Section R. 456.1503 - Merchandise trust fund agreementsRule 503. Cemeteries that entered into contracts for merchandise or services after October 30, 1972, and before January 1, 2005, shall establish and maintain a merchandise trust account. A registrant shall submit a copy of the merchandise trust fund agreement to the commissioner. In addition to the requirements specified in section 16 of the act, MCL 456.536 and R 456.1501, a merchandise trust agreement shall provide all of the following:
(a) Deposits made to the merchandise trust account shall be invested by the trustee only as directed in the trust agreement. All trust investments and agreements shall provide for a standard not less than the standard of care in the prudent investor rule. Additionally, funds shall not be invested in any of the following: (i) Life insurance policies on any person.(ii) A company owned or operated by a registrant or its authorized agent.(iii) Loans to any person directly connected with or employed by a registrant or its agents.(b) Deposits to the merchandise trust account shall be certified by an officer of the registrant or agents authorized by a registrant to act in its behalf.(c) Withdrawals from the merchandise trust account shall be made on the presentation to the trustee of an affidavit certified by the registrant that the cemetery merchandise or services have been installed, delivered, performed, or terminated. Withdrawals shall not be made in excess of the funds actually held on deposit for the merchandise or services that were delivered or performed. The trustee shall retain the affidavit as a permanent part of the trust records, and the registrant shall keep a copy.(d) Not less than an annual accounting period shall be established, and that the trustee shall furnish to the registrant an accounting that contains all of the following information: (i) A separate listing by cost and fair market value of all assets held with totals.(ii) Total deposits made to the trust account during the reporting period and the total to date.(e) A certification by the registrant to the trustee that the total assets of the merchandise trust account are not less than equal to the total obligations, as determined by the current deposits required by R 456.1501(1).(f) That the commissioner may inspect the related records of the cemetery, the registrant, and trustee.Mich. Admin. Code R. 456.1503
2015 MR 19, Eff. 10/6/2015