OklahomaHB 1498Oklahoma 2026 Regular SessionHouse

Insurance; prepaid funeral services; permit; application; Insurance Commissioner; violations; penalties; examination; repealer; effective date.

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Bill Overview

Analyzed Economic Effects

14 provisions identified: 2 benefits, 7 costs, 5 mixed.

More ways to fund prepaid funerals

Beginning November 1, 2025, prepaid funeral contracts can use assigned proceeds from standard life insurance, accident insurance, or fixed annuities. Fixed annuities can be individual or group contracts. For guaranteed contracts, the policy or annuity face value equals the purchase price; payment at death settles the funeral bill. For nonspecified contracts, sellers can collect only the actual retail cost at delivery and must refund excess proceeds. Sellers must keep the delivery price lists for six years.

Stronger safeguards for funeral contract holders

The Commissioner can use insurance-law remedies to protect prepaid funeral contract holders, related people, and the public. These include seeking a court-appointed receiver to oversee a business that withholds records or blocks an examination. Receivership is also available after failure to obtain or keep a permit within 90 days of written demand. These powers add to existing penalties and other enforcement tools.

Shorter cancellation notice for cemetery bonds

Beginning November 1, 2025, sureties can cancel or terminate covered cemetery bonds with 30 days' advance notice to the Commissioner. The required notice falls from 90 days. Sureties remain liable for obligations arising during the bond term before cancellation, termination, or expiration.

Narrower appeal rights for Commissioner actions

Beginning November 1, 2025, the stated appeal right covers an organization harmed by an Insurance Commissioner action. It no longer expressly covers every harmed person. Appeals go to the Oklahoma Insurance Department under the Administrative Procedures Act.

Annual filings required from funeral sellers

Sellers with outstanding prepaid funeral contracts must file a contract report and financial statement by March 15. The report lists contract holders, contract dates, deposits, and trust balances as of December 31. The statement lists each fund's assets, debts, and trust location and status. The contract report costs $50, plus applicable extra fees. Missing the statement deadline can bring penalties up to $1,000 per occurrence, formal reprimands, or permit suspension or revocation.

Cemetery sellers must report funds and changes

Cemetery merchandise sellers must file an online annual report by March 15 and pay a $200 filing fee. Reports show the trust bank, balance, yearly deposits, and method for calculating wholesale costs. Sellers that stop selling but keep prepaid funds must continue reporting until those funds are paid out. Legal or assumed business names, addresses, and email changes must be reported online within 30 days; late reports cost $50. Permit holders must adequately answer the Commissioner's inquiries within 20 days of receiving them.

Funeral sellers must keep permits current

Prepaid funeral sellers must use the name and address on their permit, display it, and prevent unauthorized use. A name-change application must list the business address and primary email; approval is required at least 30 days before the change. Covered contact and address changes must be reported online within 30 days. Late reports of legal or assumed business names, addresses, or email changes carry a $50 fee. Permit holders must adequately answer the Commissioner's inquiries within 20 days of receiving them.

Insurers face stronger data security duties

The law, effective November 1, 2025, requires Oklahoma insurers and insurance licensees to maintain written, risk-based information security programs. Duties include access controls, encryption, staff training, vendor safeguards, testing, secure disposal, and incident-response plans. Oklahoma-based insurers must certify compliance by April 15 each year and retain inspection-ready supporting records for five years. For those with boards, management must report annually in writing to the board or a committee on security status, testing, incidents, and fixes. The act separately sets the board's reporting requirement within one year after July 1, 2024.

Permit rules for prepaid funeral sellers

Funeral establishments need a current state permit to offer prepaid plans, accept payment, or sign contracts. The Commissioner can review managers' competence, finances, trustworthiness, and reputation when approving permits or organizations that create trusts. Trust approval rules do not block contracts funded by assigned insurance. Online applications and renewals cost $50, plus applicable extra fees, and permits expire December 31. Reinstatement within 90 days requires twice the renewal fee; later applications also require any fines and a report covering the expired period.

Funeral buyers gain remedies against violations

Unpermitted sellers cannot enforce their contracts; purchasers, heirs, or personal representatives can recover three times payments plus 6% annual interest. After notice and a hearing opportunity, the Commissioner can deny or withdraw permits and impose fines up to $1,000 per occurrence. After revocation or denied issuance or renewal, sellers generally must wait one year and prove compliance for another permit. Funding violations carry misdemeanor penalties of $100–$500, one to six months in jail, or both. Unlawful contracts, refused inspections, and related violations can bring separate felony charges: up to 10 years, $10,000, and victim restitution.

Stronger protection for prepaid cemetery funds

Prepaid cemetery merchandise sellers must maintain a trust fund or an approved surety bond covering at least the minimum funding requirement. Bonds are payable to the state for purchasers' benefit. The Commissioner can recover mishandled funds and impose civil penalties of $100–$1,000 per occurrence. A court-appointed receiver can oversee a business whose officers block records access, an examination, or questioning under oath. This remedy also applies when a required trust remains missing or inadequate 90 days after written demand.

Four Oklahoma insurance statutes are repealed

Beginning November 1, 2025, the law repeals Title 36 sections 1106.1, 6813, 6814, and 6815. The supplied text does not describe those sections, so their specific household effects cannot be identified.

Advance checks for funeral business transfers

A prepaid funeral business seller must notify the Commissioner online at least 45 days before ownership transfers. The buyer must apply for a permit at least 30 days before transfer, with both parties' signed agreement assuming obligations. The buyer also needs a funeral establishment license before taking control and generally cannot access trust money without authorization. The Commissioner can shorten or waive the 45-day notice for good cause.

Cemetery sellers face permit fees and checks

Prepaid cemetery merchandise sellers must apply online for permits; initial and renewal fees are $200. Permits expire March 15 of the following year, and reinstatement within 90 days costs $400. After 90 days, sellers must reapply, pay $400 plus any fines, and report services during the expired period. After notice and a hearing opportunity, the Commissioner can deny, suspend, or revoke permits for violations. Sellers whose permits were revoked or renewals refused can regain a permit by proving compliance.

Sponsors & Cosponsors

Sponsor

Mark Chapman
Republican • House

Cosponsors

Aaron Reinhardt
Republican • Senate
Mark Tedford
Republican • House

Roll Call Votes

All Roll Calls

Yes: 164 • No: 0

Senate vote • 4/28/2025

THIRD READING

Yes: 44 • No: 0

Senate vote • 4/17/2025

Committee vote: Business & Insurance

Yes: 9 • No: 0

House vote • 3/24/2025