Issue Date:  January 19, 2018
Volume 45 • Issue 2 • Pages 112—114
Title 10
10.29.15 Family Security Trust Fund
Authority: Health Occupations Article, §§7–4A–01, 7-4A-03(h), 7–4A–04,
7–4A–05, 7–4A–11, 7–4A–12, and 7-4A-13, Annotated Code of Maryland
Notice of Proposed Action
The Secretary of Health proposes to amend Regulations .02—.05, .07, and .08 under COMAR 10.29.15 Family Security Trust Fund. At this time, the Secretary is also withdrawing the amendments to Regulations .02—.05, .07, and .08 under COMAR 10.29.15 Family Security Trust Fund as proposed in 43:26 Md. R. 1494—1495 (December 23, 2016) and as reproposed in 44:12 Md. R. 595 (June 9, 2017).
This action was considered at a public meeting held on October 11, 2017, notice of which was given by publication on the Board’s website at pursuant to General Provisions Article, §3–302(c), Annotated Code of Maryland.
Statement of Purpose
The purpose of this action is to:
(1) Clarify that representatives from two of the State’s trade associations sit on the Family Security Trust Fund Advisory Committee;
(2) Provide that a preneed contract may be entered into by a licensed mortician, a licensed funeral director, or by a surviving spouse along with their supervising mortician or supervising funeral director;
(3) Provide that the holder of a surviving spouse license cannot enter into a contractual agreement for mortuary sciences services or merchandise between a buyer and a funeral establishment;
(4) Require that fee notices be sent out by first class mail or by electronic means;
(5) Clarify that failure to pay the required fee and late fee by the required date may result in possible suspension of the supervising mortician’s license;
(6) Prohibit the Board from issuing a license to an establishment until payment of the required fees, including the late fee, is received;
(7) Provide that required contributions to the Fund may not be prorated;
(8) Clarify certain procedures for filing a claim to the Fund, for receiving compensation from the Fund, and for recovering funds from those deemed responsible for a claim to the Fund; and
(9) Provide that, if the Fund falls below $1 million, the Board shall assess a mandatory contribution to the Fund which the Board may deem to be less than the yearly $375 payment.
Comparison to Federal Standards
There is no corresponding federal standard to this proposed action.
Estimate of Economic Impact
The proposed action has no economic impact.
Economic Impact on Small Businesses
The proposed action has minimal or no economic impact on small businesses.
Impact on Individuals with Disabilities
The proposed action has no impact on individuals with disabilities.
Opportunity for Public Comment
Comments may be sent to Michele Phinney, Director, Office of Regulation and Policy Coordination, Maryland Department of Health, 201 West Preston Street, Room 512, Baltimore, MD 21201, or call 410-767-6499 (TTY 800-735-2258), or email to, or fax to 410-767-6483. Comments will be accepted through February 20, 2018. A public hearing has not been scheduled.
.02 Definitions.
   A. (text unchanged)
   B. Terms Defined.
      (1) “Advisory Committee” means a committee comprised of three Board members and a representative from [both] two of the trade associations which is assisted by Board Counsel provided by the Attorney General’s Office and Board Administrative personnel to administer the Fund.
      (2)—(3) (text unchanged)
      (4) “Claimant” means an individual, or legal representative of the individual[, or any other individual who on behalf of themselves or any other individual] who files a claim for loss.
      (5)—(6) (text unchanged)(5)—(6) (text unchanged)
      (7) “Preneed contract” means an agreement entered into by a licensed mortician, a licensed funeral director, or a holder of a surviving spouse license with a supervising mortician or a supervising funeral director with a buyer in advance of the death of that individual or beneficiary.
      (8) “Seller” means a licensed mortician[,] or licensed funeral director[, or a holder of a surviving spouse license] who agrees to sell certain mortuary sciences services or merchandise in a contractual arrangement between a buyer and a funeral establishment.
.03 Mandatory Fees.
   A. (text unchanged)
   B. The Board shall send out fee notices to the licensed establishments via first class mail or by any electronic means by September 1.
   C.—D. (text unchanged)
   E. If the establishment does not pay the mandatory fee and the late fee by December 30, the Committee shall refer the delinquent establishments to the Board for formal action to include possible suspension of the supervising mortician license.
   F. [The] In addition to any applicable mandatory late fee, the Board [shall]:
      (1) Shall assess a $40 fee for returned checks; and
      (2) May not issue a license until the payment is made, including the late fee if after December 1.
   G. (text unchanged)
   H. Mandatory contributions to the Fund may not be prorated.
.04 The Family Security Trust Fund.
   A. The Board shall:
      (1) Collect the mandatory contributions;
      (2) Deposit the funds;
      (3)—(4) (text unchanged)
   B.—D. (text unchanged)
   E. Once the Fund has accumulated a balance of $1,000,000 the Board [may] shall cease to collect the annual fee.
   F. [Once] If the Fund [balance is] falls below $1,000,000, the Board shall reinstate [the collection of the annual] a fee up to $375 to be assessed by the Board.
   G.—H. (text unchanged)
.05 Filing a Claim.
   A. (text unchanged)
   B. The Board shall issue a final order against a licensee[, funeral establishment, or corporation,] for violation involving a transaction that relates to preneed funeral planning that occurred in the State and falls within its jurisdiction.
   C. The claimant shall:
      (1)—(2) (text unchanged)
      (3) Present all claims for losses to the [Advisory Committee] Board within 1 year:
          (a)—(b) (text unchanged)
          (c) At a later date at the discretion of the [Committee] Board.
   D. (text unchanged)
   E. All claims shall be filed with the[:
      (1) Fund; and
      (2) Advisory committee chair, whose name and address shall appear on the claim form] Fund.
   F. (text unchanged)
.07 Restitution.
   A. A claimant may receive compensation from the Fund for an actual preneed trust fund loss that occurred on or after January 1, 2010. All payments shall be a matter [of privilege and not of right] to be decided by the full Board in its discretion.
   [B. The Board of Morticians and Funeral Directors shall determine to its satisfaction that the preneed seller does not posses the financial means to deliver or provide the prearranged merchandise or service.]
   [C.] B.[D.] C. (text unchanged)
   [E. The payment of claims shall be made in the order in which the claim was received by the Board.]
   [F.] D. The President of the Board [and the President of the Advisory Committee] shall sign [off on the payment of] claims by designation to appropriate staff for payment from the Fund.
   [G.] E. (text unchanged)
   [H.] F. If at any time[, in the opinion of the Advisory Committee,] there are not sufficient funds on hand to pay all claims in full, the [Advisory Committee] Board may, in its discretion, pay the approved claims pro rata or defer payment until such time as adequate funds are available.
   [I.] G. The [Advisory Committee] Board shall determine the maximum cumulative amounts which shall be paid in respect to any one claim or multiple claims by a single claimant arising from the same licensee involved in either a client or fiduciary relationship. The percentage of payment on the dollar remains the same for all victims of the same licensee.
.08 Recovery of Funds.
   A. In the event restitution is made to a claimant under this chapter, the Board [shall claim the reimbursed amount and] may bring action [it deems advisable] to the extent authorized by statute against any person, including a [preneed] licensee who is determined by the Board to be responsible for the claim.
   B. (text unchanged)
Secretary of Health