Funeral Home (FHPB) Prepaid Benefit Permit

Disclaimer: The following is an overview of the laws pertaining to the permits.  Refer to the OSCN webpage to research all the statues pertaining to the permits.

Regulations:  36 OS 6121-3136.18 and OAC Subchapter 9, 365:25-9-1 to 365:25-9-8

Statutes

Rules

36 OS 6121:

Funeral Home Prepaid Benefits Permits are issued by funeral home legal name and physical address.  A funeral home with multiple locations will need to have a permit for each location that offers prepaid funeral benefits.  All permits issued pursuant to 36 OS 6121 shall be displayed in a conspicuous place on the premises of the organization.

36 OS 6124 Permit Application:

Cycle – January 1 to December 31

Fees – $50 initial/renewal prior to expiration

Late renewal $100 is submitted January 1 – 31st After that time, the permit will terminate, and the entity will need to submit a new application.

Application Requirements:

  • Initial or renewal application
  • Current Permit # (renewals only)
  • Legal name of the entity as registered with the Oklahoma Secretary of State
  • DBA/trade name of the entity
  • Funeral home location registered with the Oklahoma Funeral Board verified by their webpage
  • List each owner/operator, funeral director and complete a Biographical Affidavit for each (renewal application submit bios for new individuals only)
  • Address for this location (must match Funeral Board’s registered physical location)

36 OS 6125.2 Funding contracts – 2 options

  • Option 1 – Life insurance
    • Provide life insurance producer, Oklahoma license # and /or NPN and Biographical Affidavit
    • Copy of blank sales contracts for life products offered
    • List of existing contracts with current face value and client’s name (renewal only)
  • Option 2 -Trust fund
    • List financial institution(s) handling the trust
    • Copy Trust Agreement between financial institution and funeral home
    • One of the following: cash bond or fidelity bond or letter of credit ($300,000 or 15% of all funds collected for prepaid) whichever is les
    • List Designated Agent(s) responsible for depositing funds along with a Biographical Affidavits for each 36 OS 6126
    • Copy of blank preneed sales contracts used by the funeral home. Must be compliant with 36 OS 6125
    • List of existing contracts with current face value and client’s name

36 OS 6129 Annual Statement (renewal only)

Each organization which has outstanding contracts for prepaid funeral benefits shall maintain within this state such records as the Insurance Commissioner may require to enable the Insurance Commissioner to determine whether the organization is complying with the provisions of Sections 6121 through 6136 of this title. Each organization shall provide to the Insurance Commissioner an annual statement of the financial condition of funds collected pursuant to contracts for prepaid funeral benefits. The statement shall be due by the fifteenth day of March of each year and shall reflect, at a minimum, the assets and liabilities of each prepaid funeral benefits fund and the location and status of all trust funds for prepaid funeral benefits as of the last day of December of the preceding year. Failure to file an annual statement by the date required may result in censure, or suspension or revocation of license, and an administrative penalty imposed by the Insurance Commissioner of from One Hundred Dollars ($100.00) to One Thousand Dollars ($1,000.00) for each occurrence.  Annual reports are reviewed by the OID Financial Division for compliance.

365:25-9-8 and 36 OS 6136.18 Conversion from trust to insurance funded contracts

Convert from a trust funded prepaid funeral benefit to an insurance funded prepaid funeral benefit.

365:25-9-3 (3)

Applications for Conversion from a trust funded prepaid funeral benefit to an insurance-funded prepaid funeral benefit shall be filed with and approved by the Insurance Commissioner before any contracts covered by “The Act” may be converted. Applications for Conversion shall be filed using the Application for Conversion form as set forth in Appendix R of the Oklahoma Administrative Code

36 OS 6124.1 Transfer of Ownership Funeral Home Prepaid Benefits Permit.

A funeral home may transfer ownership of prepaid benefits by submitting the following required documents to the OID for review.  The transfer of benefits may not commence until approved by the OID.

Both the seller and buyer entity are required to be in good standing and registered with the Oklahoma Secretary of State and Oklahoma Funeral Board.

BUYER’S responsibility: 

  • Entity is required to be in good standing and registered with the Oklahoma Secretary of State and Oklahoma Funeral Board.
  • Submit the Funeral Home Prepaid Benefits initial application via OPTins. Complete the form in its’ entirety to avoid delays (requirements are detailed above)
  • Attach a copy of the purchase agreement between the buyer & seller for review by the OID Legal Division. The agreement will be examined to determine if the trusts and/or life insurance contracts are being transferred appropriately and defined in the purchase agreement.
  • Complete the Assumption Affidavit via OPTins.

SELLER’S responsibility: 

  • Complete Seller Notice to the Insurance Commissioner via OPTins.
  • Attach a copy of the purchase agreement between the buyer & seller for review by the OID Legal Division. The agreement will be examined to determine if the trusts and/or life insurance contracts are being transferred appropriately and defined in the purchase agreement.
  • Attach a list of outstanding life insurance contracts, include face value.
  • Attach a list of outstand trusts, include face value.

What to expect:  The RIS Division will try to review the application within 30 days of submission.  An email will be sent to the contact listed on the application when it is approved or if additional information is required.  You must respond within 30 days after the RIS Division sends you a missing information email.  No response to our request will cause the application to be denied without further notice.  We will review revised applications a maximum of 3 times.

Name &/or Address Change Request

A Funeral Home Prepaid Benefits Permit is issued using the legal name and physical address of the entity.  The name and/or address may be changed on a current permit by giving the OID 30 days written notice.  We will review the request for approval or denial.  Important:  The EIN must remain the same.   A change to the EIN will result in a new permit application being required.

Email the completed Name &/or Address Change Request form to RIS@oid.ok.gov .  Write NA if a field is not applicable, do not leave anything blank.

We will review the request and respond with an approval or denial within 15 business days.

If approved, the following must be completed:

    • The OID will change the name/address on the existing permit and send an approval to the entity
    • The entity must update the Oklahoma Secretary of State (SOS) registration for business entities immediately
    • The entity must update the Oklahoma Funeral Board registration immediately
    • We will verify that the Oklahoma SOS and Oklahoma Funeral Board registration were updated.

36 OS 6125 Disposition of funds:

A contract for Specific and Described Funeral Merchandise and Service at a Guaranteed Price. The provisions of this type of contract shall provide that interest paid by the organization upon monies deposited in trust shall be added to the principal and that principal and interest shall become available for disbursement to the organization upon the death of the beneficiary.

A contract establishing a fund for prepaid funeral benefits. The provisions of this type of contract shall require an initial minimum deposit of Twenty-five Dollars ($25.00) and shall grant the purchaser the right to add to the fund at the discretion of the purchaser. The provisions of this contract shall provide that the funds accumulated shall apply to the cost of the funeral services and merchandise selected and that any funds remaining unused shall be refunded to the purchaser or to the personal representative or designated beneficiary of the purchaser and if withdrawal of monies occurs prior to death, the organization may retain from the interest, all interest incurred in excess of the minimum amount payable pursuant to subsection D of this section less taxes and administrative fees. This type of contract shall also bear upon it the language: “Exact Funeral Merchandise and Services to be Selected at Time of Death”.

If an organization other than the organization with which the purchaser contracted provides funeral merchandise and services upon the death of the beneficiary of the contract, the organization with whom the purchaser contracted shall forward, upon receipt of request in writing from the purchaser or the personal representative of the purchaser, the net value of the contract plus the amount withheld pursuant to paragraph 1 of subsection A of this section to the organization which provided the merchandise and services or to the purchaser or the personal representative of the purchaser.