Chapter 445

445.12(3r)(a) (a) Require a person who enters into a burial agreement under s. 445.125 (3m) to purchase a life insurance policy used to fund the agreement from an insurance intermediary licensed under ch. 628 who is specified by the funeral director or operator of the funeral establishment.

445.12(3r)(b) (b) Authorize an insurance intermediary licensed under ch. 628 to sell or solicit the sale of a burial agreement under s. 445.125 (3m) (b) 2. a. unless the insurance intermediary meets the training requirements established by the examining board by rule under s. 445.125 (3m) (j) 1. a.

445.12(4) (4) No licensed funeral director or operator of a funeral establishment may publish, or cause to be published, any false, misleading or fraudulent advertisement, or take undue advantage of patrons or commit any fraudulent act in the conduct of business, or do any other act not in accord with the rules established by the department of health services and the examining board and not in accord with proper business practice as applied to the business or profession of funeral directing and embalming.

445.12(5) (5) Any licensed funeral director who knowingly permits any person not licensed as a funeral director to embalm or prepare for burial any body under his or her jurisdiction, or who permits any person not licensed as a funeral director to hold or conduct any funeral service for which he or she is responsible, or who permits any person not licensed as a funeral director to remove any dead human body from any home, hospital or institution for preparation, or who permits any person under his or her supervision or associated with him or her to violate the provisions of this chapter, shall be guilty of violating the provisions of this chapter and subject to the penalties provided therein. The foregoing provisions shall not be construed as to restrict the activities of a duly registered apprentice operating under the supervision of a licensed funeral director.

445.12(6) (6) No licensed funeral director or operator of a funeral establishment may operate a mortuary or funeral establishment that is located in a cemetery or that is financially, through an ownership or operation interest or otherwise, connected with a cemetery. No licensed funeral director or his or her employee may, directly or indirectly, receive or accept any commission, fee, remuneration or benefit of any kind from any cemetery, mausoleum or crematory or from any owner, employee or agent thereof in connection with the sale or transfer of any cemetery lot, outer burial container, burial privilege or cremation, nor act, directly or indirectly, as a broker or jobber of any cemetery property or interest therein.

445.12(7) (7) No licensed funeral director or operator of a funeral establishment may sell or cause to be sold any shares of stocks, certificates of membership or any other form of certificate which provides for any burial benefit or any rebate at the time of death to the holders thereof. This subsection does not prohibit the sale of burial agreements to the extent permitted under, and that are in conformity with, s. 445.125 (3m).

445.12 History History: 1973 c. 272; 1975 c. 39, 199; 1979 c. 175 s. 29; 1979 c. 221 s. 662; Stats. 1979 s. 445.12; 1983 a. 485; 1989 a. 307; 1993 a. 100; 1995 a. 27 s. 9126 (19); 1995 a. 295; 2005 a. 441; 2007 a. 20 s. 9121 (6) (a).

445.12 Cross-reference Cross-reference: See also chs. FD 2 and DHS 135 and 136, Wis. adm. code.

445.12 Annotation If subsidiary corporations have prohibited financial connections, their corporate structure will not save them from the prohibitions of ss. 157.067 (2) and 445.12 (6). Those statutes are not unconstitutionally vague. Cemetery Service, Inc. v. Department of Regulation and Licensing, 221 Wis. 2d 817, 586 N.W.2d 191 (Ct. App. 1998), 97-2115.

445.12 Annotation Sub. (6) and s. 157.067 (2), which prohibit the joint ownership or operation of a cemetery and a funeral home, do not violate the equal protection or due process clauses of the Wisconsin and U.S. constitutions. Porter v. State, 2018 WI 79, 382 Wis. 2d 697, 913 N.W.2d 842, 16-1599.

445.12 Annotation Whether parent and subsidiary corporations violate sub. (6), which prohibits an operator of a funeral establishment from being connected with a cemetery, depends upon the facts relating to legal separateness of the parent and subsidiary corporations. 78 Atty. Gen. 5.

445.125 445.125 Burial agreements.

445.125(1) (1) Burial agreements funded by trusts.

445.125(1)(a) (a)

445.125(1)(a)1. 1. Except as provided in sub. (3m), whenever a person, referred to in this subsection as the depositor, makes an agreement with another person selling or offering for sale funeral or burial merchandise or services, referred to in this subsection as the beneficiary, for the purchase of a casket, outer burial container not preplaced into the burial excavation of a grave, combination casket-outer burial container or other receptacle not described in sub. (4) (a) 2. for the burial or other disposition of human remains or for the furnishing of funeral or burial services, either of which is intended to be provided for the final disposition of the body of a person, referred to in this subsection as the potential decedent, wherein the use of such personal property or the furnishing of such services is not immediately required, all payments made under the agreement shall be and remain trust funds, including interest and dividends if any, until occurrence of the death of the potential decedent, unless the funds are sooner released upon demand to the depositor, after written notice to the beneficiary.

445.125(1)(a)2. 2. Such agreements may be made irrevocable as to the first $3,000 of the funds paid under the agreement by each depositor.

445.125(1)(a)3. 3. Any interest or dividends accruing to a trust fund under subd. 2. may be made irrevocable.

445.125(1)(a)4. 4. Any depositor who made an irrevocable agreement under subd. 2. may designate a different beneficiary at any time prior to death, after written notice to the current beneficiary.

445.125(1)(b) (b)

445.125(1)(b)1. 1. All trust funds under par. (a) shall be deposited with a bank or trust company within the state whose deposits are insured by the federal deposit insurance corporation, deposited in a savings and loan association or savings bank within the state whose deposits are insured by the federal deposit insurance corporation, or invested in a credit union within the state whose savings are insured by the national board, as defined in s. 186.01 (3m), and shall be held in a separate account in the name of the depositor, in trust for the beneficiary until the trust fund is released under either of the conditions provided in par. (a) 1.

445.125(1)(b)2. 2. In the event of the death of the depositor before the death of the potential decedent, title to funds under par. (a) shall vest in the potential decedent, and the funds shall be used for the personal property and services to be furnished under the contract for the funeral of the potential decedent.

445.125(1)(b)3. 3. The depositor shall be furnished with a copy of the receipts, certificates or other appropriate documentary evidence showing that the funds under par. (a) have been deposited or invested in accordance with this subsection. The depositor or the beneficiary shall furnish the bank, trust company, savings bank, savings and loan association or credit union with a copy of the contract.

445.125(1)(b)4. 4. The bank, trust company, savings bank, savings and loan association, or credit union shall release the trust funds under par. (a) to the beneficiary upon receipt of both a written statement of the beneficiary that the agreement was complied with and one of the following:

445.125(1)(b)4.a. a. A certified copy of the certificate of death of the potential decedent.

445.125(1)(b)4.b. b. An affidavit made by the beneficiary of the potential decedent’s death, in the form prescribed under s. 69.02 (1) (c), if the bank, trust company, savings bank, savings and loan association, or credit union consents to receipt of the affidavit. The affidavit shall be accompanied by an invoice for the cost of the services and personal property for which release of the funds is sought. If the bank, trust company, savings bank, savings and loan association, or credit union consents to receipt of the affidavit and to release of the funds, it is immune from civil liability for the amount of the funds so released.

445.125(1)(c) (c) The payment pursuant to this subsection of such fund and any interest or dividends which may have accumulated shall relieve the bank, trust company, savings bank, savings and loan association or credit union of any further liability for such funds, interest or dividends. A bank need not comply with ch. 223 to accept and disburse deposits under this subsection.

445.125(3m) (3m) Burial agreements funded with proceeds of life insurance policies.

445.125(3m)(a) (a) In this subsection:

445.125(3m)(a)1. 1. “Agent” means an authorized representative of a funeral director or operator of a funeral establishment.

445.125(3m)(a)2. 2. “Burial agreement” means a written agreement between an operator of a funeral establishment or funeral director and a person in which the operator of the funeral establishment or funeral director agrees to provide to a person, after that person is deceased, funeral merchandise or funeral services.

445.125(3m)(a)3. 3. “Cash advance item” means personal property or a service that is obtained by a funeral director or operator of a funeral establishment from a 3rd party and that is paid for by the funeral director or operator of the funeral establishment on behalf of, and subject to reimbursement from, a person purchasing funeral merchandise or funeral services from the funeral director or operator of the funeral establishment. “Cash advance item” includes cemetery or crematory services, pallbearers, public transportation, clergy honoraria, flowers, musicians or vocalists, nurses, obituary notices, gratuities and death certificates.

445.125(3m)(a)4. 4. “Funeral merchandise or funeral services” means personal property or services typically sold or provided in connection with the final disposition of human remains, including caskets or other primary containers not preplaced into the burial excavation of a grave, rental, temporary or disposable caskets or containers, outer burial containers not preplaced into the burial excavation of a grave, transportation containers, funeral clothing and accessories, embalming services and funeral directing services. “Funeral merchandise or funeral services” does not include a cash advance item or opening and closing costs that are associated with the burial of a deceased person.

445.125(3m)(b) (b)

445.125(3m)(b)1. 1. A licensed funeral director, an operator of a funeral establishment, an agent of a licensed funeral director or, subject to par. (c), an agent of an operator of a funeral establishment may sell or solicit the sale of a burial agreement that is funded with the proceeds of a life insurance policy if all of the following apply:

445.125(3m)(b)1.a. a. The burial agreement meets the requirements specified in pars. (d) to (f) and in the rules promulgated by the examining board under par. (j) 1. b.

445.125(3m)(b)1.b. b. The licensed funeral director, operator of the funeral establishment or agent is licensed as an insurance intermediary under ch. 628.

445.125(3m)(b)2. 2.

445.125(3m)(b)2.a. a. A licensed funeral director or operator of a funeral establishment may authorize an agent who is an insurance intermediary licensed under ch. 628, and who meets the training requirements established by the examining board under par. (j) 1. a., to sell or solicit the sale of a burial agreement that is funded with the proceeds of a life insurance policy and that meets the requirements specified in pars. (d) to (f).

445.125(3m)(b)2.b. b. A licensed funeral director or operator of a funeral establishment shall report to the examining board the identity of any agent authorized by the licensed funeral director or operator of the funeral establishment under subd. 2. a. and provide evidence satisfactory to the examining board that such agent meets the training requirements established by the examining board by rule under par. (j) 1. a. The examining board shall promulgate rules establishing requirements and procedures for making reports and providing the evidence required under this subd. 2. b.

445.125(3m)(b)2.c. c. A licensed funeral director or operator of a funeral establishment is responsible for and bound by any act of an agent, authorized by the licensed funeral director or operator of the funeral establishment under subd. 2. a., that is within the scope of the agent’s apparent authority, while a contract under par. (c) 1. between the agent and the licensed funeral director or operator of the funeral establishment remains in force, and after that time until the licensed funeral director or operator of the funeral establishment has made reasonable efforts to recover from the agent any forms for burial agreements provided to the agent by the licensed funeral director or operator of the funeral establishment and other indicia of agency. Reasonable efforts shall include a formal demand in writing for return of the indicia, and notice to the examining board if the agent does not comply with the demand promptly.

445.125(3m)(c) (c)

445.125(3m)(c)1. 1. No agent of an operator of a funeral establishment may solicit the sale of or sell a burial agreement funded with the proceeds of a life insurance policy unless he or she has a contract with the operator of the funeral establishment that authorizes him or her to act as the agent of the operator of the funeral establishment and that satisfies the requirements established by the examining board by rule under par. (j) 1. c.

445.125(3m)(c)2. 2. If an agent of an operator of a funeral establishment solicits the sale of or sells a burial agreement funded with the proceeds of a life insurance policy, the agent shall do all of the following at the time of solicitation:

445.125(3m)(c)2.a. a. Disclose to the prospective purchaser of the burial agreement the identity of the funeral establishment of which he or she is an agent.

445.125(3m)(c)2.b. b. Furnish to the applicant a copy of the booklet prepared and distributed by the examining board under par. (j) 3. that describes the differences between funding a burial agreement with the proceeds of a life insurance policy under this subsection and entering into a burial agreement funded by a trust under sub. (1).

445.125(3m)(d) (d) A burial agreement that is funded with the proceeds of a life insurance policy shall specify in the agreement the funeral establishment that will be used to provide the funeral services or funeral merchandise to be provided under the agreement.

445.125(3m)(e) (e)

445.125(3m)(e)1. 1. A burial agreement that is funded with the proceeds from a life insurance policy shall include a provision setting forth the nature and extent of any price guarantee for the funeral merchandise or funeral services that are to be provided under the burial agreement.

445.125(3m)(e)2. 2. If an agent solicits and sells a burial agreement that is funded with the proceeds of a life insurance policy, the licensed funeral director who owns the funeral establishment or is an agent of the operator of the funeral establishment that will provide funeral merchandise or funeral services under the burial agreement shall ratify the burial agreement in writing and with his or her signature.

445.125(3m)(f) (f) The price of any funeral merchandise or funeral services provided under a burial agreement funded with the proceeds of a life insurance policy may not exceed the price for the merchandise or services that, at the time that the merchandise is provided or the services are performed, is set forth in the funeral establishment’s general price list required under the funeral industry practices regulations of the federal trade commission.

445.125(3m)(g) (g) Before an agent, a licensed funeral director or an operator of a funeral establishment accepts an applicant’s initial premium for a burial agreement that is funded or will be funded by a life insurance policy, the agent, funeral director or operator of a funeral establishment shall comply with the requirements under par. (h) and shall, in a writing that is clear and conspicuous, disclose the following information to the applicant:

445.125(3m)(g)1. 1. The fact that a life insurance policy is involved in or connected to, or is being used to fund, the burial agreement.

445.125(3m)(g)2. 2. The type of insurance instrument that is funding the burial agreement.

445.125(3m)(g)3. 3. The effect on the burial agreement of all of the following:

445.125(3m)(g)3.a. a. Changing the life insurance policy, including changing the assignment of the policy proceeds, changing the beneficiary designation or changing the use of the proceeds.

445.125(3m)(g)3.b. b. Any penalties incurred by the policyholder as a result of failing to make premium payments.

445.125(3m)(g)3.c. c. Any penalties incurred or money received as a result of cancellation or surrender of the life insurance policy.

445.125(3m)(g)4. 4. The nature of the relationship between the insurance intermediary who solicited or is selling the life insurance policy and the funeral establishment that will be providing funeral or burial merchandise or services under the burial agreement.

445.125(3m)(g)5. 5. The relationship of the life insurance policy to the funding of the burial agreement and the existence and terms of any guarantees, other than a guarantee specified in subd. 6., relating to the burial agreement.

445.125(3m)(g)6. 6. A list of the funeral merchandise and funeral services that are applied for or contracted for under the burial agreement and all relevant information concerning the price of the funeral services provided under the burial agreement, including a statement as to whether the purchase price of the funeral merchandise or funeral services provided under the burial agreement is guaranteed at the time of the purchase of the burial agreement or whether the purchase price of the funeral merchandise or funeral services provided under the burial agreement is to be determined at the time of need, and a statement that the price of the funeral merchandise or funeral services is subject to the limit specified in par. (f).

445.125(3m)(g)7. 7. All relevant information concerning what occurs, and whether any entitlements or obligations arise, if there is a difference between the proceeds of the life insurance policy and the amount of money actually needed to fund the burial agreement.

445.125(3m)(g)8. 8. Any restrictions, including geographic restrictions, or penalties relating to delivery or performance under the burial agreement, including any restrictions or penalties relating to the inability of the operator of the funeral establishment to perform.

445.125(3m)(g)9. 9. A statement as to whether a sales commission or other form of compensation is being paid to the agent who sold or solicited the sale of a burial agreement and, if so, the identity of the persons to whom the commission or other compensation is paid.

445.125(3m)(h) (h) If an applicant under par. (g) is terminating a trust established under sub. (1), the agent, licensed funeral director or operator of the funeral establishment shall, before accepting the applicant’s initial premium, furnish written notice to the examining board that satisfies requirements established by the examining board by rule under par. (j) 1. d., and may not accept the applicant’s initial premium until 30 days after providing written notice under this paragraph.

445.125(3m)(hm) (hm) An agent authorized by a licensed funeral director or operator of a funeral establishment under par. (b) 2. a. may not engage in unfair or deceptive acts or practices specified in the funeral industry practices regulations of the federal trade commission, and shall comply with requirements to prevent unfair or deceptive acts or practices specified in such regulations.

445.125(3m)(i) (i)

445.125(3m)(i)1. 1. A licensed funeral director or operator of a funeral establishment who, either directly or through an agent, solicits the sale of or sells a burial agreement funded with the proceeds of a life insurance policy shall maintain a record of the burial agreement that identifies the life insurance policy used to fund the agreement.

445.125(3m)(i)2. 2. The funeral director under subd. 1. or the funeral director in charge of the funeral establishment under subd. 1. shall make a record maintained under subd. 1. available to the examining board if the board submits a written request to examine the record to the funeral director at least 3 days before the examination is to occur.

445.125(3m)(j) (j)

445.125(3m)(j)1. 1. The examining board shall promulgate rules establishing all of the following:

445.125(3m)(j)1.a. a. Training requirements that an insurance intermediary licensed under ch. 628 must satisfy to sell or solicit the sale of a burial agreement under this subsection.

445.125(3m)(j)1.b. b. Minimum standards that an individual burial agreement must satisfy if it is funded with the proceeds of a life insurance policy.

445.125(3m)(j)1.c. c. Minimum standards that a contract between an agent and an operator of a funeral establishment must satisfy to authorize the agent to sell or solicit the sale of a burial agreement funded with the proceeds of a life insurance policy on behalf of the operator of the funeral establishment.

445.125(3m)(j)1.d. d. The form and content of written notice that a licensed funeral director, operator of a funeral establishment or agent of a licensed funeral director or operator of a funeral establishment is required to provide to the examining board under par. (h).

445.125(3m)(j)2. 2. The examining board may promulgate rules establishing standards for marketing practices for a burial agreement that is funded with the proceeds of a life insurance policy, including standards for telephone solicitation of prospective purchasers. The rules promulgated under this subdivision may prohibit a method of telephone solicitation if the examining board determines that the prohibition is necessary to protect the public.

445.125(3m)(j)3. 3. The examining board shall prepare and distribute a booklet that describes the differences between funding a burial agreement with the proceeds of a life insurance policy under this subsection and entering into a burial agreement funded by a trust under sub. (1). The examining board may charge a reasonable fee for the cost of preparation and distribution of the booklet.

445.125(4) (4) Applicability.

445.125(4)(a) (a) This section shall not apply to any of the following:

445.125(4)(a)1. 1. A contract to provide funeral and burial service for any person if such contract is incidental to maintaining such person in a home, hospital or institution.

445.125(4)(a)2. 2. The sale or delivery of cemetery lots, graves, outer burial containers preplaced into the burial excavation of a grave, cremation urns, mausoleum spaces, as defined in s. 157.061 (10), or grave or cemetery lot markers or monuments before their use is required or the sale of undeveloped spaces, as defined in s. 157.061 (17).

445.125(4)(bn) (bn) Sections 701.0410 to 701.0418 [Sections 701.0410 to 701.0417] do not apply to an agreement, interest, or dividend that is made irrevocable under sub. (1) (a) 2. to 4.

445.125 Note NOTE: The correct cross-reference is shown in brackets. Section 701.0418 was repealed by 2023 Wis. Act 127. Corrective legislation is pending.

445.125 History History: 1973 c. 227; 1977 c. 40; 1979 c. 175 s. 29; 1979 c. 221 s. 662; Stats. 1979 s. 445.125; 1981 c. 64; 1983 a. 448, 485, 538; 1985 a. 29; 1989 a. 307; 1991 a. 39, 221; 1995 a. 295; 1999 a. 9; 2001 a. 16; 2003 a. 167; 2005 a. 134; 2013 a. 92.

445.125 Cross-reference Cross-reference: See also ch. FD 6, Wis. adm. code.

445.13 445.13 Investigations; hearing; revocation of licenses.

445.13(1) (1) Subject to the rules promulgated under s. 440.03 (1), the examining board may make investigations, subpoena witnesses, conduct hearings, limit, suspend or revoke a license of a funeral director, a certificate of registration of an apprentice or a permit of an operator of a funeral establishment and reprimand a funeral director, apprentice or operator of a funeral establishment for any violation of 15 USC 45 and 57, of this chapter or of any rule of the department of health services or the examining board, for unprofessional conduct, including misrepresentation or fraud in obtaining the license, permit or certificate of registration, or for any violation of this chapter or any rule of the examining board by an agent authorized by the funeral director or operator of the funeral establishment under s. 445.125 (3m) (b) 2. a.

445.13(1e) (1e) In addition to or in lieu of a reprimand or limitation, suspension or revocation of a license or permit under sub. (1), the examining board may assess against any person who violates s. 445.12 (3g) or (3r) or 445.125 (3m) or a rule promulgated under s. 445.125 (3m) (j) a forfeiture of no more than $1,000 for each violation.

445.13(1m) (1m) The examining board shall investigate an allegation that a funeral director has failed to do any of the following:

445.13(1m)(a) (a) Mail or present a death record within 10 days after receipt from the person responsible for completing the medical certification under s. 69.18 (2).