                                 CODE OF VIRGINIA

REQUIREMENTS OF PRENEED FUNERAL CONTRACTS (§ 54.1-2820)

A. It shall be unlawful for any person residing or doing business within this
Commonwealth, to make, either directly or indirectly by any means, a preneed
funeral contract unless the contract:

   1. Is made on forms prescribed by the Board and is written in clear,
   understandable language and printed in easy-to-read type, size and style;

   2. Identifies the seller, seller&#8217;s license number and contract buyer and
   the person for whom the contract is purchased if other than the contract
   buyer;

   3. Contains a complete description of the supplies or services purchased;

   4. Clearly discloses whether the price of the supplies and services purchased
   is guaranteed and whether the guaranteed supplies and services have been
   secured by a declinable preneed funeral guarantee fee as defined in &#xA7;
   54.1-2800;

   5. States if funds are required to be trusted pursuant to &#xA7; 54.1-2822,
   the amount to be trusted, the name of the trustee, the disposition of the
   interest, the fees, expenses and taxes which may be deducted from the interest
   and a statement of the buyer&#8217;s responsibility for taxes owed on the
   interest;

   6. Contains the name, address and telephone number of the Board and lists the
   Board as the regulatory agency which handles consumer complaints;

   7. Provides that any person who makes payment under the contract may terminate
   the agreement at any time prior to the furnishing of the services or supplies
   contracted for except as provided pursuant to subsection B; if the purchaser
   terminates the contract within 30 days of execution, the purchaser shall be
   refunded all consideration paid or delivered, together with any interest or
   income accrued thereon; if the purchaser terminates the contract after 30
   days, the purchaser shall be refunded any amounts required to be deposited
   under &#xA7; 54.1-2822, together with any interest or income accrued thereon;

   8. Provides that if the particular supplies and services specified in the
   contract are unavailable at the time of delivery, the seller shall be required
   to furnish supplies and services similar in style and at least equal in
   quality of material and workmanship and the representative of the deceased
   shall have the right to choose the supplies or services to be substituted;

   9. Discloses any penalties or restrictions, including but not limited to
   geographic restrictions or the inability of the provider to perform, on the
   delivery of merchandise, services or prearrangement guarantee; and

   10. Complies with all disclosure requirements imposed by the Board.
   				If the contract seller will not be furnishing the supplies and services to
   the purchaser, the contract seller must attach to the preneed funeral contract
   a copy of the seller&#8217;s agreement with the provider.

B. Subject to the requirements of § 54.1-2822, a preneed funeral contract may
provide for an irrevocable trust or an amount in an irrevocable trust that is
specifically identified as available exclusively for funeral or burial expenses,
where:

   1. A person irrevocably contracts for funeral goods and services, such person
   funds the contract by prepaying for the goods and services, and the funeral
   provider residing or doing business within the Commonwealth subsequently
   places the funds in a trust; or

   2. A person establishes an irrevocable trust naming the funeral provider as
   the beneficiary; however, such person shall have the right to change the
   beneficiary to another funeral provider pursuant to &#xA7; 54.1-2822.

C. If a life insurance or annuity contract is used to fund the preneed funeral
contract, the face amount of any life insurance policy issued to fund a preneed
funeral contract shall not be decreased over the life of the life insurance
policy except for life insurance policies that have lapsed due to the nonpayment
of premiums or have gone to a nonforfeiture option that lowers the face amount
as allowed for in the provisions of the policy. The following must also be
disclosed as prescribed by the Board:

   1. The fact that a life insurance policy or annuity contract is involved or
   being used to fund the preneed contract;

   2. The nature of the relationship among the soliciting agent, the provider of
   the supplies or services, the prearranger and the insurer;

   3. The relationship of the life insurance policy or annuity contract to the
   funding of the preneed contract and the nature and existence of any guarantees
   relating to the preneed contract; and

   4. The impact on the preneed contract of (i) any changes in the life insurance
   policy or annuity contract including but not limited to changes in the
   assignment, beneficiary designation or use of the proceeds, (ii) any penalties
   to be incurred by the policyholder as a result of failure to make premium
   payments, (iii) any penalties to be incurred or moneys to be received as a
   result of cancellation or surrender of the life insurance policy or annuity
   contract, and (iv) all relevant information concerning what occurs and whether
   any entitlements or obligations arise if there is a difference between the
   proceeds of the life insurance policy or annuity contract and the amount
   actually needed to fund the preneed contract.

D. When the consideration consists in whole or in part of any real estate, the
contract shall be recorded as an attachment to the deed whereby such real estate
is conveyed, and the deed shall be recorded in the clerk&#8217;s office of the
circuit court of the city or county in which the real estate being conveyed is
located.

E. If any funeral supplies are sold and delivered prior to the death of the
subject for whom they are provided, and the seller or any legal entity in which
he or a member of his family has an interest thereafter stores these supplies,
the risk of loss or damage shall be upon the seller during such period of
storage.

HISTORY: 1989, c. 684; 1991, c. 721; 1992, c. 635; 1998, c. 738; 1999, c. 819;
2003, cc. 663, 673; 2007, c. 621; 2022, cc. 18, 641; 2024, c. 247.