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An Act
ENROLLED HOUSE
BILL NO. 1498 By: Chapman and Tedford of the
House
and
Reinhardt of the Senate
An Act relating to insurance; amending Section 4,
Chapter 346, O.S.L. 2024 (36 O.S. Supp. 2024, Section
673), which relates to information security;
modifying to whom certain information shall be
reported; amending 36 O.S. 2021, Section 2208, which
relates to duties of the Insurance Commissioner;
modifying duties; amending 36 O.S. 2021, Section
6121, which relates to permits required for prepaid
funeral services; modifying language to clarify
applicability; providing definition; requiring
response to inquiry; requiring notifying the
Insurance Commissioner of changes in certain
information; amending 36 O.S. 2021, Section 6124,
which relates to the acceptance of money for prepaid
funeral benefits; proscribing manner in which
applications for permits shall be filed; providing
procedures for certain expired permits; permitting
the Insurance Commissioner to suspend, revoke, or
refuse to renew permits; amending 36 O.S. 2021,
Section 6124.1, as amended by Section 15, Chapter
345, O.S.L. 2024 (36 O.S. Supp. 2024, Section
6124.1), which relates to the transfer of ownership
of prepaid funeral benefits; clarifying the manner in
which certain notice shall be provided; permitting
the Insurance Commissioner to take actions pursuant
to Articles 18 and 19 of Title 36 of the Oklahoma
Statutes; amending 36 O.S. 2021, Section 6124.2,
which relates to the application for change of name
of a prepaid funeral benefit permit holder; modifying
language for clarity; requiring additional
information; prohibiting conducting unpermitted
prepaid funeral benefit business; amending 36 O.S.
2021, Section 6125.2, which relates to funding
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prepaid funeral benefits contract by assignment of
life insurance proceeds; permitting assignment from
certain insurance policies and certain annuities;
amending 36 O.S. 2021, Section 6128, which relates to
annual report to Insurance Commissioner; clarifying
organization is responsible for transaction or other
applicable fees; amending 36 O.S. 2021, Section 6129,
which relates to maintenance of records; modifying
penalty; amending 36 O.S. 2021, Section 6130, which
relates to violations and penalties; permitting the
censure, suspension, revocation, or refusal of permit
after opportunity for hearing; amending 36 O.S. 2021,
Section 7125, which relates to permit applications
under the Cemetery Merchandise Trust Act; clarifying
manner in which applications shall be filed;
permitting reinstatement of certain expired permits;
clarifying no entitlement after revocation; requiring
submission of certain changes by permit holders;
requiring response to inquiry; amending 36 O.S. 2021,
Section 7127, which relates to surety bond in lieu of
trust requirement; modifying timeline for notice;
amending 36 O.S. 2021, Section 7128, which relates to
filing of annual report; clarifying report be filed
electronically; amending 36 O.S. 2021, Section 7131,
which relates to Insurance Commissioner's actions for
violations; clarifying violations; modifying minimum
penalty; amending 36 O.S. 2021, Section 7133, which
relates to failure to comply with Insurance
Commissioner examination; modifying penalties for
refusal or interference to examination; repealing 36
O.S. 2021, Sections 1106.1, 6813, 6814, and 6815; and
providing an effective date.
SUBJECT: Insurance
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY Section 4, Chapter 346, O.S.L.
2024 (36 O.S. Supp. 2024, Section 673), is amended to read as
follows:
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Section 673. A. Each licensee in this state shall develop,
implement, and maintain a comprehensive written information security
program based on the risk assessment of the licensee provided for in
this act and that contains administrative, technical, and physical
safeguards for the protection of nonpublic information and the
information systems of the licensee. The program shall be
commensurate with the size and complexity of the licensee, the
nature and scope of the activities of the licensee, including its
use of third-party service providers, and the sensitivity of the
nonpublic information used by the licensee or in the possession,
custody, or control of the licensee.
B. An information security program of a licensee shall be
designed to:
1. Protect the security and confidentiality of nonpublic
information and the security of the information systems;
2. Protect against any threats or hazards to the security or
integrity of nonpublic information and the information systems;
3. Protect against unauthorized access to or use of nonpublic
information, and minimize the likelihood of harm to any consumer;
and
4. Define and periodically reevaluate a schedule for retention
of nonpublic information and a mechanism for its destruction when no
longer needed.
C. The licensee shall:
1. Designate one or more employees, an affiliate, or an outside
vendor designated to act on behalf of the licensee who is
responsible for the information security program;
2. Identify reasonably foreseeable internal or external threats
that could result in unauthorized access, transmission, disclosure,
misuse, alteration, or destruction of nonpublic information
including, but not limited to, the security of information systems
and nonpublic information that are accessible to, or held by, third-
party service providers;
3. Assess the likelihood and potential damage of these threats,
taking into consideration the sensitivity of the nonpublic
information;
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4. Assess the sufficiency of policies, procedures, information
systems, and other safeguards in place to manage these threats,
including consideration of threats in each relevant area of the
operations of the licensee, including:
a. employee training and management,
b. information systems, including, but not limited to,
network and software design, as well as information
classification, governance, processing, storage,
transmission, and disposal, and
c. detecting, preventing, and responding to attacks,
intrusions, or other systems failures; and
5. Implement information safeguards to manage the threats
identified in its ongoing assessment, and no less than annually,
assess the effectiveness of the key controls, systems, and
procedures of the safeguards.
D. Based on the results of the risk assessment, the licensee
shall:
1. Design its information security program to mitigate the
identified risks, commensurate with the size and complexity of the
licensee, the nature and scope of the activities of the licensee
including its use of third-party service providers, and the
sensitivity of the nonpublic information used by the licensee or in
the possession, custody, or control of the licensee;
2. Determine and implement security measures deemed
appropriate, including:
a. place access controls on information systems including
controls to authenticate and permit access only to
authorized individuals to protect against the
unauthorized acquisition of nonpublic information,
b. identify and manage the data, personnel, devices,
systems, and facilities that enable the organization
to achieve business purposes in accordance with their
relative importance to business objectives and the
risk strategy of the organization,
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c. restrict physical access to nonpublic information to
authorized individuals only,
d. protect by encryption or other appropriate means, all
nonpublic information while being transmitted over an
external network and all nonpublic information stored
on a laptop computer or other portable computing or
storage device or media,
e. adopt secure development practices for in-house
developed applications utilized by the licensee,
f. modify the information system in accordance with the
information security program of the licensee,
g. utilize effective controls, which may include multi-
factor authentication procedures for any authorized
individual accessing nonpublic information,
h. regularly test and monitor systems and procedures to
detect actual and attempted attacks on, or intrusions
into, information systems,
i. include audit trails within the information security
program designed to detect and respond to
cybersecurity events and designed to reconstruct
material financial transactions sufficient to support
normal operations and obligations of the licensee,
j. implement measures to protect against destruction,
loss, or damage of nonpublic information due to
environmental hazards such as fire and water damage or
other catastrophic events or technological failures,
and
k. develop, implement, and maintain procedures for the
secure disposal of nonpublic information in any
format;
3. Include cybersecurity risks in the enterprise risk
management process of the licensee;
4. Stay informed regarding emerging threats or vulnerabilities
and utilize reasonable security measures when sharing information
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relative to the character of the sharing and the type of information
shared; and
5. Provide its personnel with cybersecurity awareness training
that is updated as necessary to reflect risks identified by the
licensee in the risk assessment.
E. If the licensee has a board of directors, the board or an
appropriate committee of the board, at a minimum, within one (1)
year of the effective date of this act July 1, 2024, shall:
1. Require the executive management of the licensee or its
delegates to develop, implement, and maintain the information
security program of the licensee;
2. Require the executive management of the licensee or its
delegates to report to the Insurance Commissioner board in writing,
at least annually, the following information:
a. the overall status of the information security program
and the compliance of the licensee with this act, and
b. material matters related to the information security
program, addressing issues such as risk assessment,
risk management and control decisions, third-party
service provider arrangements, results of testing,
cybersecurity events or violations and responses of
the management to those events or violations, and
recommendations for changes in the information
security program; and
3. If executive management delegates any of its
responsibilities, it shall oversee the development, implementation,
and maintenance of the information security program of the licensee
prepared by the delegate or delegates and shall receive a report
from the delegate or delegates complying with the requirements of
the report to the board.
F. A licensee shall exercise due diligence in selecting its
third-party service provider and shall require the provider to
implement appropriate administrative, technical, and physical
measures to protect and secure the information systems and nonpublic
information that are accessible to, or held by, the third-party
service provider.
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G. The licensee shall monitor, evaluate, and adjust, as
appropriate, the information security program consistent with any
relevant changes in technology, the sensitivity of its nonpublic
information, internal or external threats to information and the
changing business arrangements of the licensee, such as mergers and
acquisitions, alliances and joint ventures, outsourcing
arrangements, and changes to information systems.
H. As part of its information security program, each licensee
shall establish a written incident response plan designed to
promptly respond to, and recover from, any cybersecurity event that
compromises the confidentiality, integrity, or availability of
nonpublic information in its possession, the information systems of
the licensee, or the continuing functionality of any aspect of the
business or operations of the licensee.
The incident response plan shall address the following areas:
1. The internal process for responding to a cybersecurity
event;
2. The goals of the incident response plan;
3. The definition of clear roles, responsibilities, and levels
of decision-making authority;
4. External and internal communications and information
sharing;
5. Identification of requirements for the remediation of any
identified weaknesses in information systems and associated
controls;
6. Documentation and reporting regarding cybersecurity events
and related incident response activities; and
7. The evaluation and revision as necessary of the incident
response plan following a cybersecurity event.
I. Annually, each insurer domiciled in this state shall submit
to the Insurance Commissioner a written statement by April 15,
certifying that the insurer complies with the requirements set forth
in this section. Each insurer shall maintain, for examination by
the Insurance Department, all records, schedules, and data
supporting this certificate for a period of five (5) years. To the
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extent an insurer has identified areas, systems, or processes that
require material improvement, updating, or redesign, the insurer
shall document the identification and the remedial efforts planned
and underway to address such areas, systems, or processes. The
documentation shall be available for inspection by the Commissioner
upon request.
SECTION 2. AMENDATORY 36 O.S. 2021, Section 2208, is
amended to read as follows:
Section 2208. A. The Insurance Commissioner shall annually
review negotiations between the trust and any entity to provide
administrative, claim, underwriting or claim management services or
excess insurance, aggregate excess insurance and reinsurance to the
trust.
B. The Commissioner shall, at least twice yearly, review and
evaluate each category of operations of the trust or association as
follows:
1. Underwriting policies and activities, including all new
applications for coverage, as well as all decisions regarding denial
of new policies and surcharges on or nonrenewal of existing
insureds;
2. Summaries of all claims activities, including number of
claims filed, lawsuits filed, resolution of closed claims and
lawsuits, amounts paid in settlements, jury verdicts, defense
attorney fees, expert witness costs and other defense costs;
3. Consumer satisfaction with quality of service by the trust
or its agents;
4. Investment activities;
5. All filed base rates and proposed rate increases; and
6. All risk-management activities, including continuing
education and counseling of insureds.
C. The Commissioner shall further study and analyze the cost of
administration of the trust to determine how its administrative
costs compare to the administrative costs of other medical
professional liability trusts and insurers providing medical
liability coverage. The Commissioner shall submit a report of the
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Commissioner's study to the Governor, the President Pro Tempore of
the Senate and the Speaker of the House of Representatives no later
than February 1 of each year.
D. The trust shall provide the Commissioner with policy
changes, rate changes, rules proposed by the trust and changes to
the trust instrument prior to implementation of policy changes, rate
changes, proposed rules and changes to the trust instrument within
thirty (30) days of implementation of such changes.
SECTION 3. AMENDATORY 36 O.S. 2021, Section 6121, is
amended to read as follows:
Section 6121. A. Any individual, firm, partnership,
corporation, or association (hereinafter called "organization")
organization which shall offer for sale, accept money or anything of
value, or contract for prearranged, or prepaid funeral services, or
funeral service merchandise as defined in the Funeral Services
Licensing Act, or for any contract providing future funeral services
or funeral merchandise at a fixed price or at a cost plus a
percentage, or at retail price less a percentage discount, or
providing for any special consideration of any kind to be granted or
made available to the purchaser or holder of such contract, in this
state, under any sales contract, bond, certificate or other form of
written document providing for prepaid, discounted or otherwise
specially priced funeral or burial benefits or services or funeral
merchandise to be delivered at an undetermined future date dependent
upon the death of a contracting party or other person designated by
a contracting party (hereinafter called "prepaid funeral benefits")
shall first obtain a permit from the Insurance Commissioner
authorizing the transaction of this type of business before entering
into any such contract. It shall be unlawful to sell offer for
sale, accept money or anything of value for, or contract for prepaid
funeral benefits unless the seller holds without a valid, current
permit at the time the contract is made.
B. The Insurance Commissioner may deny the issuance of a permit
if the organization:
1. Makes a material misstatement or misrepresentation in an
application for a permit;
2. Fraudulently or deceptively obtains or attempts to obtain a
permit for another; or
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3. If any of its officers, owners, partners, or directors, or
other persons responsible for the conduct of its affairs and day-to-
day operations are determined by the Commissioner to not be
competent, trustworthy, financially responsible, and of good
personal and business reputation and character.
C. The Insurance Commissioner may approve an application of an
organization for a permit and deny the request of the organization
to act as a trustor if the organization, or any of its officers,
owners, partners, directors, or other persons responsible for the
conduct of its affairs and day-to-day operations, does not satisfy
all qualifications. This shall not hinder an organization from
entering into contracts funded by assignments of insurance.
D. All permits issued pursuant to the provisions of this
section shall be displayed in a conspicuous place at all times on
the premises of the organization. No organization may consent to,
or allow the use or display of, the permit by a person other than
the persons authorized to represent the organization in contracting
prepaid funeral benefits.
E. The organization shall not be entitled to enforce a contract
made in violation of the act, but the purchaser or the heirs of the
purchaser, or legal representative, shall be entitled to recover
triple the amounts paid to the organization with interest thereon at
the rate of six percent (6%) per annum under any contract made in
violation hereof.
F. For purposes of Sections 6121 through 6136.18 of this title,
the term "organization" shall mean a "funeral establishment", as
defined in the Funeral Services Licensing Act, in Section 396.2 of
Title 59 of the Oklahoma Statutes.
G. Each permit holder, upon receipt of any inquiry from the
Insurance Commissioner, shall, within twenty (20) days from the date
of receipt of the inquiry, furnish the Insurance Commissioner with
an adequate response to the inquiry.
H. Each permit holder shall electronically notify the Insurance
Commissioner, in the manner and form prescribed by the Insurance
Commissioner, along with any applicable fees, of any change in
address or contact information within thirty (30) days of the
change. Any submission of a change of legal business name, dba or
assumed name, address or email address received more than thirty
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(30) days after the change occurred shall be accompanied by a fee of
Fifty Dollars ($50.00).
SECTION 4. AMENDATORY 36 O.S. 2021, Section 6124, is
amended to read as follows:
Section 6124. A. Each organization desiring to accept money or
anything of value for prepaid funeral benefits or an agreement to
provide funeral benefits in the future at a fixed or predetermined
cost, shall file an application Applications for a permit shall be
filed electronically with the Insurance Commissioner, in the manner
and form prescribed by the Insurance Commissioner, and shall at the
time of filing an application pay one initial include a filing fee
of Fifty Dollars ($50.00) along with any transaction or other
applicable fees. The Insurance Commissioner shall may issue a
permit upon:
1. The receipt of the application and payment of the filing
fee;
2. Determination that the organization is in good standing as a
funeral establishment with the Oklahoma Funeral Board; and
3. Making a finding that the organization has complied with
this act and the rules promulgated under this act by the Insurance
Commissioner. All applications shall be signed by the organization
requesting the permit, and shall contain a statement that the
organization will comply with all the requirements as established by
this act. All permits shall expire annually on December 31 of the
year the permit is first issued, unless renewed; permits may be
renewed for a period not to exceed the succeeding December 31 upon
the payment of a renewal fee of Fifty Dollars ($50.00). Late
application for renewal of a permit shall require a fee of double
the renewal fee. No application for renewal of a permit shall be
accepted after January 31 of each year. The Insurance Commissioner
may authorize acceptance of a new permit application pursuant to
this section prior to the expiration of the one-year period upon
good cause shown A permit expired for failure to submit a renewal
application may be reinstated within ninety (90) days after the
expiration date by electronically submitting a fee in an amount that
is double the renewal fee and a renewal application in the form and
manner prescribed by the Insurance Commissioner, along with any
transaction or other applicable fees. A permit holder whose permit
has been expired for more than ninety (90) days shall reapply as if
they were a new applicant and pay an application fee equal to an
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amount that is double the renewal fee in addition to any fines
imposed. All applications received after the permit has been
expired for more than ninety (90) days shall include a detailed
report in the form and manner prescribed by the Insurance
Commissioner of any prepaid funeral benefits offered or provided in
this state during the period of the expired permit.
B. The Insurance Commissioner may cancel suspend, revoke, or
refuse to renew a permit or refuse to issue a permit or refuse to
issue a renewal of a permit for failure to comply with any provision
of this act, or any valid rule, which the Insurance Commissioner has
promulgated, after reasonable notice to the organization and after
hearing if the organization requests and opportunity for a hearing.
When the Insurance Commissioner cancels suspends or revokes a permit
or refuses to issue a renewal of a permit for a violation as
provided by this subsection, the Insurance Commissioner shall notify
the Oklahoma Funeral Board of the action and the nature of any
violations.
C. No organization shall be entitled to a new permit for a
period of one (1) year after cancellation revocation or refusal by
the Insurance Commissioner to issue or renew the permit of the
organization, but shall thereafter be entitled to a new permit upon
satisfactory proof of compliance with this law after the expiration
of the one-year period.
D. Any person or organization aggrieved by the actions of the
Insurance Commissioner may appeal therefrom as provided by Article
II of the Administrative Procedures Act.
SECTION 5. AMENDATORY 36 O.S. 2021, Section 6124.1, as
amended by Section 15, Chapter 345, O.S.L. 2024 (36 O.S. Supp. 2024,
Section 6124.1), is amended to read as follows:
Section 6124.1. A. No prepaid funeral benefit permit shall be
transferable from one organization to another except as provided in
this section. The selling organization shall notify the Insurance
Commissioner at least forty-five (45) days prior to transfer of
ownership. Notification shall be electronic in a the manner and
form provided prescribed by the Insurance Commissioner and shall
contain at a minimum the following information:
1. The name of the acquiring organization;
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2. The date the acquiring organization will take control of the
funeral establishment selling organization;
3. A listing of all unrealized prepaid funeral benefit
contracts funded by insurance assignments;
4. A listing of all unrealized prepaid funeral benefit
contracts funded by trusts;
5. A detailed description of existing trusts to include, but
not be limited to, the name of the contract holder and the trust
value per contract; and
6. Any other information the Insurance Commissioner may
request.
B. The Insurance Commissioner may waive or lessen the notice
requirement provided for in subsection A of this section upon good
cause shown.
C. The acquiring organization shall make application for a
permit at least thirty (30) days prior to the transfer of ownership.
Approval is contingent upon the acquiring organization receiving an
establishment license as provided for in Sections 395.1 through
396.33 of Title 59 of the Oklahoma Statutes. The permit application
shall include an assumption agreement executed by the acquiring
organization in a form provided by the Insurance Commissioner and
the selling organization.
D. The acquiring organization shall be issued a prepaid funeral
benefit permit prior to the relinquishment of control of the trust
by the selling organization. The acquiring organization shall not
access funds held in the trust until authorization has been given by
the Insurance Commissioner.
E. Upon good cause shown, the Insurance Commissioner may deny
transfer of the trust from the selling organization to the acquiring
organization.
F. The Insurance Commissioner may assume the role of acting
trust conservator take any actions pursuant to Articles 18 and 19 of
this title as a means of safeguarding the rights and interests of
the individual contract holders or purchasers, their beneficiaries,
successors, or personal representatives, or whenever necessary to
protect the public welfare. The organization may make application
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to the Insurance Commissioner to draw down funds upon fulfillment of
the prepaid funeral service contract.
G. Whenever a prepaid funeral benefit permit holder an
organization refuses to submit the books, records, papers and
instruments of the prepaid funeral benefit contracts to the
examination and inspection of the assistants or examiners of the
Insurance Commissioner, or refuses or neglects to establish or
maintain a prepaid funeral benefit permit in accordance with the
requirements of the Prepaid Funeral Benefits Act within ninety (90)
days after a written demand to establish or maintain a prepaid
funeral benefit permit is made by the Insurance Commissioner, or in
any manner obstructs or interferes with the examination of its
prepaid funeral benefit contracts or refuses to be examined on oath
concerning any of the affairs of its prepaid funeral benefit
contracts, or for any other grounds listed in Article 18 or 19 of
this title, the Insurance Commissioner may make application for
receivership in the manner of a domestic insurer or take any other
action pursuant to Articles 18 and 19, Sections 1901 through 1920 of
this title, in addition to the penalties and other enforcement
provisions of this act.
H. The Insurance Commissioner may prescribe rules concerning
matters incidental to this section.
I. For the purposes of Sections 6121 through 6136.18 of this
title, "personal representative" means the person or persons
designated by the purchaser of the contract for prepaid funeral
benefits as having rights of ownership and control to the prepaid
funds upon death of the purchaser; the guardian, executor, or the
personal representative of the estate of the purchaser; or the
claiming successor or successors establishing lawful right to the
prepaid funds in accordance with Section 393 of Title 58 of the
Oklahoma Statutes.
SECTION 6. AMENDATORY 36 O.S. 2021, Section 6124.2, is
amended to read as follows:
Section 6124.2. A. No prepaid funeral benefit permit holder
organization shall change the name under which the permit holder
operates it sells prepaid funeral benefits except as provided in
this section. The prepaid funeral benefit permit holder
organization shall obtain approval from the Insurance Commissioner
at least thirty (30) days prior to changing the name of the permit
holder. The application for change of name of a prepaid funeral
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benefit permit holder shall be in a the manner and form provided
prescribed by the Insurance Commissioner and shall contain, at a
minimum, the following information:
1. The name of the organization as it currently appears on its
permit holder;
2. The proposed new name of the permit holder organization; and
3. The proposed date the name change will become effective;
4. The business address of the organization; and
5. The organization's primary email address.
B. The Insurance Commissioner may waive the approval
requirement provided for in subsection A of this section upon good
cause shown.
C. The Insurance Commissioner may deny the organization's
change of name of the prepaid funeral benefit permit holder upon
good cause shown.
D. C. Upon approval of a change of name, the Insurance
Commissioner shall issue a prepaid funeral benefit permit with the
new name. The prepaid funeral benefit permit holder
D. Every organization shall display in a conspicuous place at
all times on the premises of the organization all permits issued
pursuant to the provisions of this section act. No organization may
consent to or allow the use or display of the permit by a person
other than the persons authorized to represent the organization in
contracting prepaid funeral benefits.
E. The Insurance Commissioner may prescribe promulgate rules
concerning matters incidental to this section.
F. Organizations shall not conduct prepaid funeral benefit
business under any name or at a different business address other
than that specified in the permit.
SECTION 7. AMENDATORY 36 O.S. 2021, Section 6125.2, is
amended to read as follows:
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Section 6125.2. A. Contracts for prepaid funeral benefits
provided for pursuant to Section 6125 of this title may be funded by
assignments of life insurance proceeds from either a standard life
or accident insurance policy or an individual or group fixed annuity
to the contracting organization.
B. A guaranteed contract for prepaid funeral benefits provided
for pursuant to paragraph 1 of subsection B of Section 6125 of this
title which is to be funded by assignment of life insurance proceeds
from either a standard life or accident insurance policy or an
individual or group fixed annuity shall provide that:
1. The contract be funded by a life an insurance policy or
annuity issued in the face amount of the current purchase price of
the contract for prepaid funeral benefits;
2. All accrued benefits under the insurance policy or annuity
shall become available for disbursement to the organization upon the
death of the purchaser or designated beneficiary of the prepaid
funeral contract;
3. The purchaser or designated beneficiary shall be the same
individual under the contract named as the insured or designated
beneficiary under the life insurance policy or annuity; and
4. The disbursement of life insurance or annuity proceeds to
the organization shall constitute payment in full to the
organization for the services and merchandise contracted for prepaid
funeral benefits.
C. A nonspecified contract for prepaid funeral benefits
provided for pursuant to paragraph 2 of subsection B of Section 6125
of this title which is to be funded by assignment of life insurance
proceeds from either a standard life or accident insurance policy or
an individual or group fixed annuity shall provide that:
1. The total proceeds paid to the organization under the
insurance policy or annuity shall not exceed the actual retail cost
of the funeral services and merchandise at the time of delivery;
2. Any funds remaining unused shall be refunded to the
purchaser or to, the personal representative of the purchaser or the
designated beneficiary; and
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3. After November 1, 2009, all price lists reflecting the
actual retail cost of funeral services and merchandise used at the
time of the delivery of services shall be retained for a period of
at least six (6) years.
D. A violation of this section shall constitute a misdemeanor
and shall be punished by a fine of not less than One Hundred Dollars
($100.00) nor more than Five Hundred Dollars ($500.00) or by
imprisonment in the county jail for not less than one (1) month nor
more than six (6) months, or by both such fine and imprisonment.
SECTION 8. AMENDATORY 36 O.S. 2021, Section 6128, is
amended to read as follows:
Section 6128. Each organization shall file an annual report
with the Insurance Commissioner on or before March 15 of each year
in such form as the Insurance Commissioner may require, showing the
names and addresses of all persons with whom contracts for prepaid
funeral benefits have been made prior to December 31 of the
preceding year which had not been fully discharged on December 31
and, also showing the date of the contract, the name of the bank or
depository holding the trust fund and the amount of the trust fund
under each contract on the preceding December 31. Any organization
which has discontinued the sale of prepaid funeral benefits, but
which still has outstanding contracts, shall not be required to
obtain a renewal of its permit, but it shall continue to make annual
reports to the Insurance Commissioner until all such contracts have
been fully discharged. A filing fee of Fifty Dollars ($50.00),
along with any transaction or other applicable fees, shall accompany
each report. If any officer of any organization fails or refuses to
file an annual report, or to cause it to be filed within thirty (30)
days after he or she has been notified by the Insurance Commissioner
that the report is due and has not been received, he or she shall be
guilty of a misdemeanor and shall be punished as prescribed in
Section 6130 of this title.
SECTION 9. AMENDATORY 36 O.S. 2021, Section 6129, is
amended to read as follows:
Section 6129. 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 6136.18
of this title. Each organization shall provide to the Insurance
ENR. H. B. NO. 1498 Page 18
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 the permit, and or an administrative penalty
imposed by the Insurance Commissioner of from One Hundred Dollars
($100.00) to not to exceed One Thousand Dollars ($1,000.00) for each
occurrence, or be subject to both penalty and punishment.
SECTION 10. AMENDATORY 36 O.S. 2021, Section 6130, is
amended to read as follows:
Section 6130. A. Any officer, director, agent, or employee of
any organization subject to the terms of Sections 6121 through
6136.18 of this title who makes or attempts to make any contract in
violation of the provisions of Sections 6121 through 6136.18 of this
title, or who refuses to allow an inspection of the records of the
organization, or who violates any other provision of Sections 6121
through 6136.18 of this title, upon conviction, shall be guilty of a
felony and shall be punished by imprisonment in the custody of the
Department of Corrections for a term of not more than ten (10)
years, and a fine not exceeding Ten Thousand Dollars ($10,000.00),
and ordered to pay restitution to the victim. Each violation of any
provision of Sections 6121 through 6136.18 of this title shall be
deemed a separate offense and prosecuted individually.
B. The violation of any provision of Sections 6121 through
6136.18 of this title shall constitute a cause for the Oklahoma
Funeral Board to revoke, or to refuse to issue or renew, any license
issued pursuant to the provisions of Sections 396 through 396.33 of
Title 59 of the Oklahoma Statutes. The violation of any provision
of Sections 6121 through 6136.18 of this title shall constitute a
cause for the Insurance Commissioner to issue a notice and order to
show cause why the licensee shall not be censured, have the license
of the licensee suspended or revoked, be subject to, after
opportunity for hearing, censure, suspend, revoke, or refuse to
issue or renew a permit, issue a fine of not less than One Hundred
Dollars ($100.00) and not more than One Thousand Dollars ($1,000.00)
for each occurrence, or be subject to both such fine and punishment.
ENR. H. B. NO. 1498 Page 19
SECTION 11. AMENDATORY 36 O.S. 2021, Section 7125, is
amended to read as follows:
Section 7125. A. Each organization desiring to accept money or
anything of value for prepaid cemetery merchandise shall file an
application for a permit with the Insurance Commissioner, and shall
at the time of filing the application pay one initial filing fee of
Two Hundred Dollars ($200.00). All applications shall be filed
electronically in the manner and form prescribed by the
Commissioner, along with any applicable transaction or other fees.
The Commissioner shall may issue a permit upon the receipt of the
application, the annual report in accordance with Section 7128 of
this title and payment of the filing fee fees, and upon making a
finding that the applicant has complied with the Cemetery
Merchandise Trust Act and the rules as may be established pursuant
to the Cemetery Merchandise Trust Act by the Commissioner. All
applications shall be signed by the organization requesting the
permit, and shall contain a statement that the applicant will comply
with all the requirements as established pursuant to the Cemetery
Merchandise Trust Act. All permits shall expire on March 15 of the
year following the year the permit is first issued, unless renewed.
Permits shall may be renewed for a period not to exceed the
succeeding March 15 upon the payment of a renewal fee of Two Hundred
Dollars ($200.00). Late application for renewal of a permit shall
require a fee of double the renewal fee. No application for renewal
of a permit shall be accepted after April 15 of each year. Late
applicants shall be required to reapply as if they were a new
applicant, and pay an application fee equal to an amount that is
double the renewal fee in addition to any fines that may have been
imposed with respect to an expired permit Any permit expired for
failure to submit a renewal application may be reinstated within
ninety (90) days after the expiration date by electronically
submitting a fee in an amount that is double the renewal fee and a
renewal application in the form and manner prescribed by the
Insurance Commissioner, along with any transaction or other
applicable fees. The Insurance Commissioner shall require a permit
holder whose permit has been expired for more than ninety (90) days
to reapply as if they were a new applicant and pay an application
fee equal to an amount that is double the renewal fee in addition to
any fines imposed. All applications received after the permit has
been expired for more than ninety (90) days shall include a detailed
report of services provided in this state during the period of
expired permit.
ENR. H. B. NO. 1498 Page 20
B. The Commissioner may cancel a permit or suspend, revoke,
refuse to issue a permit, or refuse to issue a renewal of renew a
permit for failure to comply with any provisions of the Cemetery
Merchandise Trust Act or any rules promulgated thereto by the
Commissioner, after reasonable notice to the permittee and
opportunity for hearing before the Commissioner in accordance with
Article II of the Administrative Procedures Act.
C. No organization shall be entitled to a new permit after
cancellation revocation, or refusal by the Commissioner to renew a
permit, but shall may thereafter be issued a new permit upon
satisfactory proof of compliance with the Cemetery Merchandise Trust
Act and the rules promulgated thereto.
D. Any person or An organization aggrieved by the actions of
the Commissioner may appeal therefrom to the Oklahoma Insurance
Department as provided by the Administrative Procedures Act.
E. Each permit holder shall electronically submit, in a form
and manner prescribed by the Insurance Commissioner, along with any
applicable fees, any change of legal business name, dba or assumed
name, address, or email address within thirty (30) days after the
change occurred. Any submission of a change of legal business name,
dba or assumed name, address, or contact eemail address received
more than thirty (30) days after the change occurred shall be
accompanied by a fee of Fifty Dollars ($50.00).
F. Every permit holder, upon receipt of any inquiry from the
Insurance Commissioner, shall, within twenty (20) days from the date
of receipt of the inquiry, furnish the Insurance Commissioner with
an adequate response to the inquiry.
SECTION 12. AMENDATORY 36 O.S. 2021, Section 7127, is
amended to read as follows:
Section 7127. A. As an alternative to the trust requirements
of Section 7126 of this title, an organization may purchase a surety
bond in an amount not less than the minimum funding requirement.
B. The surety bond shall be made payable to the State of
Oklahoma for the benefit of the Insurance Commissioner and all
purchasers of prepaid cemetery merchandise. The bond shall be
approved by the Commissioner.
ENR. H. B. NO. 1498 Page 21
C. The Commissioner may establish by rule the requirements and
guidelines for the surety bonds required pursuant to this section.
D. A surety bond maintained under the provisions of this
section or Section 7124 of this title may be cancelled or terminated
by the surety only by providing notice to the Commissioner, no later
than ninety (90) thirty (30) days before the effective date of the
cancellation or termination. Notwithstanding the cancellation,
termination, or expiration of a bond maintained under this section
or Section 7124 of this title, the surety shall remain liable for
obligations arising during the term of the bond and prior to the
termination, cancellation or expiration.
SECTION 13. AMENDATORY 36 O.S. 2021, Section 7128, is
amended to read as follows:
Section 7128. Each organization shall electronically file an
annual report with the Insurance Commissioner on or before March 15
of each year in a the manner and form as the Commissioner may
require, showing the name of the financial institution holding the
cemetery merchandise trust fund and the amount of the trust fund
under each contract on the preceding December 31, and also showing
the method of determination of the wholesale costs made pursuant to
Section 7126 of this title. The total required deposits to the
cemetery merchandise trust fund during the year shall also be
reported. Each cemetery is responsible for maintaining satisfactory
books and records, which will adequately justify all information
contained in the annual report required by this section. Any
organization which has discontinued the sale of prepaid cemetery
merchandise, but which still has funds deposited in a cemetery
merchandise trust fund or surety, shall not be required to obtain a
renewal of its permit, but it shall continue to make annual reports
to the Commissioner until all the funds have been disbursed pursuant
to the Cemetery Merchandise Trust Act. A filing fee of Two Hundred
Dollars ($200.00), along with any applicable transaction or other
fees, shall accompany each report. If any officer of any
organization fails or refuses to file an annual report, or fails or
refuses to cause it to be filed within thirty (30) days after the
organization has been notified by the Commissioner that the report
is due and has not been received, the officer shall be guilty of a
misdemeanor and shall be punished as prescribed in Section 7134 of
this title.
SECTION 14. AMENDATORY 36 O.S. 2021, Section 7131, is
amended to read as follows:
ENR. H. B. NO. 1498 Page 22
Section 7131. A. The Insurance Commissioner, may, after notice
and an opportunity for hearing, initiate an action to recover
payments required to be redeposited to the cemetery merchandise
trust pursuant to the Cemetery Merchandise Trust Act or to recover
other monies received or disbursed in violation of the Cemetery
Merchandise Trust Act.
B. The Commissioner may, after an opportunity for hearing,
censure a permittee or may suspend or revoke a permit for violation
of any provision of the Cemetery Merchandise Trust Act or the rules
promulgated thereto. In addition to, or in lieu of, any censure,
suspension or revocation, a permittee may be subject to a civil
penalty of not less than One Hundred Dollars ($100.00) nor more than
One Thousand Dollars ($1,000.00) per occurrence or violation.
SECTION 15. AMENDATORY 36 O.S. 2021, Section 7133, is
amended to read as follows:
Section 7133. Whenever any officer of any organization refuses
to submit the books, records, papers and instruments of an
organization to the examination and inspection of the assistants or
examiners of the Insurance Commissioner, or refuses or neglects to
establish or maintain a cemetery merchandise trust fund in
accordance with the requirements of the Cemetery Merchandise Trust
Act within ninety (90) days after a written demand to establish or
maintain a cemetery merchandise trust fund is made by the
Commissioner, or in any manner obstructs or interferes with the
examination of its cemetery merchandise trust fund, or refuses to be
examined on oath concerning any of the affairs of its cemetery
merchandise trust fund, the Commissioner may make application for
receivership in the manner of a domestic insurer pursuant to
Sections 1901 through 1920 of Title 36 this title of the Oklahoma
Statutes, in addition to the penalties and other enforcement
provisions of the Cemetery Merchandise Trust Act.
SECTION 16. REPEALER 36 O.S. 2021, Sections 1106.1,
6813, 6814, and 6815 are hereby repealed.
SECTION 17. This act shall become effective November 1, 2025.
ENR. H. B. NO. 1498 Page 23
Passed the House of Representatives the 24th day of March, 2025.
Presiding Officer of the House
of Representatives
Passed the Senate the 28th day of April, 2025.
Presiding Officer of the Senate
OFFICE OF THE GOVERNOR
Received by the Office of the Governor this ____________________
day of ___________________, 20_______, at _______ o'clock _______ M.
By: _________________________________
Approved by the Governor of the State of Oklahoma this _________
day of ___________________, 20_______, at _______ o'clock _______ M.
_________________________________
Governor of the State of Oklahoma
OFFICE OF THE SECRETARY OF STATE
Received by the Office of the Secretary of State this __________
day of ___________________, 20_______, at _______ o'clock _______ M.
By: _________________________________