HB 5381

Substitute House Bill No. 5381
  Public Act No. 26-57
AN ACT CONCERNING  UNLAWFUL  FUNERAL       SERVICE
PRACTICES.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
  Section 1. (NEW) (Effective from passage) (a) As used in this section:
   (1) "Funeral service contract" means a funeral service contract, as
defined in section 42-200 of the general statutes, as amended by this act,
that is entered into on or before July 1, 2026;
   (2) "Beneficiary" has the same meaning as provided in section 42-200
of the general statutes, as amended by this act;
   (3) "Purchaser" has the same meaning as provided in section 42-200
of the general statutes, as amended by this act; and
   (4) "Eligible person" means a beneficiary or purchaser of a funeral
service contract, the estate of a beneficiary or a legally authorized agent
of a beneficiary.
   (b) There is established a separate, nonlapsing account to be known
as the "funeral service guaranty account". The account shall contain (1)
any amounts appropriated or otherwise made available by the state for
the purposes of this section, (2) any moneys required by law to be
  Substitute House Bill No. 5381
deposited in the account, and (3) gifts, grants, donations or bequests
made for the purposes of this section. Investment earnings credited to
the assets of the account shall become part of the assets of the account.
The State Treasurer shall administer the account.
   (c) All moneys deposited in the account shall be used by the
Department of Consumer Protection for the purposes of this section.
The Commissioner of Consumer Protection may deduct and retain from
the moneys in the account an amount equal to the costs incurred by the
department in administering the provisions of this section, including
personnel expenses, except said amount shall not exceed two per cent
of the balance in the account in any fiscal year.
   (d) Beginning on and after July 1, 2027, the Commissioner of
Consumer Protection shall use the funeral service guaranty account to
provide restitution to eligible persons who were victims of fraudulent
or otherwise unlawful practices involving moneys paid pursuant to a
funeral service contract. The department shall not provide any
restitution that exceeds the balance available for restitution in the
account.
   (e) To make a claim for payment from the account, an eligible person
shall submit to the Department of Consumer Protection the following:
(1) A copy of the original funeral service contract; (2) proof of any
funeral services provided under the funeral service contract; (3) proof of
status as an eligible person pursuant to subsection (a) of this section; and
(4) proof of any payment for funeral or burial services not provided in
the funeral service contract. The commissioner may consider any
superior court or small claims court order entered against the provider
of the funeral service contract with the eligible person but shall not
require the submission of such an order.
   (f) To preserve the integrity of the funeral service guaranty account,
the commission may order payment from the account of an amount less
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than the eligible person's actual loss or damages incurred or less than
the order of restitution awarded by the commissioner. No payment shall
be made from the account in an amount of more than ten thousand
dollars for any one funeral service contract.
   (g) If the amount deposited in the account is insufficient to satisfy any
duly authorized claim or portion thereof, the commissioner shall, when
sufficient funds have been deposited in the account, satisfy such unpaid
claims or portions thereof in the order that such claims or portions
thereof were determined.
   (h) Whenever the commissioner has caused any amount to be paid
from the account to an eligible person, the commissioner shall be
subrogated to all the rights of the eligible person up to the amount paid
plus reasonable interest and, prior to receipt of any payment from the
account, the eligible person shall assign all of this right, title and interest
in the claim up to the amount to the commissioner, and any amount and
interest recovered by the commissioner on the claim shall be deposited
to the account.
   (i) If the commissioner orders the payment of any amount to an
eligible person against the provider of a funeral service contract, the
commissioner shall determine whether such provider is possessed of
assets liable to be sold or applied in satisfaction of the claim on the
account. If the commissioner discovers any such assets, the
commissioner may request that the Attorney General take any action
necessary for reimbursement to the account.
   (j) The commissioner shall adopt regulations, in accordance with the
provisions of chapter 54 of the general statutes, concerning the
requirements for obtaining restitution under this section and a process
for issuing restitution to eligible persons. Such regulations shall be
proposed not later than April 1, 2028, or ninety days after the issuance
of the final report from the funeral service working group, established
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pursuant to section 3 of this act, whichever is earlier. Notwithstanding
the provisions of sections 4-168 to 4-172, inclusive, of the general
statutes, in order to effectuate the provisions of this section, prior to
adopting such regulations and not later than June 1, 2027, the
commissioner shall adopt policies and procedures to implement the
provisions of this section. Not later than June 1, 2027, the commissioner
shall implement policies and procedures necessary to administer the
provisions of this section while in the process of adopting such policies
and procedures as regulations, provided the department posts such
policies and procedures on the eRegulations System prior to adopting
them. Policies and procedures implemented pursuant to this section
shall be valid until regulations are adopted in accordance with the
provisions of chapter 54 of the general statutes.
   Sec. 2. Subsection (b) of section 42-200 of the general statutes is
repealed and the following is substituted in lieu thereof (Effective July 1,
2026):
  (b) A funeral service contract shall be in writing and shall contain,
except as provided in subsection (c) of this section; [, the following:]
   (1) The name, address, telephone number and Social Security number
of the beneficiary and the purchaser;
  (2) The name, address, telephone number and license number of the
funeral director for the funeral service establishment providing the
goods or services;
  (3) A list of the selected goods or services, if any;
  (4) The amount of funds paid or to be paid by the purchaser for such
contract, the method of payment and a description of how such funds
will be invested and how such investments are limited to those
authorized pursuant to subsection (c) of section 42-202;
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   (5) A description of any price guarantees by the funeral service
establishment or, if there are no such guarantees, a specific statement
that the contract contains no guarantees on the price of the goods or
services contained in the contract;
  (6) The name and address of the escrow agent designated to hold the
prepaid funeral services funds;
    (7) A written representation, in clear and conspicuous bold type, that
the purchaser should receive a notice from the escrow agent
acknowledging receipt of the initial deposit and the amount of such
deposit not later than twenty-five days after receipt of such deposit by
a licensed funeral director;
   (8) A description of any fees to be paid from the escrow account to
the escrow agent or any third party provider;
  (9) A description of the ability of the purchaser or the beneficiary to
cancel a revocable funeral service contract and the effect of cancelling
such contract;
  (10) For irrevocable contracts, a description of the ability of the
beneficiary to transfer such contract to another funeral home; [and]
   (11) The signature of the purchaser or authorized representative and
the licensed funeral director of the funeral service establishment; and
   (12) A statement signed by the purchaser attesting that, prior to
executing such contract, the purchaser received (A) a copy of the fact
sheet on funeral service contracts published on the Department of
Consumer Protection's Internet web site, and (B) time to review such
fact sheet.
  Sec. 3. (NEW) (Effective from passage) (a) There is established a
working group to study issues related to prepaid funeral service
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contracts, the creation of consumer protections for purchasers of such
contracts or their agents, and the establishment and implementation of
a guaranty fund for consumers who purchase such contracts.
  (b) The working group shall consist of the following members:
   (1) One appointed by the House chairperson of the joint standing
committee of the General Assembly having cognizance of matters
relating to consumer protection;
   (2) One appointed by the Senate chairperson of the joint standing
committee of the General Assembly having cognizance of matters
relating to consumer protection;
   (3) One appointed by the House ranking member of the joint standing
committee of the General Assembly having cognizance of matters
relating to consumer protection;
   (4) One appointed by the Senate ranking member of the joint standing
committee of the General Assembly having cognizance of matters
relating to consumer protection;
  (5) The Commissioner of Consumer Protection, or the commissioner's
designee;
  (6) The Commissioner of Public Health, or the commissioner's
designee;
  (7) The Insurance Commissioner, or the commissioner's designee;
  (8) The Banking Commissioner, or the commissioner's designee;
  (9) The Probate Court Administrator, or the administrator's designee;
  (10) A representative of an association representing funeral directors,
who shall be appointed jointly by the chairpersons of the joint standing
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committee of the General Assembly having cognizance of matters
relating to consumer protection;
   (11) A representative of an association representing banks, who shall
be appointed jointly by the chairpersons of the joint standing committee
of the General Assembly having cognizance of matters relating to
consumer protection; and
   (12) A representative of an association representing insurance
companies, who shall be appointed jointly by the chairpersons of the
joint standing committee of the General Assembly having cognizance of
matters relating to consumer protection.
   (c) Any member of the working group appointed under subdivision
(1), (2), (3) or (4) of subsection (b) of this section may be a member of the
General Assembly, provided any member of the working group
appointed under said subdivisions who is a member of the General
Assembly shall serve as a nonvoting member of the working group
unless such member is selected to serve as a chairperson of the working
group, in which case such member shall have a vote on the working
group.
   (d) All initial appointments to the working group shall be made not
later than thirty days after the effective date of this section. Any vacancy
shall be filled by the appointing authority.
   (e) The chairpersons of the joint standing committee of the General
Assembly having cognizance of matters relating to consumer protection
shall select two chairpersons of the working group from among the
members of the working group appointed under subdivision (1), (2), (3)
or (4) of subsection (b) of this section. Such chairpersons shall schedule
the first meeting of the working group, which shall be held not later than
sixty days after the effective date of this section. The working group
shall meet not less frequently than monthly and may meet at such other
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times as the chairpersons, in their discretion, deem necessary.
  (f) The administrative staff of the joint standing committee of the
General Assembly having cognizance of matters relating to consumer
protection shall serve as administrative staff of the working group.
   (g) Not later than December 1, 2027, the working group shall submit
an initial report on its findings and recommendations to the joint
standing committee of the General Assembly having cognizance of
matters relating to consumer protection, in accordance with the
provisions of section 11-4a of the general statutes.
   (h) Not later than January 1, 2027, the working group shall submit a
final report on its findings and recommendations to the joint standing
committee of the General Assembly having cognizance of matters
relating to consumer protection, in accordance with the provisions of
section 11-4a of the general statutes. The working group shall terminate
on the date that it submits such final report or January 1, 2028,
whichever is later.
 Governor's Action:
 Approved May 19, 2026
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