§ 453. Moneys paid in connection with agreements for funeral
merchandise or services in advance of need to be kept on deposit pending
use or repayment. 1. (a) Any and all moneys paid to a funeral firm,
funeral director, undertaker, cemetery, or any other person, firm or
corporation, under or in connection with an agreement, or any option to
enter into an agreement, for the sale of merchandise to be used in
connection with a funeral or burial, or for the furnishing of personal
services of a funeral director or undertaker, wherein the merchandise is
not to be actually physically delivered or the personal services are not
to be rendered until the occurrence of the death of the person for whose
funeral or burial such merchandise or services are to be furnished shall
continue to be the money of the person making such payment and shall be
held in trust for such person by the funeral firm, funeral director,
undertaker, cemetery or any other person, firm or corporation to whom
such payment is made and shall, within ten business days of receipt, be
deposited in an interest bearing account in a bank, national bank,
federal savings bank, federal savings and loan association, savings
bank, savings and loan association, credit union, or federal credit
union within the state and duly authorized to receive deposits in the
state of New York and which shall earn interest at a rate which shall be
at not less than the prevailing rate of interest earned by other such
deposits in such banks, savings banks, savings and loan associations, or
credit unions under this section, or shall be placed in a trust company
in an investment backed by the government of the United States and shall
not be commingled with other moneys of the funeral firm, funeral
director, undertaker, cemetery, or other person, firm or corporation or
become the funds of the funeral firm, funeral director, undertaker,
cemetery, or other person, firm or corporation, and shall be so held on
deposit, together with any interest thereon with interest earned being
accrued daily and credited monthly, until said merchandise has been
actually physically delivered and said personal services have been
rendered, unless sooner repaid, in whole or in part. No funeral firm,
funeral director, undertaker, cemetery or any other person, firm or
corporation, shall discharge the obligation established under this
section to deposit or place money with a bank, national bank, federal
savings bank, federal savings and loan association, savings bank,
savings and loan association, credit union, federal credit union or
trust company within the state through a surety bond or other financial
instrument unless expressly provided under this section.

(b) Such funeral firm, funeral director, undertaker, cemetery, or
other person, firm or corporation which received such moneys shall,
within thirty business days after the deposit or any change in the
institution in which such funds are deposited, provide written
notification to the person who made such payment of the institution of
the deposit and, until such moneys have been repaid or the personal
services and merchandise have been provided, shall annually provide the
person who made such payment with a statement identifying the location
and annual interest earned by the account.

(c) Upon request of the person who made such payment, or his or her
representative, the funeral firm, funeral director, undertaker, cemetery
or other person, firm or corporation which received such moneys shall
provide a statement within thirty days of such request identifying the
location of the account, amount of such account and interest earned on
such account. Upon the provision of any merchandise or personal services
in connection with any such agreement, the funeral firm, funeral
director, undertaker, cemetery or other person, firm or corporation
which received such moneys shall provide a statement itemizing the
merchandise or personal services provided and the cost of such
merchandise or personal services and describing the disposition of all
moneys in the account. Copies of such statements and the records on
which they are based shall be made available for inspection and shall be
made available during ordinary business hours for copying upon written
request by any state agency regulating the funeral firm, funeral
director, undertaker, cemetery or other person, firm or corporation
which received such money or enforcing the requirements of this section,
provided a complaint, either oral or written, has been received, or an
inspector has grounds to believe that serious or repeat violations of
this section have occurred.

(d) Moneys paid for such an agreement for an applicant or recipient of
supplemental security income benefits under section two hundred nine of
the social services law or of medical assistance under section three
hundred sixty-six of such law, or moneys paid by such an applicant or
recipient for such an agreement for his or her family member, shall be
placed into a trust which shall be irrevocable but under which such
applicant/recipient reserves the right to select any funeral firm,
funeral director, undertaker, cemetery or any other person, firm or
corporation to whom such payment is made and to change such selection
any time to any type of funeral or any funeral firm, funeral director,
cemetery or any other person, firm or corporation to whom such payment
is made, located in the state of New York or any other state. Any such
change must be carried out within ten business days following receipt of
a request by the purchaser to the funeral firm, funeral director,
cemetery or any other person, firm or corporation to whom such payment
is made, with which such trust was established. This requirement is
subject to any limits set forth in federal law or regulation pertaining
to disregarded resources or income.

2. The amount of any and all moneys paid under or in connection with
such an agreement, together with interest, if any, accrued thereon while
on deposit as so required shall be repaid on demand at any time prior to
the delivery of the merchandise and/or the rendering of the personal
services. No administrative, consultation or other fee may be assessed
against the person making such payment in connection with or planning
for such agreement. Provided, however, neither the applicant, recipient
or other purchaser of preneed funeral goods or services through an
irrevocable trust, their legal representative nor the heirs of such
person, shall be entitled to any repayment of the moneys which created
such trust.

3. Any such agreement must be in writing and must:

(a) Identify all moneys paid or to be paid; and

(b) Identify any fees paid to the person administering such trust fund
by a third party, provided, however, any such fees shall not exceed
seventy-five hundredths of one percent of the amount of such trust fund;
and

(c) Except for an irrevocable trust established pursuant to section
two hundred nine of the social services law or paragraph (d) of
subdivision one of this section, notify the person making such payment
of his or her right to be repaid moneys paid, together with accrued
interest, as described in this section and of his or her right to
receive an annual statement; and

(d) Identify the provider of each service or item of merchandise to
the extent agreed upon, and fully describe the service or merchandise to
the extent agreed upon; and

(e) Describe the obligations of each party:

(i) in the event the service or merchandise described in the agreement
cannot, for reasons beyond the control of the parties, be provided when
needed;

(ii) in the event the cost of such services or merchandise, when such
services or merchandise is to be provided, exceeds the amount of the
moneys paid and accrued interest; and

(iii) in the event the amount of the moneys paid and accrued interest
exceeds the cost of such services or merchandise when they are to be
provided. If the agreement does not provide to the contrary, the
services or merchandise described in the agreement must be provided for
no more than the price stated therein. Except for an irrevocable trust
established pursuant to section two hundred nine of the social services
law or paragraph (d) of subdivision one of this section, any moneys in
excess of the amount set forth in the agreement must be repaid to the
person who made the payment or to the estate of such person. The
agreement must also specify the name and address of a person not living
at the address of the person who made payments under or in connection
with the agreement, to whom required notices may be sent if the person
who made payments under or in connection with the agreement cannot be
contacted. The person making such payments may decline in writing to
specify the name and address of a person not living at the address of
the person making such payments to whom such notice may be sent; and

(f) With respect to an agreement for an irrevocable trust fund
pursuant to section two hundred nine of the social services law or
paragraph (d) of subdivision one of this section, include the following
statement in the agreement in conspicuous print of at least twelve point
type:

DISCLOSURE

NEW YORK LAW REQUIRES THIS AGREEMENT TO BE IRREVOCABLE FOR APPLICANTS
FOR AND RECIPIENTS OF SUPPLEMENTAL SECURITY BENEFITS UNDER SECTION TWO
HUNDRED NINE OF THE SOCIAL SERVICES LAW OR OF MEDICAL ASSISTANCE UNDER
SECTION THREE HUNDRED SIXTY-SIX OF THE SOCIAL SERVICES LAW, AND FOR THE
MONEYS PUT INTO A TRUST UNDER THIS AGREEMENT TO BE USED ONLY FOR FUNERAL
AND BURIAL EXPENSES. WHETHER THE AGREEMENT IS FOR YOUR FUNERAL AND
BURIAL EXPENSES OR FOR THOSE OF A FAMILY MEMBER, IF ANY MONEY IS LEFT
OVER AFTER YOUR FUNERAL AND BURIAL EXPENSES HAVE BEEN PAID, IT WILL GO
TO THE COUNTY. YOU MAY CHANGE YOUR CHOICE OF FUNERAL HOME AT ANY TIME.
IF THIS AGREEMENT IS FOR THE FUNERAL AND BURIAL EXPENSES OF A FAMILY
MEMBER, AFTER YOUR DEATH SUCH FAMILY MEMBER MAY CHANGE THE CHOICE OF
FUNERAL HOME AT ANY TIME.

(g) Any promotional literature prepared after January first, nineteen
hundred ninety-seven by a funeral firm, funeral director, undertaker,
cemetery, or any other person, firm or corporation for prearranged
funeral and burial services must contain language disclosing the
irrevocable nature of burial trusts established by or for an applicant
or recipient of supplemental security income benefits or medical
assistance.

4. Any provision of any such agreement whereby a person who pays money
under or in connection therewith waives any provision of this section
shall be void.

5. (a) Upon the sale or transfer of any business, firm, corporation or
other entity having received moneys in connection with such agreements
or the transfer of control over such money, both the new owner and
former owner or the estate of the former owner, or both the persons
currently and formerly having control over such money, shall, within
thirty days of such sale or transfer, notify, in writing, each such
person who has paid moneys of the sale or transfer, including the name
and address of the new and former owner. Copies of such notification
shall be made available for inspection and shall be made available
during ordinary business hours for copying upon written request by any
official or agency having jurisdiction.

(b) Upon the sale or other transfer of any business, firm, corporation
or other entity having received moneys in connection with such
agreements or upon any transfer of control over such moneys, the
transferee shall be liable for compliance with all provisions of this
section including the repayment of any moneys and provision of funeral
merchandise and services, and for compliance with all other requirements
of this section if the transferor or a transferor's predecessor in
interest was liable for such compliance with the requirements of this
section. Such liability shall attach whether or not the successor in
interest has, upon conveyance of such business, firm, corporation or
other entity, received such moneys or has knowledge of the existence of
the agreement as herein described. Such liability shall attach where
there is proof of a valid agreement for providing funeral merchandise
and services, and the funeral director, undertaker, cemetery or other
person, firm or corporation has not refunded the moneys received from
the customer.

(c) Upon the sale or other transfer of any business, firm, corporation
or other entity having received such moneys, or upon a transfer of
control of such moneys, the transferor shall disclose a complete
accounting of all moneys transferred pursuant to such agreement to the
transferee, including the names and addresses of all persons who
deposited moneys with such business, firm, corporation or other entity,
the amount and location of such moneys, the names and addresses of
persons who have received refunds and the amount of such refund.

(d) Upon the termination, cessation of operation or discontinuance of
any business, firm, corporation or other entity which has received
moneys in connection with such agreements or is otherwise liable for
compliance with the requirements of this section, such business, firm,
corporation or other entity shall repay all such monies and accrued
interest as if a demand had been made therefor within thirty days of
such termination or discontinuation. Copies of records relating to the
repayment of such moneys shall be available for inspection and shall be
made available during ordinary business hours for copying upon written
request by the appropriate official or agency having jurisdiction.

6. Any person, firm or corporation who or which, having received any
moneys under or in connection with such an agreement, shall knowingly
and willfully fail to deposit or keep such moneys on deposit shall be
guilty of a misdemeanor or, shall knowingly and willfully fail to
provide the notification required pursuant to subdivision five of this
section shall be guilty of a violation. Any person, firm or corporation
who or which, having received any moneys under or in connection with
such an agreement, or who or which is deemed responsible for such moneys
pursuant to subdivision five of this section shall, without lawful
reason, knowingly and willfully fail to repay, upon demand, any and all
such moneys as provided in this section, or shall knowingly and
willfully misappropriate such money for a use not authorized in this
section, shall, in addition to any other penalties provided by law, be
guilty of a misdemeanor.

7. Whenever there shall be a violation of this section an application
may be made by the attorney general in the name of the people of the
state of New York to a court or justice having jurisdiction by a special
proceeding to issue an injunction, and upon notice to the defendant of
not less than five days, to enjoin and restrain the continuance of such
violation; and if it shall appear to the satisfaction of the court or
justice that the defendant has, in fact, violated this section, an
injunction may be issued by the court or justice, enjoining and
restraining any further violations, without requiring proof that any
person has, in fact, been injured or damaged thereby. In any such
proceeding, the court may make allowances to the attorney general as
provided in paragraph six of subdivision (a) of section eighty-three
hundred three of the civil practice law and rules, and direct
restitution. Whenever the court shall determine that a violation of this
section has occurred, the court may impose a civil penalty of not more
than one thousand dollars for each violation; provided, however, the
court shall not impose a civil penalty in any case where the department
of health has imposed such a penalty for an identical violation of the
provisions of the public health law. In connection with any such
proposed application the attorney general is authorized to take proof
and make a determination of the relevant facts and to issue subpoenas in
accordance with the civil practice law and rules, and direct
restitution.

8. Records required by this section to be maintained and true copies
of agreements shall be retained for four years following the provisions
of funeral merchandise and services or, if a preneed administrator, for
four years after final payment is disbursed pursuant to the agreement.
In the event the funds are returned to the person who deposited the
money or their representative, such records, including the record of
return of funds shall be retained for a period of four years after the
sale, transfer, termination, cessation of operation or discontinuance of
the funeral. For purposes of this section, records shall include, but
not be limited to, a copy of the agreement, a death certificate and a
copy of the check or other payment made pursuant to the agreement.
Copies of such records shall be made available for inspection and shall
be made available during ordinary business hours for copying upon
written request by any state agency regulating the funeral firm, funeral
director, undertaker, cemetery or other person, firm or corporation
which received such money or enforcing the requirements of this section,
provided a complaint, either oral or written, has been received, or an
inspector has grounds to believe that serious or repeat violations of
this section have occurred.

9. This section shall not apply to the sale of lots or graves by a
cemetery.

10. For the purposes of this section, "preneed administrator" means
any person, partnership, firm, limited liability company or corporation,
which is either domiciled in or doing business in the state of New York,
and which has received money under or in connection with an agreement
executed pursuant to this section; and "county" shall refer only to a
county located within the state of New York. For the purposes of
subdivision five of this section, "preneed administrator" shall also
include any successor, assignee or transferee of funds held pursuant to
this section.

11. Notwithstanding any other provision of law to the contrary, the
following provisions shall be applicable to each preneed administrator
of written preneed accounts, both revocable and irrevocable:

(a) The assets of such an account shall be deemed abandoned as of the
later of (i) three years after the date of death of the person for whose
funeral or burial such assets were to be used; or (ii) one year after
the preneed administrator has determined that the person for whose
funeral or burial such assets were to be used has died if such death
occurred less than two years prior to such determination. The preneed
administrator shall make reasonable attempts to determine if the person
for whose funeral or burial such assets were to be used has died, using
available information from federal and state sources. Upon the death of
a person for whose funeral or burial such merchandise or services are to
be furnished, the preneed administrator shall determine the name and
address of the funeral director who performed the funeral services. If
the preneed administrator determines that the funeral director has been
paid in full for the funeral services, and if the account is
irrevocable, the preneed administrator shall, on or before the tenth day
of March in each year, transfer the assets of such account to the
indigent care burial fund for the county in which the person for whose
funeral or burial such assets were to be used resided at the date of his
or her death. If the preneed administrator determines that the funeral
director has been paid in full for the funeral services, and if the
account is revocable, the preneed administrator shall, on or before the
tenth day of March in each year, pay or deliver to the state comptroller
pursuant to section one thousand three hundred fifteen of the abandoned
property law, the assets of such account which was deemed to have been
abandoned as of the thirty-first day of December of such calendar year.

(1) Upon the death of a person for whose funeral or burial such
merchandise or services are to be furnished, if the preneed
administrator determines that the funeral director has not been paid in
full for the funeral services, the preneed administrator shall pay the
funeral director for the funeral services upon receipt of the required
documentation for paying claims for funeral services. If the balance due
is more than the cost of the funeral services, the preneed administrator
shall transfer the remaining balance, if an irrevocable account, to the
indigent care burial fund as provided in this paragraph, or, if a
revocable account, to the state comptroller as provided in this
paragraph.

(2) Upon the death of a person for whose funeral or burial such
merchandise or services are to be furnished, and with reasonable
efforts, the preneed administrator cannot determine the name and address
of the funeral director who provided the funeral services, the preneed
administrator, if the account was irrevocable, shall transfer the assets
of such account to the indigent care burial fund for the county in which
the person for whose funeral or burial such merchandise or services are
to be furnished resided at the time the irrevocable account was
established, such transfer to be made as described in this paragraph.
The preneed administrator, if the account was revocable, shall pay or
deliver the assets of such account to the state comptroller, such
transfer to be made as described in this paragraph.

(b) If the preneed administrator is not able to determine a current
proper address of an account for the person for whose funeral or burial
such merchandise or services are to be furnished such that the annual
statements mailed regarding the account are returned to the preneed
administrator as undeliverable, and such administrator cannot, after
making reasonable efforts, determine a current and proper address for
the person for whose funeral or burial such merchandise or services are
to be furnished, the account shall be deemed dormant if (i) the preneed
administrator has not been able to determine a correct address for the
person for whose funeral or burial such merchandise or services are to
be furnished for a period of fifteen consecutive years, and (ii) based
upon the information contained in the written agreement the preneed
administrator can determine that, if the person for whose funeral or
burial such merchandise or services are to be furnished were then
living, the person for whose funeral or burial such merchandise or
services are to be furnished would have reached the age of one hundred
fifteen years.

(1) If the account is deemed dormant as defined in this paragraph, the
preneed administrator shall transfer the assets of such account, if it
is an irrevocable account, to the indigent care burial fund for the
county in which the person for whose funeral or burial such merchandise
or services are to be furnished resided at the time the irrevocable
account was established. The administrator shall transfer the assets of
such account, if it is a revocable account, to the state comptroller as
provided in paragraph (a) of this subdivision.

(2) Nothing contained in this subdivision shall prevent a person for
whose funeral or burial such merchandise or services are to be
furnished, if an irrevocable account, or a funeral home which provided
funeral services to the person for whose funeral or burial such
merchandise or services are to be furnished, or a person who has paid
for funeral services for which an irrevocable account was established,
from requesting and receiving the lesser of (i) the actual cost or
amount paid for the funeral, or (ii) the amount transferred to the
indigent burial fund, in the event that the person for whose funeral or
burial such merchandise or services are to be furnished is living, or
that the funeral services for the person for whose funeral or burial
such merchandise or services are to be furnished were not paid in full,
or that a person has paid for funeral services for which an irrevocable
account was established. Nothing contained in this subdivision shall
prevent a person otherwise authorized by law to seek reimbursement of
the funds from a revocable account pursuant to the applicable provisions
of the abandoned property law.

12. A preneed administrator operating under this section shall conduct
an audit of all of its accounts relating to preneed agreements as of the
thirty-first of December of each calendar year. The audit shall:

(a) Be performed by a certified public accountant licensed to practice
in New York state;

(b) Be completed and delivered to the preneed administrator within one
hundred twenty days of the end of such calendar year;

(c) Verify, by way of a representative sample, that the preneed
administrator has a signed copy of the agreement for each account;

(d) Verify, by way of a representative sample, that appropriate income
tax reports have been sent by the preneed administrator to the owner of
each account;

(e) Verify that the investment of all funds for the agreements is in
compliance with this section;

(f) Verify, by an appropriate sampling method, that the earnings on
the investments are being properly applied to each account and that the
earnings are credited to each account at least monthly;

(g) Express an opinion that the financial statements of the preneed
administrator fairly represent the financial condition of the funds
received in all material respects, and that all financial information
distributed by the preneed administrator to consumers, funeral homes or
other parties is accurate; and

(h) Verify that the stated yield credited to the account for that
fiscal year, as announced by the preneed administrator, is accurate.

13. (a) In no event shall the administrative fees charged under a
preneed agreement in any calendar year exceed the net income credited to
an account for such calendar year; that is, the account balance shall
never be reduced in any calendar year because of administrative fees
charged against the account.

(b) Any administrative fees otherwise payable in relation to preneed
agreements which are not paid in any calendar year because of the
limitations in paragraph (a) of this subdivision shall not be collected
in any subsequent calendar year.

14. A preneed administrator operating under this section shall, at the
end of each calendar year, have all assets valued and presented in
accordance with generally accepted accounting principles.