HOUSE BILL No. 5471


     February 29, 2000, Introduced by Rep. Tabor and referred to the Committee on Senior Health, Security and Retirement.


        A bill to amend 1986 PA 255, entitled

   "Prepaid funeral contract funding act,"

   by amending sections 14 and 19 (MCL 328.224 and 328.229).

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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           Sec. 14.  (1) Payments of principal and income by a deposi-

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      tory or an escrow agent made in good faith pursuant to the terms

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      of this act  shall  relieve that depository or escrow agent of

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      any further liability for that principal and income.

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           (2) An escrow agent shall invest funds held or managed under

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      this act only as expressly authorized by this act.  and shall not

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      invest funds by purchasing life insurance or annuities the pro-

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      ceeds of which are not payable in full until the happening of

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      some event including, but not limited to, death of the contract

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      beneficiary. 




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           (3) A provider or an escrow agent may, without approval of

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      any other party, change the depository of any escrow account,

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      with or without cause, at any time.  A contract buyer shall be

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      notified if the escrow agent or depository is changed.

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           Sec. 19.  (1) A prepaid funeral contract may be made with an

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      applicant for or recipient of assistance under the social welfare

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      act,  Act No. 280 of the Public Acts of 1939, being sections

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      400.1 to 400.121 of the Michigan Compiled Laws  1939 PA 280, MCL

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      400.1 TO 400.122, or a patient or a legal guardian of a patient

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      in a mental health care facility under the jurisdiction of the

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      department of  mental  COMMUNITY health.  If the  department of

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      social services  FAMILY INDEPENDENCE AGENCY or department of

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       mental  COMMUNITY health determines that the contract is a fully

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      paid guaranteed price contract of not more than  $2,000.00  THAT

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      AMOUNT ALLOWED UNDER SECTION 2080(6)(G) OF THE INSURANCE CODE OF

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      1956, 1956 PA 218, MCL 500.2080, exclusive of income, and that

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      the state will not be liable for the funeral goods or funeral

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      services, excluding an outside receptacle when required by the

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      chosen cemetery, of the applicant for or recipient of assistance

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      or patient allowable under contracts under this act, the prepaid

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      funeral contract shall be made irrevocable at the request of the

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      applicant for or recipient of assistance, or the patient or a

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      legal guardian of a patient.  The  department of social services 

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      FAMILY INDEPENDENCE AGENCY or department of  mental  COMMUNITY

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      health shall advise the applicant for or recipient of assistance,

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      or the patient or a legal guardian of a patient that additional

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      funeral goods or funeral services subject to contract under this



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      act will not be paid by the  department of social services 

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      FAMILY INDEPENDENCE AGENCY or department of  mental  COMMUNITY

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      health but shall not specify or require approval of particular

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      funeral goods or funeral services selected by the applicant for

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      or recipient of assistance, or patient or a legal guardian of a

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      patient.

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           (2) A prepaid funeral contract approved by the  department

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      of social services  FAMILY INDEPENDENCE AGENCY or department of

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       mental  COMMUNITY health shall not be revoked or canceled by the

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      contract seller, contract provider, contract buyer, or their suc-

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      cessors, or the estate of the contract beneficiary either before

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      or after the death of the contract beneficiary.  However, noth-

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      ing in this  THIS subsection  shall  DOES NOT prevent those

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      legally entitled to make arrangements for a contract beneficiary

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      from reallocating the amount paid under the prepaid FUNERAL con-

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      tract to different funeral services and funeral goods.  An irrev-

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      ocable contract shall not be considered in determining the eligi-

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      bility of an applicant or recipient for assistance given under

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       Act No. 280 of the Public Acts of 1939  THE SOCIAL WELFARE ACT,

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      1939 PA 280, MCL 400.1 TO 400.122.  An irrevocable prepaid

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      funeral contract made under this section  shall  IS not  be
   

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      subject to the cancellation provision of section 13 or to section

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      15(6).

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           (3) Notwithstanding any other provisions of this act, funds

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      paid in connection with an irrevocable prepaid funeral contract

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      may, at the option of the provider, be held and deposited in the

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      manner prescribed for a nonguaranteed price contract.



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           (4) The  department of social services  FAMILY INDEPENDENCE

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      AGENCY and department of  mental  COMMUNITY health may promulgate

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      rules under the administrative procedures act of 1969,  Act

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      No. 306 of the Public Acts of 1969, being sections 24.201 to

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      24.328 of the Michigan Compiled Laws  1969 PA 306, MCL 24.201 TO

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      24.328, to provide for the uniform administration of this

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      section.










































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