Ohio Laws and Regulations
Exam Questions and Verified Answers
Latest 2026 Update | Graded A+ | 100%
Success
Right to rescind preneed contract - Correct Answer -- Within 7 days and receive
100% of payments.
- This must be in a notice on any preneed contract.
- No contract can contain a provision to restrict making a contract irrevocable.
- Once made irrevocable, the FD selling the contract assumes legal obligation to
provide funeral based on contract.
- No money in a trust fund for irrevocable preneed can be withdrawn to purchase
ins. policy/annuities unless it's to purchase life ins or annuity as an investment for
trust fund
Cancelling Revocable Preneed Contract - Correct Answer -If it is funded by an ins.
policy/annuity:
- Purchaser provides written notice to seller and ins. company with intent to
cancel
- 15 days after notice, the purchaser may cancel and change beni or reassign
benefits
,If funded by trust:
- Purchaser provides written notice to seller and ins. company with intent to
cancel
- 15 days after notice, the purchaser may cancel
- If no guaranteed stipulation, trustee gives purchaser all assets of trust existing at
time of cancellation (less any fees/distributions/expenses)
- If guaranteed stipulation, all assets returned minus a cancellation fee that may
be collected that is equal to or less than 10% of the value of the assets in the
trust. The aggregate amount of the cancellation fee and any initial service fee may
not exceed 10% of the value of the assets. In addition, any
fees/distributions/expenses incurred by trustee.
- If more than 1 purchaser entered into the contract, all must request a
cancellation, and gain a refund only of what funds each purchaser paid into the
trust (plus interest accumulated)
Transferring Irrevocable Preneed Contract - Correct Answer -If it is funded by an
ins. policy/annuity:
- Purchaser provides written notice to seller to transfer to successor seller
- 15 days after notice, rights shall be signed over to successor seller
- Ins. company shall confirm change of assignment with written notice to
policyholder
If funded by trust:
- Irrevocable: May be transferred to successor seller with written notice to
trustee/original seller. 15 days after trustee lists successor seller as the seller of
,the preneed and old seller relinquishes rights. The trustee shall confirm in written
notice to original seller, successor, and purchase.
- Guaranteed: Original seller can collect a transfer fee from the trust/trustee that
equals up to 10% of available assets. The aggregate amount of the transfer fee
and any initial service fee may not exceed 10% of the value of the assets.
- Non guaranteed: No transfer fee
If a seller transfers preneed trust from one institution to another, the original
trustee notifies the purchaser within 30 days after transfer occurs of
name/contact info for new institution, then new trustee notifies when received.
Preneed Payments Held in Trusts - Correct Answer -This applies to funds by any
other means than insurance policies/annuities
- Sellers of guaranteed services/goods may charge initial service fee not to exceed
10% of total payments. If paying in installments, service fee can be collected after
all have been paid.
- All payments must be made by check, cash. check, money order, debit/credit
card and payable to trustee
- Within 30 days of received payment, seller must remit payment to trustee
- Trust must be established at trust company, national bank, fed. savings bank, fed.
savings ass., or credit union
- Separate trusts should be used for separate contracts unless dictated by
purchaser(s)
- Trustee may pay taxes/expenses for a contract trust and may charge a fee for
managing trust
, Death of Beneficiary - Use of different firm - Correct Answer -- If a seller gets
notice a beni died and goods/services were provided by a different provider, the
seller shall direct the trustee within 30 days of notice to pay to the provider if still
unpaid or to the estate.
- If guaranteed, the seller may get 10% cancellation fee. The aggregate amount of
the cancellation fee and any initial service fee may not exceed 10% of the value of
the assets.
- If non guaranteed, no fee.
- A certified DC or other satisfactory evidence of death to the trustee must be
furnished. The trustee will promptly pay of accumulated payments/income. Doing
this relieves trustee of further liability on accumulated payments/income.
Preneed Recovery Fund - Correct Answer -- In custody of state, but not part of the
state treasury
- Fees collected for each preneed funeral contract sold in the state other than
those funded by the assignment of an existing insurance policy ($10), are
deposited into the fund
- Used to reimburse purchasers of contracts suffering financial loss due to
malfeasance, misfeasance, default, failure, or insolvency of a preneed by any
licensee, applicable to contracts made before and after development of this fund
- Not to be used for any other purpose, except those below
- At the end of fiscal year, if the fund balance exceeds 2mil, $10 fee is reduced
50%. If exceeds 3mil, the fee is suspended for the next fiscal year
- Uses include reimbursements on approved apps, buy insurance to cover losses,
to invest funds that aren't being used to reimburse loss and maintain fair reserves,
and paying expenses of the board for administering the fund
Exam Questions and Verified Answers
Latest 2026 Update | Graded A+ | 100%
Success
Right to rescind preneed contract - Correct Answer -- Within 7 days and receive
100% of payments.
- This must be in a notice on any preneed contract.
- No contract can contain a provision to restrict making a contract irrevocable.
- Once made irrevocable, the FD selling the contract assumes legal obligation to
provide funeral based on contract.
- No money in a trust fund for irrevocable preneed can be withdrawn to purchase
ins. policy/annuities unless it's to purchase life ins or annuity as an investment for
trust fund
Cancelling Revocable Preneed Contract - Correct Answer -If it is funded by an ins.
policy/annuity:
- Purchaser provides written notice to seller and ins. company with intent to
cancel
- 15 days after notice, the purchaser may cancel and change beni or reassign
benefits
,If funded by trust:
- Purchaser provides written notice to seller and ins. company with intent to
cancel
- 15 days after notice, the purchaser may cancel
- If no guaranteed stipulation, trustee gives purchaser all assets of trust existing at
time of cancellation (less any fees/distributions/expenses)
- If guaranteed stipulation, all assets returned minus a cancellation fee that may
be collected that is equal to or less than 10% of the value of the assets in the
trust. The aggregate amount of the cancellation fee and any initial service fee may
not exceed 10% of the value of the assets. In addition, any
fees/distributions/expenses incurred by trustee.
- If more than 1 purchaser entered into the contract, all must request a
cancellation, and gain a refund only of what funds each purchaser paid into the
trust (plus interest accumulated)
Transferring Irrevocable Preneed Contract - Correct Answer -If it is funded by an
ins. policy/annuity:
- Purchaser provides written notice to seller to transfer to successor seller
- 15 days after notice, rights shall be signed over to successor seller
- Ins. company shall confirm change of assignment with written notice to
policyholder
If funded by trust:
- Irrevocable: May be transferred to successor seller with written notice to
trustee/original seller. 15 days after trustee lists successor seller as the seller of
,the preneed and old seller relinquishes rights. The trustee shall confirm in written
notice to original seller, successor, and purchase.
- Guaranteed: Original seller can collect a transfer fee from the trust/trustee that
equals up to 10% of available assets. The aggregate amount of the transfer fee
and any initial service fee may not exceed 10% of the value of the assets.
- Non guaranteed: No transfer fee
If a seller transfers preneed trust from one institution to another, the original
trustee notifies the purchaser within 30 days after transfer occurs of
name/contact info for new institution, then new trustee notifies when received.
Preneed Payments Held in Trusts - Correct Answer -This applies to funds by any
other means than insurance policies/annuities
- Sellers of guaranteed services/goods may charge initial service fee not to exceed
10% of total payments. If paying in installments, service fee can be collected after
all have been paid.
- All payments must be made by check, cash. check, money order, debit/credit
card and payable to trustee
- Within 30 days of received payment, seller must remit payment to trustee
- Trust must be established at trust company, national bank, fed. savings bank, fed.
savings ass., or credit union
- Separate trusts should be used for separate contracts unless dictated by
purchaser(s)
- Trustee may pay taxes/expenses for a contract trust and may charge a fee for
managing trust
, Death of Beneficiary - Use of different firm - Correct Answer -- If a seller gets
notice a beni died and goods/services were provided by a different provider, the
seller shall direct the trustee within 30 days of notice to pay to the provider if still
unpaid or to the estate.
- If guaranteed, the seller may get 10% cancellation fee. The aggregate amount of
the cancellation fee and any initial service fee may not exceed 10% of the value of
the assets.
- If non guaranteed, no fee.
- A certified DC or other satisfactory evidence of death to the trustee must be
furnished. The trustee will promptly pay of accumulated payments/income. Doing
this relieves trustee of further liability on accumulated payments/income.
Preneed Recovery Fund - Correct Answer -- In custody of state, but not part of the
state treasury
- Fees collected for each preneed funeral contract sold in the state other than
those funded by the assignment of an existing insurance policy ($10), are
deposited into the fund
- Used to reimburse purchasers of contracts suffering financial loss due to
malfeasance, misfeasance, default, failure, or insolvency of a preneed by any
licensee, applicable to contracts made before and after development of this fund
- Not to be used for any other purpose, except those below
- At the end of fiscal year, if the fund balance exceeds 2mil, $10 fee is reduced
50%. If exceeds 3mil, the fee is suspended for the next fiscal year
- Uses include reimbursements on approved apps, buy insurance to cover losses,
to invest funds that aren't being used to reimburse loss and maintain fair reserves,
and paying expenses of the board for administering the fund
