Survey of State Regulators - Regulation of Sales of Pre-Need Funeral Plans

U.S. Government Accountability Office

Contents

• Introduction
• Contact Information
• State Regulations on Sales of Pre-Need Funeral Plans
• State Regulations on Sales of Pre-Need Funeral Plans (Continued)
• Enforcement Mechanisms
• Enforcement Mechanisms (Continued)
• Enforcement Mechanisms (Continued)
• Consumer Protections
• Consumer Protections (Continued)
• Consumer Protections (Continued)
• General Questions on the Death Care Industry
• Completing Your GAO Survey on Regulation of Sales of Pre-Need Funeral Plans

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Introduction

Welcome to GAO's Survey of State Regulators - Regulation of Sales of Pre-Need Funeral Plans.

At the request of Congress, the U.S. Government Accountability Office (GAO) is reviewing federal and state regulation of the death care industry. This survey instrument, covering sales of pre-need funeral plans, will help us gather information on how your state (1) regulates the death care industry; (2) enforces its rules, regulations, and laws; and (3) provides consumer protections. Please note that the focus of the survey instrument is on the regulations and consumer protections that are specific to the death care industry and not on public health or environmental regulations. You have received this survey because you have been identified as the proper point of contact within your state for addressing questions related to regulation of sales of pre-need funeral plans.

Please note: For purposes of this survey, the term "pre-need funeral plans" refers to the purchase of funeral goods and services to be provided at a later date when death occurs. It does not refer to the purchase of a final expense insurance policy that will pay the costs for funeral goods and services upon death.

Because we are collecting comparable information from all 50 states, we encourage you to respond to this survey so that we can have an accurate and complete accounting of the regulatory framework and enforcement mechanisms that are in place for addressing the death care industry in all 50 states.

To learn more about completing the survey, printing your responses, and whom to contact if you have questions, _____.

Thank you in advance for your time and consideration.

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Contact Information

Name of state: _____

Please enter the following information in the event we need to clarify a response.

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Name:

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Title:

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Years with office/agency:

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Name of office/agency:

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E-mail address:

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Phone number:

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State Regulations on Sales of Pre-Need Funeral Plans

1. Other than rules and regulations that generally apply to all businesses, including insurance companies, does your state have rules and regulations in place that specifically address sales of pre-need funeral plans?

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2. What type of entity do you represent that regulates sales of pre-need funeral plans in your state?

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If "other" selected, please briefly describe your entity here.

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2a. How many membership positions are authorized for your board or commission?

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2b. Currently, how many members are serving on your board or commission?

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2c. Please indicate the number of authorized board or commission positions that are required to represent each of the following entities. (Enter numbers. If none, enter 0 for that entity. If unknown or no requirements exist, leave space blank.)

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        Funeral homes or funeral directors/embalmers

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        Cemeteries or cemetery operators

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        Crematories or crematory operators

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        State agencies or offices

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        Board or commission employees

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        Consumers or the general public

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        Other - Please name the entities
        represented by the other board or
        commission members and how many
        board or commission members
        represent each entity.

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3. Are all sales of pre-need funeral plans within your state subject to regulation by your state?

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3a. What types of pre-need funeral plans are exempt from regulation?

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4. Regarding your state's rules or regulations that address the sales of pre-need funeral plans, which of the following are covered? (Check all that apply.)

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If "other" selected, please briefly describe the pre-need plans that are covered here.

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5. Do any other entities in your state regulate sales of pre-need funeral plans?

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5a. Please identify the other entities in your state that regulate sales of pre-need funeral plans.

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State Regulations on Sales of Pre-Need Funeral Plans (Continued)

6. What registration requirements, if any, does your state have regarding sellers of pre-need funeral plans (to include companies and their sales persons)?

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7. Does your state maintain data on the number of sellers of pre-need funeral plans (to include companies and their sales persons) that operate in your state?

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8. Approximately how many sellers of pre-need funeral plans (to include companies and their sales persons) currently operate in your state? (Enter numbers. If none, enter 0. If number is unknown, leave space blank.)

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Number of companies currently operating in your state

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Number of sales persons currently operating in your state

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9. Approximately how many of these sellers of pre-need funeral plans (to include companies and their sales persons) are subject to regulation in your state? (Enter numbers. If none, enter 0. If number is unknown, leave space blank.)

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Number of companies subject to regulation by your state

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Number of sales persons subject to regulation by your state

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10. Have any legislative or regulatory changes been proposed or enacted in your state since March 2003 that are directed at sales of pre-need funeral plans?

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11. What did the legislative or regulatory changes that were enacted involve? (Check all that apply. Also, please briefly describe all legislative or regulatory changes in question 11a and answer question 11b.)

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11a. If you checked any of the selections in question 11 above, please describe the changes and provide a citation to the applicable legislative or regulatory changes.

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11b. Of the legislative or regulatory changes directed at sales of pre-need funeral plans that were enacted in your state since March 2003, in your opinion, how much did these changes strengthen your state's regulatory program?

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12. What did the legislative or regulatory changes that were proposed but not enacted involve? (Check all that apply. If all were enacted, check "Not applicable".)

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If you answered "Other" above,
please enter your description here.

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13. How did these proposals for legislative or regulatory changes come about? (Check all that apply.)

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If you answered "Other" above,
please enter your description here.

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Enforcement Mechanisms

14. Do sellers of pre-need funeral plans (to include companies and their sales persons) have to be licensed to operate within your state?

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14a. What types of sellers of pre-need funeral plans (to include companies and their sales persons) do not have to be licensed to operate within your state?

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15. What are the requirements for becoming a licensed seller of pre-need funeral plans (to include companies and their sales persons) in your state? (Check all that apply.)

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If you answered "Other" above,
please enter your description here.

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16. How often do licenses have to be renewed for sellers of pre-need funeral plans (to include companies and their sales persons) ?

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If the renewal period varies,
please explain here.

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17. Does your state track violations of state rules or regulations involving sales of pre-need funeral plans?

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18. Approximately how many violations of state rules or regulations involving sales of pre-need funeral plans (to include companies and their sales persons) has there been since January 1, 2008? (Enter numbers. If none, enter 0. If number is unknown, leave space blank.)

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18a. If you are able to provide separate numbers of violations specifically for companies versus sales persons since January 1, 2008, please enter these numbers below. (Enter numbers. If none, enter 0. If number is unknown, leave space blank.)

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        If available, number of violations specifically
        involving companies since January 1, 2008

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        If available, number of violations specifically
        involving sales persons since January 1, 2008

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19. Please list up to three of the most prevalent types of violations since January 1, 2008 involving sales of pre-need funeral plans (to include companies and their sales persons).

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1.

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2.

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3.

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Enforcement Mechanisms (Continued)

20. Since January 1, 2008, has your state taken any actions against sellers of pre-need funeral plans (to include companies and their sales persons) for violations of state rules or regulations?

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21. Please indicate the type of action(s) -- and associated number of actions -- your state has taken since January 1, 2008, against sellers of pre-need funeral plans (to include companies and their sales persons) for violations of state rules or regulations.

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a. Notice of non-compliance (a caution or
    warning that a problem exists)

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If yes, please enter the number of such actions
taken since January 1, 2008. (Enter number.
If unknown, leave space blank.)

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b. Letter of reprimand (notification
    that a violation has occurred
    and an action may be taken)

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If yes, please enter the number of such actions
taken since January 1, 2008. (Enter number.
If unknown, leave space blank.)

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c. Assessment of investigative costs

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If yes, please enter the number of such actions
taken since January 1, 2008. (Enter number.
If unknown, leave space blank.)

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d. Monetary fine

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If yes, please enter the number of such actions
taken since January 1, 2008. (Enter number.
If unknown, leave space blank.)

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e. Probation

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If yes, please enter the number of such actions
taken since January 1, 2008. (Enter number.
If unknown, leave space blank.)

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f. Voluntary relinquishment of license,
    certificate, or registration

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If yes, please enter the number of such actions
taken since January 1, 2008. (Enter number.
If unknown, leave space blank.)

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g. Suspension of license

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If yes, please enter the number of such actions
taken since January 1, 2008. (Enter number.
If unknown, leave space blank.)

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h. Revocation of license

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If yes, please enter the number of such actions
taken since January 1, 2008. (Enter number.
If unknown, leave space blank.)

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i. Civil or criminal prosecution (either
    prosecution taken by your entity or
    transferred to another entity for
    prosecution)

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If yes, please enter the number of such actions
taken since January 1, 2008. (Enter number.
If unknown, leave space blank.)

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j. Other actions

    Please describe any other types of actions
    taken and indicate number of each type of
    action taken since January 1, 2008

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Description and number of actions:

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Enforcement Mechanisms (Continued)

22. How much of a challenge do the following pose in enforcing your state's rules or regulations involving sellers of pre-need funeral plans (to include companies and their sales persons)? (Select one answer in each row.)

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a. Lack of regulations for enforcing state laws

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b. Regulations are unclear or vague

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c. Insufficient funds and/or staff to enforce regulations

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d. Insufficient enforcement structure in place

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e. Implementing new laws or regulations that recently passed

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f. Other - Please explain below.

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If you answered "Other" above, please explain here.

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23. What is your state's biggest challenge in enforcing your state's rules or regulations involving sellers of pre-need funeral plans (to include companies and their sales persons)?

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If you answered "Other" above, please explain here.

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Consumer Protections

24. Does your state have, or has your state ever had, a fund that would protect consumers of pre-need funeral plans who suffered financial loses due to issues such as fraud, default, or insolvency?

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25. Which of the following best describes the funding of your state's fund to protect consumers of pre-need funeral plans?

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25a. In the most recent year that your state's fund to protect consumers of pre-need funeral plans was authorized, how much funding was authorized? (Enter dollar amount. If unknown, leave space blank.)

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26. Approximately what was the minimum and maximum amount of funding that was available for your state's fund at any point in time since 2003? (Enter dollar amounts. If unknown, leave space blank.)

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Minimum amount of funding available

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Maximum amount of funding available

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27. What is the maximum percentage or maximum dollar amount of a consumer's financial loss that is eligible to covered by this fund, assuming the funds are available? (Enter percent or dollar amount. If unknown, leave space blank.)

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Maximum percentage
of loss covered

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or

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Maximum dollar
amount of loss covered

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28. On average, how much of this fund has been utilized by consumers each year?

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29. Does your state require a percentage of pre-need sales revenues to be placed in trust?

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30. Approximately what percentage of pre-need sales revenues are required by your state to be trusted for each of the following? (Enter percents. If percent is unknown, leave space blank.)

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Percentage of pre-need sales revenues to be trusted for funeral goods:

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Percentage of pre-need sales revenues to be trusted for funeral services:

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Percentage of pre-need sales revenues to be trusted for cemetery goods:

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Percentage of pre-need sales revenues to be trusted for cemetery services:

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Percentage of pre-need sales revenues to be trusted for third party sellers of goods:

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31. If you could not answer all or parts of question 30 because your state has a different way of calculating the level of pre-need sales revenues that must be trusted, please explain in as much detail as possible how your state deals with this issue.

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Consumer Protections (Continued)

32. Which of the following describes your state's requirements on withdrawal of funds from a pre-need trust fund after the initial deposit is made? (Check all that apply.)

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Note: If you checked box #5 in question 32 above - Answer question 33.
          If you did NOT check box #5, go directly to question 34.

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33. (If a specified percentage or amount of trust fund dollars may be withdrawn by the trustee) What is the maximum percentage or amount of trust fund dollars that a trustee may withdraw after the initial deposit for each of the following time frames? (Enter percents or dollar amounts. If unknown, leave space blank.)

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Maximum percentage

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Maximum amount

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Check box
if no maximum

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a. Each year

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or

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1. No maximum

b. Over the life
    of the trust

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or

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1. No maximum

34. If purchasers of pre-need funeral plans within your state cancel their pre-need contracts, what refunds, if any, are they entitled to from their investment?

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If you answered "Other" above,
please describe here.

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35. Which of the following best describes your state's requirements regarding consumers' transfers of pre-need contracts to another state?

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36. In your state, are the following types of pre-need contracts currently required, permitted but not required, or prohibited? (Select one answer in each row.)

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a. Irrevocable contracts

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b. Revocable contracts

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c. Price guaranteed contracts

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d. Non-price guaranteed contracts

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37. Does your state track the amount of funds invested in pre-need funeral plans?

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37a. In calendar or fiscal year 2010, what was the amount of funds invested in pre-need funeral plans in your state? (Enter dollar amount. If unknown, leave space blank.)

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Consumer Protections (Continued)

38. Does your state maintain data on consumer complaints involving sales of pre-need funeral plans?

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39. Which agency or agencies within your state maintain data on consumer complaints involving sales of pre-need funeral plans?

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40. Approximately how many complaints did your state receive over the past three calendar or fiscal years involving sales of pre-need funeral plans? (Enter numbers. If none, enter 0. If number is unknown, leave space blank.)

Number of complaints received in:

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a. calendar or fiscal year 2008:

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b. calendar or fiscal year 2009:

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c. calendar or fiscal year 2010:

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41. What consumer protections, if any, does your state have in place concerning sales of pre-need funeral plans? (Check all that apply.)

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If you answered "Other" above, please explain here.

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42. Of the consumer protections your state has in place concerning sales of pre-need funeral plans, which one do you consider to be the most effective in protecting consumers?

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If you answered "Other" above, please explain here.

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43. Above and beyond the consumer protections your state already has in place concerning sales of pre-need funeral plans, what additional consumer protections, if any, do you believe would further enhance the protection of consumers?

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General Questions on the Death Care Industry

The remainder of the questions will focus on the death care industry, in general, and not just sales of pre-need funeral plans.

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44. From the perspective of your office, is there a need for the federal government to take a more active role in regulating the death care industry?

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44a. If you responded "Yes" in question 44, why is there is a need for the federal government to take a more active role? (Check all that apply.)

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         If you answered "Other"
         above, please explain here.

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Note: If you were directed to answer question 44a - Skip to question 45.

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44b. If you responded "No" in question 44, why is there not a need for the federal government to take a more active role. (Check all that apply.)

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         If you answered "Other"
         above, please explain here.

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45. From the perspective of your office, is there a need for your state government to take a more active role in regulating the death care industry?

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45a. If you responded "Yes" or "No" above, please explain your reason(s) below.

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46. Does your entity regulate any of the following segments of the death care industry? (Select one answer in each row.)

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a. Funeral homes

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b. Cemeteries

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c. Crematories

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d. Third party sellers of funeral goods

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Completing Your GAO Survey on Regulation of Sales of Pre-Need Funeral Plans

47. Have you completed your GAO survey on regulation of sales of pre-need funeral plans? (Answering "Yes" is equivalent to mailing a completed paper survey to us. It tells us that your answers are official and final.)

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Before exiting this survey, you may view and print your responses by clicking on the "Summary" link in the menu to the left.

Clicking on "Exit" below will return you to the main menu screen where you may re-enter this survey, open another death care survey, or exit altogether.

                                     Thank you very much for your assistance.

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