§ 523a-201

523A.201 Establishment of trust funds. Unless proceeding under section 523A.401, 523A.402, or 523A.403, a seller must establish a trust fund prior to advertising, selling, promoting, or offering cemetery merchandise, funeralmerchandise, funeral services, or a combination thereof in this state as follows: 1. The trust fund must be established at a financial institution.2. If a seller agrees to furnish cemetery merchandise, funeral merchandise, funeral services, or a combination thereof and performance or delivery may be more than onehundred twenty days following the initial payment on the account, a minimum of eightypercent of all payments made under a guaranteed purchase agreement or a minimum of onehundred percent of all payments made under a nonguaranteed purchase agreement shall beplaced and remain in trust until the person for whose benefit the funds were paid dies. 3. If a purchase agreement for cemetery merchandise, funeral merchandise, funeral services, or a combination thereof provides that payments are to be made in installments,the seller shall deposit eighty percent of each payment made under a guaranteed purchaseagreement and one hundred percent of each payment made

of provides that payments are to be made in installments,the seller shall deposit eighty percent of each payment made under a guaranteed purchaseagreement and one hundred percent of each payment made under a nonguaranteedpurchase agreement in the trust fund until the full amount required to be placed in trust hasbeen deposited. If the purchase agreement is financed with or sold to a financial institution,the purchase agreement shall be considered paid in full and the trust requirements shall besatisfied within fifteen days after the seller receives funds from the financial institution. 4. A seller shall not invade the trust principal for any purpose.5. Unless a seller deposits all of each payment in a trust fund that meets the requirements of this section and section 523A.202, the seller shall have a fidelity bond or similar insurancein an amount of not less than fifty thousand dollars to protect against the loss of purchaserpayments not placed in trust within the time period required by this section and section523A.202. The commissioner may require a greater amount as the commissioner determinesis necessary.

of purchaserpayments not placed in trust within the time period required by this section and section523A.202. The commissioner may require a greater amount as the commissioner determinesis necessary. If the seller changes ownership, the fidelity bond or similar insurance shallcontinue in force for at least one year after the transfer of ownership. 6. Payments otherwise subject to this section are not exempt merely because they are held in certificates of deposit. 7. Commingling of trust funds with other funds of the seller is prohibited.8. Interest or income earned on amounts deposited in trust shall remain in trust under the same terms and conditions as payments made under the purchase agreement, exceptthat a seller may withdraw so much of the interest or income as represents the differencebetween the amount needed to adjust the trust funds for inflation as set by the commissionerbased on the consumer price index and the interest or income earned during the precedingyear not to exceed fifty percent of the total interest or income on a calendar-year basis. Theearly withdrawal of interest or income under this provision does not affect the purchaser’sright to a credit of such

exceed fifty percent of the total interest or income on a calendar-year basis. Theearly withdrawal of interest or income under this provision does not affect the purchaser’sright to a credit of such interest or income in the event of a nonguaranteed price agreement,cancellation, or nonperformance by such a seller. 9. The commissioner may require amendments to a trust agreement not in accord with the provisions of this chapter. 10. If a seller voluntarily or involuntarily ceases doing business and the seller’s obligation to provide merchandise or services has not been assumed by another seller holding a currentpreneed seller’s license, all trust funds, including accrued interest or income, shall be repaidto the purchaser within thirty days following the seller’s cessation of business. A sellermay petition the commissioner, upon a showing of good cause, for a longer period of timefor repayment. A seller shall notify the commissioner at least thirty days prior to ceasingbusiness. 2001 Acts, ch 118, §19; 2007 Acts, ch 175, §6 – 8; 2011 Acts, ch 62, §1, 2Referred to in §523A.202, 523A.203, 523A.207, 523A.503, 523A.807, 523A.811, 523A.901 Sat Dec 23 00:55:31 2023 Iowa Code 2024,

2001 Acts, ch 118, §19; 2007 Acts, ch 175, §6 – 8; 2011 Acts, ch 62, §1, 2Referred to in §523A.202, 523A.203, 523A.207, 523A.503, 523A.807, 523A.811, 523A.901 Sat Dec 23 00:55:31 2023 Iowa Code 2024, Section 523A.201 (20, 0)