Section 27-17A-33

Rights of purchaser; cancellation of contract; revocability. THIS SECTION WAS ASSIGNED BY THE CODE COMMISSIONER. THIS SECTION HAS NOT BEEN CODIFIED BY THE LEGISLATURE.

(a) A purchaser, by providing written notice to the certificate holder, may cancel a preneed contract within 30 days of the date that the contract was executed provided that the funeral merchandise and funeral services have not yet been used. Upon providing the notice, the purchaser shall be entitled to a complete refund of the amount paid, except for the amount allocable to any funeral merchandise or funeral services that have been used, and shall be released from all obligations under the contract. This subsection shall apply to all items that are purchased as part of a preneed contract.

(b) After 30 days from the date the preneed contract was executed, a purchaser, by providing written notice to the certificate holder, may cancel the funeral services, funeral merchandise, facilities, and cash advance items portions of a preneed contract at any time, and shall be entitled to the refund defined in the preneed contract allocable to those items. Any accumulated earnings allocable to the preneed contract shall be paid to the certificate holder upon the cancellation.

(c) Upon breach of contract or failure of the certificate holder to provide funeral merchandise or services under a preneed contract, the contract purchaser shall be entitled to a refund of 100 percent of all money paid on the contract. The refund shall be made within 30 days after receipt by the certificate holder of the contract purchaser's written request for refund.

(d) If a purchaser is 90 days past due in making payments on a preneed contract, the contract shall be considered to be in default, and the certificate holder shall be entitled to cancel the contract and withdraw all funds in trust. Upon making the withdrawal, the certificate holder shall refund to the purchaser the amount defined in the preneed contract in the event of default of the purchaser, provided that the certificate holder has provided the purchaser with 30 days' written notice of its intention to exercise any of its rights under this provision.

(e) All preneed contracts are cancelable and revocable as provided in this section during the lifetime of the purchaser, provided that a preneed contract does not restrict any contract purchaser who is a qualified applicant for, or a recipient of, supplemental security income, temporary cash assistance, or Medicaid from making his or her contract irrevocable.

(f) In the event that the preneed contract is made irrevocable pursuant to subsection (e), the purchaser or the authorizing agent shall have the right to appoint a provider other than the seller of the preneed contract. In the event that a provider is appointed pursuant to this subsection, the seller shall transfer to the appointed provider the amount paid by the purchaser less a reasonable transfer fee determined by the seller. No transfer hereunder shall occur without the acceptance of the appointed provider.

(g) All refunds required to be made under this section to a purchaser who has canceled a contract must be made within 30 days after the date the written notice of cancellation is received by the certificate holder.

(Act 2002-74, p. 221, § 1.)