonding services.