§ 1272. Rules; prepaid funeral funds
The Director shall adopt rules to carry out the provisions of this subchapter to ensure
the proper handling of all funds paid pursuant to a prepaid funeral agreement and
to protect consumers in the event of default. The rules shall include provisions relating
to the following:
(1) The timely establishment of escrow accounts and verification of the establishment
of an account. An escrow account shall be maintained by a federally insured depository
institution, but shall not be required to be maintained by a trust department, an
insurance company licensed to do business in Vermont that is a member of the Vermont’s
Property and Casualty Insurance Guaranty Association established by 8 V.S.A. chapter
101, subchapter 9, or a trust company chartered by the State of Vermont, if that insurance
or trust company is a federally insured depository.
(2) [Repealed.]
(3) Permissible investments to include demand and time deposits, certificates of deposit,
bonds of the United States or its agencies, bonds of the State of Vermont, bonds of
a Vermont municipality, and bonds in which savings banks in this State may, by law,
invest.
(4) The crediting of income earned by an escrow account, use of the taxpayer identification
number, and the deduction of reasonable administrative costs, taxes, and bank fees.
The beneficiary shall be considered to be the owner of irrevocable escrow accounts.
(5) Information to be provided the escrow agent by the funeral director and information
regarding the escrow account or the prepaid funeral that shall be made available to
the buyer on request and annually in a format as determined by the Director.
(6) Records to be kept, manner of disclosure, and clauses to be included in contracts,
including pre-need trust forms, and agreements. Records shall include a copy of the
prepaid arrangement check, which shall be kept in the prepaid account file maintained
by the funeral director.
(7) Preparation of appropriate tax and other reports.
(8) Other factors determined by the Director to be reasonably necessary to ensure the
security of the funds paid into an escrow account as part of a prepaid funeral arrangement.
(9) Establishment of a funeral services trust account.
(A) For purposes of funding the Funeral Services Trust Account, the Office shall assess
each funeral establishment or disposition facility a per funeral, burial, or disposition
fee of $6.00.
(B) The Account shall be administered by the Secretary of State and shall be used for
the sole purpose of protecting prepaid funeral contract holders in the event a funeral
establishment or disposition facility defaults on its obligations under the contract.
(C) The Account shall consist of all fees collected under this subdivision (9) and any
assessments authorized by the General Assembly. The principal and interest remaining
in the Account at the close of any fiscal year shall not revert but shall remain in
the Account for use in succeeding fiscal years.
(D) Notwithstanding the provisions of this subdivision (9) to the contrary, if the fund
balance at the beginning of a fiscal year is at least $200,000.00, no fees shall be
imposed during that fiscal year.
(E) Payments on consumer claims from the fund shall be made on warrants by the Commissioner
of Finance and Management, at the direction of the Director.
(F) When an investigation reveals financial discrepancies within a licensed establishment
or facility, the Director may order an audit to determine the existence of possible
claims on the Funeral Services Trust Account. In cases where both a funeral establishment
or disposition facility are involved in a disposition, the party receiving the burial
permit shall be responsible for the disposition fee. (Added 1991, No. 219 (Adj. Sess.), § 5, eff. Jan. 1, 1993; amended 1995, No. 138 (Adj. Sess.), § 8; 1997, No. 50, § 2, eff. June 26, 1997; 2001, No. 151 (Adj. Sess.), § 19, eff. June 27, 2002; 2005, No. 27, § 44a; 2009, No. 35, § 22; 2017, No. 144 (Adj. Sess.), § 15; 2021, No. 169 (Adj. Sess.), § 26, eff. January 1, 2023; 2025, No. 58, § 10, eff. July 1, 2025.)