APPROVED CHAPTER
JUNE 9, 2025 203
BY GOVERNOR PUBLIC LAW
STATE OF MAINE
_____
IN THE YEAR OF OUR LORD
TWO THOUSAND TWENTY-FIVE
_____
H.P. 553 - L.D. 867
An Act Regarding Pre-need Funeral Insurance
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 24-A MRSA §2176, as amended by PL 1999, c. 258, §1, is further amended
to read:
§2176. Funeral and burial service contracts prohibited
An insurer may not contract or agree with any funeral director practitioner, funeral
establishment, mortuary establishment, cemetery, cemetery corporation or association,
crematorium, mausoleum or columbarium or any representative of any of these directors
practitioners or establishments to the effect that the director practitioner or establishment
shall must conduct the funeral, burial, or cremation or other disposal of the remains of any
individual insured by the insurer. An insurer may not retain, utilize or employ any director
or establishment as a producer or agency of the insurer and a director or establishment may
not act as or purport to be an insurance producer or engage in insurance producer activities.
Nothing in this section prevents This section does not prevent compliance with Title 39‑A,
section 216, or the use of an insurance policy, including, subject to the provisions of section
2420, the assignment of rights under life insurance contracts, to provide security for the
payment for a funeral, burial or cremation or, subject to chapter 27, the naming of a funeral
home establishment or funeral director practitioner as beneficiary under a life insurance
policy to provide payment for a funeral, burial or cremation. Nothing in this This section
prohibits does not prohibit the use of an insurance policy as an investment by a mortuary
trustee pursuant to Title 32, section 1401.
Sec. 2. 24-A MRSA §2176-A is enacted to read:
§2176-A. Disclosures required for sale of pre-need insurance in connection with
prearranged funerals
1. Definition. For purposes of this section, "pre-need insurance" means a type of life
insurance policy designed to cover the costs of funeral and burial services selected in a
statement of goods and services contract and for which the entire death benefit is paid
directly to the funeral establishment.
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 2. Disclosures. At the time an application is made, and prior to accepting the applicant's
initial premium or deposit for a pre-need insurance policy that is being sold in connection
with a prearranged funeral service or plan as described in Title 32, section 1402, a producer
shall adequately disclose the following information:
A. The fact that a pre-need insurance policy is involved or being used to fund a
prearranged funeral service or plan;
B. The nature of the relationship among the soliciting producer, the provider of the
funeral or cemetery merchandise or services, the administrator and any other person;
C. The relationship of the pre-need insurance policy to the funding of the prearranged
funeral service or plan and the nature and existence of any guarantees relating to the
prearranged funeral service or plan;
D. A list of the goods and services that are selected or contracted for in the prearranged
funeral service or plan and all relevant information concerning the price of the funeral
and burial services, including an indication that the purchase price is either guaranteed
at the time of purchase or to be determined at the time of need;
E. The fact that the face amount of the pre-need insurance policy may not exceed the
maximum amount of the goods and services that are contracted for in the prearranged
funeral service or plan;
F. All relevant information concerning what occurs and whether any entitlements or
obligations arise if there is a difference between the proceeds of the pre-need insurance
policy and the amount actually needed to fund the prearranged funeral service or plan;
G. Any penalties or restrictions, including, but not limited to, geographic restrictions
or the inability of the provider to perform, on the delivery of merchandise or services
or the prearranged funeral service or plan guarantee; and
H. Whether a sales commission or other form of compensation is being paid for the
sale of the pre-need insurance policy and the identity of the individual or entity to
whom it is paid.
Sec. 3. 32 MRSA §1401, sub-§1, as amended by PL 2007, c. 402, Pt. J, §1, is
further amended to read:
1. Plan requirements. Except as provided in subsection subsections 1‑A and 1-B,
any a prearranged funeral or burial plan contracted or undertaken within this State must
comply with the following.
A. All money paid during a person's lifetime to any individual, firm, association,
partnership or corporation, by that person or by someone on behalf of that person, under
an agreement that services will be performed or personal property will be delivered in
connection with the disposition of that person's body after death must be deposited by
the payee within 10 days after receipt of the money in a separate account in a financial
institution or credit union authorized to do business in this State, as defined in Title
9‑B, section 131, subsections 12‑A and 17‑A, in the name of the payee as mortuary
trustee for the person for whose benefit the payment was made and must be held in that
account together with interest if any. If money is paid by check, share draft or money
order, the payee shall instruct the payor to make the instrument payable to the financial
institution or credit union into which it is to be deposited and to include on the
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instrument the name of the mortuary trustee and the person for whose benefit the
payment was made.
B. The payee shall deposit the money in either a federally insured deposit or share
account or a trust account; the type of account must be disclosed to the payor or the
payor's representative and a deposit in a trust account may be invested in or used to
purchase only the following:
(1) Federally insured deposit or share accounts;
(2) Securities issued, insured or guaranteed by the United States or by any agency
or corporate or other instrumentality of the United States;
(3) Municipal securities that are exempt from registration under Title 32, section
16201, subsection 1; and
(4) Permanent life insurance, other than variable life insurance and annuities, from
an insurer authorized to transact insurance in this State, subject to the provisions
of Title 24‑A, chapter 27. A payee or mortuary trustee may not receive any
commission, fee or other consideration from an insurer in connection with the
procurement or purchase of insurance permitted by this subparagraph.
Except for fees allowed by this section, all investments made with trust assets remain
trust assets.
C. Within 30 days after the deposit of funds by the payee, the financial institution or
credit union shall provide a written confirmation of the deposit, including the amount
deposited, to the payor or the payor's legal representative. Nothing in this This section
may not be construed to prevent the direct transfer of these funds to another financial
institution or credit union by payee transfer, by financial institution or credit union
merger or consolidation or by operation of law, provided that as long as within 30 days
after the direct transfer of the funds, the recipient financial institution or credit union
shall provide provides a written confirmation of the deposit, including the amount
deposited, to the payor or the payor's legal representative.
D. The agreement must be in writing and a copy must be furnished to the payor or the
payor's legal representative by the payee when the agreement is executed. The
agreement may be revocable or irrevocable; however, if irrevocable, there must be a
provision to allow for the transfer of the account by the appointment of successor
trustees. The agreement must clearly state the name of the initial financial institution
or credit union into which the money will be deposited and must direct the payor to
send a copy of the agreement to the named financial institution or credit union. The
agreement must clearly state terms providing for disposition of excess funds after
funeral goods and services have been provided. The agreement must clearly state any
fees that may be charged against the account; fees must be reasonable, as defined by
the board, and may be charged only:
(1) Upon transfer of the account by the appointment of a successor trustee;
(2) Upon revocation of the agreement if the agreement is revocable; and
(3) For the actual financial and tax administration of the account.
The payee shall maintain a complete record of the deposit of all funds, including
principal and interest. The record must be available for inspection by the payor, the
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 payor's legal representative, the commissioner's designee or an inspector for the board
and must contain the name and address of the financial institution or credit union
currently in possession of the funds and the dates and amounts of deposits.
E. The funds may be directed by the payee to another financial institution or credit
union or directed back to the payor or the payor's legal representative, if otherwise
lawful and permitted by contract, on written instructions of the payor or the payor's
legal representative. The funds may only be withdrawn by the payee on presentation
of a certified copy of the death certificate of the person for whose benefit the funds
were paid, in which event they must be used in accordance with the agreement.
Sec. 4. 32 MRSA §1401, sub-§1-A, as enacted by PL 2003, c. 109, §3, is amended
to read:
1-A. Plan funded with mortuary trust agreement and proceeds of life insurance
policy. A prearranged funeral or burial plan agreement may be funded with a mortuary
trust agreement that receives the proceeds of a life insurance policy in accordance with this
subsection.
A. During a person's lifetime, a person or that person's legal representative may enter
into an agreement that services will be performed or personal property will be delivered
in connection with the disposition of that person's body after death by:
(1) Assigning the mortuary trustee as owner and beneficiary of a life insurance
policy payable to the mortuary trustee upon that person's death; or
(2) Designating the mortuary trustee as a beneficiary of a life insurance policy
payable to the mortuary trustee upon that person's death.
B. An agreement under paragraph A must be in writing and a copy must be furnished
to the person or the person's legal representative by the mortuary trustee when the
agreement is executed. The agreement may be revocable or irrevocable; however, if
the agreement is irrevocable, there must be a provision to allow for the transfer of the
trust account by the appointment of successor trustees. The agreement must clearly
state terms providing for disposition of excess funds after funeral goods and services
have been provided. The agreement must clearly state any fees that may be charged
against the trust account. Fees must be reasonable, as defined by the board, and may
be charged only:
(1) Upon transfer of a trust account by the appointment of a successor trustee;
(2) Upon revocation of the agreement if the agreement is revocable; and
(3) For the actual financial and tax administration of the trust account.
C. The mortuary trustee shall maintain a complete record of a trust account established
under this subsection. The record must be available for inspection by the person, the
person's legal representative, the commissioner's designee or an inspector for the board.
This subsection may not be construed to alter the terms of a life insurance policy or
supersede any law governing the regulation of life insurance policies.
Sec. 5. 32 MRSA §1401, sub-§1-B is enacted to read:
1-B. Plan funded with proceeds of pre-need life insurance policy. A prearranged
funeral service or plan may be funded with proceeds of a pre-need insurance policy in
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accordance with this subsection. For the purposes of this section, "pre-need insurance" has
the same meaning as in Title 24-A, section 2176-A, subsection 1.
A. During a person's lifetime, a person or that person's legal representative may enter
into an agreement that services will be performed or personal property will be delivered
in connection with the disposition of that person's body after death by the assignment
of proceeds of a pre-need insurance policy to the funeral establishment upon that
person's death.
B. The face amount of a pre-need insurance policy sold in connection with a
prearranged funeral service or plan as described in section 1402 may not exceed the
maximum amount of the goods and services that are contracted for in the prearranged
funeral service or plan.
C. An agreement under paragraph A must be in writing and a copy must be furnished
to the person or the person's legal representative by the funeral establishment when the
agreement is executed. The agreement must identify the parties to the agreement and
must be signed by an authorized representative of the funeral establishment.
The receipt of a commission for the sale of pre-need insurance by a licensee that is also
licensed as an insurance producer does not constitute a violation of section 1455-B,
subsection 5.
This subsection may not be construed to alter the terms of an insurance policy or supersede
any law governing the regulation of insurance policies.
Sec. 6. 32 MRSA §1401, sub-§2, as enacted by PL 1999, c. 258, §2 and affected
by §3, is amended to read:
2. Rulemaking. The board shall adopt rules regarding prearranged funeral
agreements, including, but not limited to:
A. The form, format and content of trust agreements;
B. Standards regarding when service contracts are required in conjunction with trust
agreements and the form, format and content of the service contracts;
C. The establishment of reasonable fees that may be charged only pursuant to
subsection 1, paragraph D; and
D. Inspection of trust agreements, account information and any related
documentation.; and
E. The form, format and content of agreements for prearranged funeral services or
plans as described in section 1402 funded by pre-need insurance.
Rules adopted pursuant to this section are routine technical rules under the Maine Revised
Statutes, Title 5, chapter 375, subchapter II‑A 2-A.
Sec. 7. 32 MRSA §1402, first ¶ is amended to read:
No A funeral home, funeral establishment or person holding a license under this
chapter shall may not as, or through, an agent or principal solicit a prearranged funeral
service or plan for any person or persons. "Prearranged funeral service or plan" shall mean
means any funeral service or plan which that is arranged, planned or determined prior to
the demise of a person or persons for whom the funeral service is to be performed. Funeral
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homes, funeral establishments and licensees under this chapter may enter into contracts or
agreements for prearranged funeral services or plans provided that, as long as they do not
in any manner either as, or through, principals or agents solicit such that contract or
agreement. This section does not prohibit the sale of insurance, in compliance with section
1401, subsection 1-B and Title 24-A, section 2176-A, to a consumer who has contacted a
funeral home, funeral establishment or licensee under this chapter to prearrange a funeral.
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Statutes affected:
Bill Text ACTPUB , Chapter 203: 24-A.2176, 32.1401, 32.1402