HBA-NLM H.B. 1635 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1635
By: Hupp
Financial Institutions
3/14/1999
Introduced



BACKGROUND AND PURPOSE 

In an effort to plan for the future, many Texans are buying prepaid funeral
contracts to lock into 
place prices for funeral services and to provide security against the
possible financial burdens of an unanticipated death.  However, Texans are
becoming more transient, which poses a problem for the purchaser of a
prepaid funeral contract. Since the contracts are usually nontransferable,
the purchaser's only option is to cancel the contract, which entitles them
to a 90 percent refund of the original amount, excluding interest.  Most
purchasers are not aware of this provision in a prepaid funeral contract.
The purpose of this bill is to place within the contract for prepaid
funeral services a clause that would ensure that the purchasers are aware
of provisions which may result in some financial repercussions. 

H.B. 1635 provides that a sales contract for prepaid funeral benefits must
contain, in boldfaced type, the provision that  unless the funeral provider
named in a contract agrees otherwise, the purchaser's use of a funeral
provider not named in the contract is a cancellation of the contract by the
purchaser. This bill also provides that if a contract is canceled by the
purchaser, the purchaser is not entitled to receive any earnings on the
amount deposited in trust pursuant to the contract. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 154.151(b), Finance Code, to provide that a
sales contract for prepaid funeral benefits must contain in immediate
proximity to the space reserved in the contract for the signature of the
purchaser a statement in boldfaced type of a minimum size of 10 points in
substantially the following form: 

"Unless the funeral provider named in this contract agrees otherwise, the
purchaser's use of a funeral provider not named in this contract is a
cancellation of this contract by the purchaser.  If this contract is
canceled by the purchaser, the purchaser is not entitled to receive any
earnings on the amount deposited in trust pursuant to this contract." 

Makes nonsubstantive changes.

SECTION 2.  Effective date: September 1, 1999. 
                       Makes application of this Act prospective.

SECTION 3.  Emergency clause.