Section 31.06 - Pre-need Funeral Contracts and ArrangementsThe following information shall be adequately disclosed at the time an application is made, prior to accepting the applicant's initial premium or deposit; for a pre-need funeral contract and arrangement that is funded or to be funded by a life insurance policy:
(1) The fact that a life insurance policy is involved or being used to fund an arrangement;(2) The nature of the relationship among the soliciting producer or producers, the provider of the funeral or cemetery merchandise or services, the administrator and any other person;(3) The relationship of the life insurance policy to the funding of the arrangement and the nature and existence of any guarantees relating to the arrangement;(4) The impact on the arrangement: (a) Of any changes in the life insurance policy including but not limited to, changes in the assignment, beneficiary designation or use of the proceeds;(b) Of any penalties to be incurred by the policyholder as a result of failure to make premium payments;(c) Of any penalties to be incurred or monies to be received as a result of cancellation or surrender of the life insurance policy;(5) A list of the merchandise and services which are applied or contracted for in the arrangement and all relevant information concerning the price of the funeral services, including an indication that the purchase price is either guaranteed at the time of purchase or to be determined at the time of need in accordance with 239 CMR 4.00;(6) 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 actually needed to fund the arrangement in accordance with 239 CMR 4.00;(7) Any penalties or restrictions, including but not limited to geographical restrictions or the inability of the provider to perform, on the delivery of merchandise, services or the arrangement guarantee; and(8) That a sales commission or other form of compensation is being paid and the identity of the individuals or entities to whom it is paid.