This is an official version.
Copyright © 2000: Queens Printer,
Statutes of Newfoundland 2000
AN ACT RESPECTING PREPAID
(Assented to May 12, 2000)
1. Short title
5. Assurance fund
6. Seller trust fund
7. Seller requirements
11. Seller to provide services
13. Search with warrant
15. Fees and forms
Be it enacted by the Lieutenant-Governor and House of Assembly in Legislative Session convened, as follows:
1. This Act may be cited as the Prepaid Funeral Services Act.
2. In this Act
(a) "association" means the Newfoundland and Labrador Funeral Services Association Inc. incorporated under the Corporations Act;
(b) "assurance fund" means the Consumer Protection Fund for Prepaid Funerals established under section 5;
(c) "beneficiary" means a person who is named in a prepaid funeral contract on whose death funeral services are to be performed or funeral goods are to be provided or delivered under that contract;
(d) "buyer" means a person, whether or not he or she is a beneficiary, who purchases funeral services or funeral goods under a prepaid funeral contract;
(e) "department" means the department presided over by the minister;
(f) "financial institution" means a financial institution as defined in the Bank Act (Canada), a credit union operating under the Credit Union Act and a corporation licensed under the Trust and Loan Corporations Licensing Act;
(g) "funds" means all money or other consideration received as payment for a prepaid funeral contract and all interest accrued or earned on that money or other consideration;
(h) "funeral goods" means those items of merchandise sold or offered for sale directly to the public that will be used in connection with a funeral or an alternative or final disposition of human remains;
(i) "funeral services" means the
(i) care and preparation of human remains, and
(ii) co-ordination of rites and ceremonies in connection with the disposition of human remains,
and other services to be performed, made available or provided by a seller and carried out at the request of a person responsible for funeral and disposition arrangements of the human remains;
(j) "licence" means a licence issued under section 3;
(k) "minister" means the minister appointed under the Executive Council Act to administer this Act;
(l) "prepaid funeral contract" means a contract, agreement or a series or combination of contracts or agreements other than a contract of insurance issued by an insurer licensed under the Insurance Companies Act
(i) under which a seller promises, for a specified monetary consideration paid in advance of death in a lump sum or by instalments, to provide or make available funeral services or funeral goods for use at a time determinable by the death of the beneficiary,
(ii) that is a prepaid, prearranged deposit contract, where the funds are left with the seller and are to be used towards the eventual costs of funeral goods and funeral services on behalf of the beneficiary,
(iii) that is a prepaid, prearranged trust contract where the buyer and the seller have a fixed agreement for the provision, on behalf of the beneficiary, of funeral goods and funeral services specified in the contract, or
(iv) under which, for monetary consideration, a seller provides counselling or advice to a person with respect to funeral services or funeral goods; and
(m) "seller" means a person who, as a seller or provider of or the person undertaking to provide counselling, advice, funeral services or funeral goods, enters into, proposes to enter into or solicits another person to enter into a prepaid funeral contract.
3. (1) A person may, in writing, apply to the minister for and the minister may issue to that person a licence to be a seller.
(2) A person applying under subsection (1) shall provide to the minister
(a) copies of proposed prepaid funeral contracts;
(b) the required fee; and
(c) other records and documents that are required by regulation.
(3) The minister may refuse to issue a licence to a person and may cancel the licence of a licensee where the minister is of the opinion that a
(a) person has made a false or misleading statement in the application for a licence or in documents in support of that application;
(b) person applying for a licence or a licensee cannot meet or no longer meets the requirements of this Act with respect to the assurance fund, a trust fund or other requirements under this Act.
(4) Where the minister is satisfied that a seller does not comply with this Act or is not able to carry out the obligations imposed upon the seller under this Act, he or she may order that seller to take the remedial action that is necessary to bring the licensee into compliance with this Act and for that purpose may direct that an auditor perform an audit and inspect the books, documents and other records of the seller that relate to prepaid funeral contracts.
(5) The seller who is the subject of the audit and inspection shall pay the remuneration and expenses of an auditor directed under subsection (4).
(6) A seller and an operator or employee of the sellerís place of business shall give the auditor directed under subsection (4) reasonable help to enable the auditor to carry out his or her duties and shall provide information that the auditor may reasonably require.
4. (1) A person shall not act as a seller or otherwise sell, offer to sell or arrange the sale of a prepaid funeral contract or prepaid funeral service unless that person holds a licence issued under section 3 and is acting in accordance with this Act.
(2) This section and section 3 do not apply to a person acting as an agent or salesperson of a seller who holds a licence issued under this Act.
5. (1) The minister shall establish an assurance fund to be known as the Consumer Protection Fund for Prepaid Funeral Services for the purpose of paying in whole or in part, claims arising out of a prepaid funeral contract against a person who holds or held a licence issued under this Act.
(2) The assurance fund shall consist of money paid into it by sellers in accordance with the regulations and interest, dividends and other returns earned upon the investment of money in the assurance fund.
(3) The minister, or, where the minister directs, the association, or the board established under subsection (4), shall, in accordance with the regulations, be responsible for the financial management and administration of and disbursement of payments from the assurance fund.
(4) The minister may establish a board of not fewer than 5 and not more than 10 persons to administer the assurance fund.
(5) The assurance fund shall be held in trust for those persons, who, in accordance with the regulations, are entitled to receive payments out of the assurance fund.
(6) Money in the assurance fund shall be invested in investments authorized by the Trustee Act.
(7) The costs and expenses in administering the assurance fund may, in accordance with the regulations, be paid out of the assurance fund to the minister, the association, or the board, whichever is administering the fund.
(8) The assurance fund shall, in accordance with the regulations, be audited annually and a report on that audit shall be submitted to the minister not more than 90 days after the end of the preceding fiscal year established for the assurance fund.
Seller trust fund
6. (1) A seller shall establish with a financial institution a trust fund that shall be kept separate and apart from all other money in the sellerís control and that trust fund shall have deposited with it all
(a) funds paid to or collected by the seller with respect to a prepaid funeral contract; and
(b) money paid to the seller under an insurance or other agreement or contract by which the seller is required to use that money to provide funeral goods or funeral services to a person.
(2) All funds deposited in trust under subsection (1) shall be held in trust for the buyers and beneficiaries of prepaid funeral contracts and shall be invested in investments authorized by the Trustee Act.
(3) Notwithstanding subsection (2), the costs and expenses of the administration of funds deposited in trust under this section may, in accordance with the regulations be paid out of the trust fund to the trust administrator.
(4) A seller shall annually prepare and submit to the minister a report on the prepaid funeral contracts entered into and the trust funds established under this section for the year immediately preceding that date.
7. (1) A seller shall provide a copy of the executed prepaid funeral contract to the buyer immediately upon execution of the contract.
(2) A seller shall maintain, in the required form, records with respect to each prepaid funeral contract and every contract of insurance under which funds and proceeds have been placed in trust under subsection 6(1).
(3) A seller shall not withdraw funds deposited in a trust account under subsection 6(1) unless the conditions required under this Act have been met and until the prepaid funeral contract has been
(a) fully performed by the seller;
(b) rescinded under section 9; or
(c) cancelled under section10.
(4) Funds deposited in a trust account under section 6 that are not withdrawn by a seller as permitted under subsection (3) shall be dealt with in the manner required by regulation.
(5) A seller shall annually carry out an audit of the trust funds established by the seller under section 6 and provide to the minister a copy of an audited statement of the prepaid funeral contracts, and the funds,
(a) collected with respect to those contracts during the preceding fiscal year;
(b) paid out from the trust accounts established under subsection 6(1) during the preceding fiscal year;
(c) contained in the trust accounts established under subsection 6(1); and
(d) payable to trust accounts established under subsection 6(1).
8. (1) A seller shall not call on, telephone or contact a person cared for or residing in a hospital, long term care facility or personal care home operating under the Health and Community Services Act or the Hospitals Act for the purpose of soliciting prepaid funeral contracts without having received a specific request to make that call, contact or solicitation.
(2) Notwithstanding subsection (1), a seller may, with the prior written approval of a hospital, facility or home referred to in subsection (1), and in accordance with the regulations, make a presentation with respect to prepaid funeral contracts to persons residing at those places.
(3) A seller shall not assign a prepaid funeral contract to another person unless the seller has obtained the prior consent, in writing, of the buyer of that contract or where the buyer is not available, of the beneficiary or his or her legal representative.
(4) Where a prepaid funeral contract is assigned at the request of the buyer, beneficiary or the beneficiaryís legal representative, that buyer, beneficiary or representative shall pay to the seller an amount of money as compensation for that transfer, calculated in accordance with the regulations.
9. (1) A buyer may rescind a prepaid funeral contract where the
(a) buyer serves a written notice of the rescission upon the seller not more than 10 days after he or she has entered into that contract; or
(i) was not licensed under this Act at the time that the buyer entered into the contract,
(ii) does not provide the buyer with a copy of the executed contract, or
(iii) does not comply with the regulations,
and written notice of the rescission is served upon that seller.
(2) Where a seller receives a notice under subsection (1) he or she shall, not more than 15 days after the day on which the seller receives that notice, pay to the buyer all money paid to that seller including that paid into the trust account under paragraph 6(1)(a).
(3) Subsections (1) and (2) do not apply to a prepaid funeral contract entered into before the coming into force of this Act.
10. (1) Where a buyer does not want funeral goods or funeral services to be provided under a prepaid funeral contract before the death of the beneficiary, the buyer may, in writing, cancel the prepaid funeral contract.
(2) Where a prepaid funeral contract is cancelled under subsection (1), the seller shall, not more than 15 days after receiving the cancellation, pay to the buyer, in accordance with the regulations, the funds of the buyer of that contract paid to the seller or placed into the trust account established under subsection 6(1) together with the interest on those funds.
(3) Where funds and interest are paid to a buyer under subsection (2), the buyer shall pay to the seller, in accordance with the regulations, an amount of money as a fee for the cancellation of the prepaid funeral contract.
Seller to provide services
11. (1) Where, after the death of a beneficiary, the funeral services or funeral goods to be provided under the contract are not provided because they are not available at the time the funeral goods and funeral services are to be provided by the seller, the seller shall, at the option of the buyer or, where applicable, the personal representative of the beneficiary,
(a) provide, at the time that they are required, funeral goods and funeral services of an equal or greater value than those contracted for, at no additional cost to the buyer or personal representative of the beneficiary; or
(b) return to the buyer or personal representative of the beneficiary the funds given to the seller or deposited in the trust account under subsection 6(1) and interest on those funds, not more than 15 days after receiving a request for that return from the buyer or the personal representative of the beneficiary.
(2) Where funds are to be returned to a buyer or personal representative under paragraph (1)(b), the seller shall pay to the buyer or personal representative, in accordance with the regulations, an amount of money as a fee for the return of the funds and failure to provide the prepaid funeral contract.
12. (1) Where it is reasonably necessary to ensure compliance with this Act, an auditor, or other person whom the minister may authorize, may at reasonable times enter the premises of a seller and
(a) require the production of books, records or other documents applicable to prepaid funeral contracts sold by that seller or its agent or salesperson and may examine those books, records or documents or remove them for the purpose of making copies of them;
(b) interview employees and agents of a seller to determine if the seller is complying with this Act; and
(c) inquire into all matters relating to prepaid funeral contracts, funeral goods and funeral services related to those contracts.
(2) Where a person removes books, records or other documents under paragraph (1)(a), he or she shall give to the person from whom those items were taken a receipt for those items and shall immediately make copies of those items and return the originals to the person who was given the receipt.
(3) The minister may require the annual inspection of a seller under this section or more frequent inspections where he or she considers it necessary.
13. (1) Where an auditor or other person authorized by the minister believes on reasonable grounds that a person is contravening or has contravened this Act, or, where entry onto a sellerís or other public or private premises where a contravention of this Act is believed to occur or have occurred is refused or denied, the auditor or person authorized by the minister may, with a warrant issued under subsection (2), enter those premises and do all those things referred to in section 12.
(2) A Provincial Court judge or a justice of the peace who is satisfied on oath or affirmation that there are reasonable grounds for believing that a contravention of this Act has occurred, or that entry onto public or private premises has been refused or denied, may issue a warrant authorizing the person named in the warrant to enter the private or public premises, including a dwelling house, and search for and inspect anything that shall provide evidence with respect to a contravention of this Act and do all things referred to in section 12.
(3) A seller and the owner or operator of private or public premises referred to in this section and section 12 and a person found there shall give the auditor or person authorized by the minister reasonable help to enable him or her to carry out his or her duties and functions under this Act and shall provide the information that he or she may reasonably require.
14. The Lieutenant-Governor in Council may make regulations
(a) respecting the establishment and administration of trust accounts and funds to be paid into trust accounts required under this Act;
(b) respecting the establishment of a financial administration board under section 5 and the administration and duties of that board;
(c) respecting the administration and auditing of the assurance fund, books and records required to be maintained under this Act and the fiscal year of the assurance fund;
(d) respecting the administration and audit of trust accounts and the books and records to be maintained by sellers with respect to those trust accounts;
(e) respecting prepaid funeral contract rescission, cancellation and transfer compensation, fees and penalties;
(f) respecting the content and soliciting of prepaid funeral contracts;
(g) respecting the receipts, records and reports to be given and maintained with respect to prepaid funeral contracts;
(h) requiring the posting of security or bonds by sellers and the amount and type of security or bond;
(i) respecting the disposition and management of unclaimed funds paid with respect to prepaid funeral contracts and the period for which funds are to be maintained in a trust account;
(j) respecting the establishment and maintenance of the assurance fund, requiring sellers to contribute to the assurance fund and prescribing the amount and manner of making contributions to that fund;
(k) respecting the time by which audits, statements, records, information and payments into trust accounts and the assurance fund are to be made;
(l) respecting the transfer, rescission and cancellation of prepaid funeral contracts;
(m) respecting audits of sellers who entered into prepaid funeral contracts before the coming into force of this Act, the information required and amount and manner of contributing to the assurance fund with respect to those contracts; and
(n) generally to give effect to the purpose of this Act.
Fees and forms
15. The minister may set fees and establish forms and the information to accompany those forms for the purpose and administration of this Act.
16. (1) A person who is not a corporation who contravenes a provision of this Act is liable on summary conviction
(a) for a first offence, to a fine of not more than $2,000 or to a term of imprisonment of not more than 2 months or to both the fine and imprisonment; and
(b) for a subsequent offence, to a fine of not more than $5,000 or to a term of imprisonment of not more than 4 months or to both the fine and imprisonment.
(2) Where a corporate person contravenes this Act that person is liable on summary conviction to a fine of not less than $5,000 and not more than $25,000.
17. (1) Notwithstanding that a seller entered into a prepaid funeral contract before the coming into force of this Act, that seller shall, not later than a time required by the regulations,
(a) provide to the minister an audited statement and record of those prepaid funeral contracts entered into before the coming into force of this Act for which no funeral goods or funeral services have been provided; and
(b) pay into the trust account required under section 6 an amount of money determined in accordance with the amount of outstanding prepaid funeral contract liability of the seller immediately before the coming into force of this Act.
(2) Money paid into a trust account under paragraph (1)(b) shall be paid in the manner required by the regulations and over a period of not more than 5 years after the coming into force of this Act.
(3) Notwithstanding subsections (1) and (2), the minister may, where, due to the extenuating circumstances of the seller, the minister is of the opinion that payment into the trust account as required under section 6 and this section would cause unusual hardship to the seller, vary the amount of money to be paid into the trust account and extend the time required to make the payments into the trust account.
18. This Act shall come into force on a date to be proclaimed by the Lieutenant-Governor in Council.
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