Is a long-distance mortal-remains transport plan, paid for in advance and triggered only by death more than 75 miles from home, regulated as a Tennessee pre-need funeral contract?

Plain-English summary

Some companies sell a prepaid product that is essentially long-distance funeral logistics insurance: pay a one-time fee now, and if you die more than 75 miles from home, the company arranges the transport of your remains back to a licensed funeral provider. That includes the body container, permits, death certificate, and consular services if the death occurs abroad. Tennessee Commissioner of Commerce and Insurance Julie Mix McPeak asked AG Slatery whether these plans count as "pre-need funeral contracts" under the Tennessee Prepaid Funeral Benefits Act (Tenn. Code Ann. §§ 62-5-401 to -417).

The AG answered yes on both questions. The Act's definition of "pre-need funeral contract" in § 62-5-403(9) is broad: any agreement requiring advance payment for the final disposition of a dead human body, for funeral or burial services, or for the furnishing of personal property or funeral or burial merchandise, where the services are not immediately required. Long-distance remains transport fits the substance ("final disposition" plus funeral services support) and the timing (services not immediately required because the beneficiary is alive when the plan is purchased). Sellers of these plans must register with the Commissioner under § 62-5-404 and comply with the Act's trust/reserve provisions in §§ 62-5-404 through -412.

The bundling question (Question 2) does not change the answer. If a remains-transport plan is sold alongside another product that already qualifies as a pre-need funeral contract, both are subject to the Act.

The opinion adds an extra layer: these plans are also contracts of insurance. The two essential elements are present, contingency (the company owes nothing unless the beneficiary dies more than 75 miles from home) and indemnity (the company covers expensive long-distance transportation costs that the consumer would otherwise bear). So sellers face dual regulation: the Prepaid Funeral Benefits Act plus Tennessee's insurance laws.

Currency note

This opinion was issued in 2017. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The Prepaid Funeral Benefits Act's specific trust/reserve mechanics and registration thresholds may have been updated. Anyone selling or buying a remains-transport plan today should pull the current version of Tenn. Code Ann. §§ 62-5-401 through -417 and check with the Department of Commerce and Insurance about current registration and trust requirements.

Common questions

Q: What is a "pre-need funeral contract"?
A: Section 62-5-403(9) defines it broadly as any agreement, contract, or plan requiring advance payment, in lump sum or installments, for the final disposition of a dead human body, for funeral or burial services, or for the furnishing of personal property or funeral or burial merchandise, where the services are not immediately required. It can be funded by a pre-need funeral trust, a prearrangement insurance policy, or a combination.

Q: Does the Act actually regulate cemetery merchandise too?
A: There is a partial carve-out. The definition excludes cemetery merchandise and services regulated under Title 46, Chapter 1, Part 2, except as provided in § 62-5-406. So most cemetery-side products go through a different statutory channel.

Q: Why does it matter whether something is a pre-need funeral contract?
A: Sellers must register with the Commissioner of Commerce and Insurance under § 62-5-404 and comply with the Act's trust/reserve provisions. The point of the Act is to make sure money paid in advance is preserved so the consumer actually receives the promised services later. Selling without registering would be a regulatory violation.

Q: Why is a remains-transport plan also insurance?
A: Tennessee insurance doctrine (Tenn. Att'y Gen. Op. 10-85 (July 6, 2010); Tenn. Att'y Gen. Op. 08-159 (Oct. 8, 2008)) treats indemnity and contingency as the two essential elements of insurance. Indemnity is the promise to pay for or cover a loss; contingency is the uncertain triggering event. The plan in question covers a foreseeable but uncertain loss (long-distance remains repatriation) tied to a contingency outside the seller's control (the beneficiary's death occurring far from home). Sellers must therefore comply with insurance laws as well as the Prepaid Funeral Benefits Act.

Q: Does the 75-mile distance change anything?
A: It is the contingency that triggers the seller's contractual duty, but it does not take the plan out of the Act. The Act asks whether the contract is for funeral or burial services or related merchandise and whether the services are not immediately required. Both are met.

Q: What if the plan is bundled into a larger pre-need package?
A: The bundling does not change the analysis. A remains-transport plan sold alongside other pre-need products is still itself a pre-need funeral contract.

Q: What if a consumer paid for one of these plans and now has questions?
A: At the time of this opinion, the Department of Commerce and Insurance was the regulator for both the Prepaid Funeral Benefits Act and Tennessee insurance. A consumer with a current plan should check the seller's current registration and trust status with the Department.

Background and statutory framework

The Tennessee Prepaid Funeral Benefits Act was enacted to regulate the sale of prepaid funeral products. Section 62-5-402 frames the Act's purpose as setting "qualifications and procedures for registration and general regulatory requirements for the sale of prepaid funeral benefits." The substantive trust/reserve mechanics in §§ 62-5-404 through -412 are designed to protect consumers from the risk that money paid years before death is not there when it is needed.

The defined term "pre-need funeral contract" in § 62-5-403(9) is intentionally broad. It captures any agreement, contract, or plan requiring advance payment for final disposition of a dead human body or for related funeral, burial, or merchandise services where the services are not immediately required. It expressly contemplates funding through trusts, prearrangement insurance, or combinations.

Long-distance mortal-remains transport plans share the same economic structure as classic pre-need contracts: pay now, receive services later, where "later" is uncertain in time and in this case in geographic location. The opinion treats the substantive question as straightforward textual application: the contract is for "the final disposition of a dead human body," "the furnishing of personal property" (the transport container) and "funeral or burial services" (transport coordination, permits, embalming arrangements, consular services). The "not immediately required" element is satisfied because the beneficiary is alive at purchase.

The insurance overlay turns on the indemnity-plus-contingency formulation in Tennessee insurance doctrine. Both elements are clearly present. Sellers therefore live under dual regulation.

Citations

• Tenn. Code Ann. §§ 62-5-401 to -417 (Tennessee Prepaid Funeral Benefits Act)
• Tenn. Code Ann. § 62-5-402 (purpose)
• Tenn. Code Ann. § 62-5-403(9) (definition of pre-need funeral contract)
• Tenn. Code Ann. § 62-5-404 (registration)
• Tenn. Code Ann. §§ 62-5-404 through -412 (trust/reserve)
• Tenn. Code Ann. § 62-5-406 (cemetery-merchandise carve-out)
• Tenn. Code Ann. tit. 46, ch. 1, pt. 2 (cemetery regulation)
• Tenn. Att'y Gen. Op. 12-06 (Jan. 13, 2012)
• Tenn. Att'y Gen. Op. 10-85 (July 6, 2010)
• Tenn. Att'y Gen. Op. 08-159 (Oct. 8, 2008)

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2017/op17-007.pdf

Original opinion text

STATE OF TENNESSEE
OFFICE OF THE ATTORNEY GENERAL
February 3, 2017

Opinion No. 17-07

Mortal Remains Transport Plans under the Tennessee Prepaid Funeral Benefits Act

Question 1
Does a plan offered for a prepaid, nonrefundable fee to arrange the professional transport of a dead human body from any site of death to a licensed funeral provider, but only if the contract beneficiary's future death occurs more than seventy-five miles away from home, qualify as a "pre-need funeral contract" under the Tennessee Prepaid Funeral Benefits Act?

Opinion 1
Yes.

Question 2
If the plan described above is sold in conjunction with another contract that meets the definition of a "pre-need funeral contract," does the plan still qualify as a "pre-need funeral contract" under the Tennessee Prepaid Funeral Benefits Act?

Opinion 2
Yes. The analysis is the same whether the plan is sold alone or in conjunction with another contract that meets the definition of a "pre-need funeral contract."

ANALYSIS

The Tennessee Prepaid Funeral Benefits Act (codified at Tenn. Code Ann. §§ 62-5-401 to -417) establishes "the qualifications and procedures for registration and general regulatory requirements for the sale of prepaid funeral benefits in this state." Tenn. Code Ann. § 62-5-402. Entities and individuals who "offer or sell pre-need funeral contracts" in Tennessee must be registered with the Commissioner of Commerce and Insurance and comply with the provisions of the Act. Tenn. Code Ann. § 62-5-404. The Act is designed to ensure that sellers of pre-need funeral contracts reserve sufficient funds from the sales of these contracts so that they can provide consumers with the requisite contractual benefits when they come due. See Tenn. Code Ann. §§ 62-5-404 to -412; Tenn. Att'y Gen. Op. 12-06 (Jan. 13, 2012).

The Act defines a "pre-need funeral contract" as follows:

(A) "Pre-need funeral contract" means any agreement, contract or plan requiring the payment of money in advance, whether in a lump sum or installments and whether funded by a pre-need funeral trust or prearrangement insurance policy or combination of a pre-need funeral trust and a prearrangement insurance policy, that is made or entered into with any person, association, partnership, firm or corporation for the final disposition of a dead human body, for funeral or burial services or for the furnishing of personal property or funeral or burial merchandise, wherein the use of the personal property or the funeral or burial merchandise or the furnishing of professional services by a funeral director or embalmer is not immediately required.

(B) Except as otherwise provided in § 62-5-406, "pre-need funeral contract" does not mean the furnishing of cemetery merchandise and services otherwise regulated under title 46, chapter 1, part 2.

Tenn. Code Ann. § 62-5-403(9).

You ask whether this definition would apply to a plan offered for a prepaid, nonrefundable fee to arrange the professional transport of a dead human body from any site of death to a licensed funeral provider, but only if the contract beneficiary's future death occurs more than seventy-five miles away from home. In addition to this primary contingency, you indicate that these types of plans also require an individual to immediately "activate" the plan after the contract beneficiary dies and fulfill other certain requirements before the plan provider is required to provide any contractual services.

Assuming all contractual conditions are met, the plan provider's initial responsibility is to collect the dead body and arrange the initial stages of handling the body, e.g., embalming. Thereafter, the plan provider's contractual obligations typically include providing an appropriate container for transporting the body, obtaining all necessary permits and a death certificate, arranging for consular services when the death occurs in a foreign country, and transporting the body from the site of death to a licensed provider of funeral services.

This type of plan falls within the Act's definition of a "pre-need funeral contract." The statutory definition of a "pre-need funeral contract" includes "any" contract "for the final disposition of a dead human body, for funeral or burial services or for the furnishing of personal property or funeral or burial merchandise." The benefits offered under the plan at issue are clearly offered for this purpose. Moreover, the plan satisfies the definition's requirement that the services must not be "immediately required." The contract beneficiary is alive when the plan is purchased; the beneficiary (or someone on the beneficiary's behalf) pays for the plan "in advance." Thus, this plan falls within the ambit of "pre-need funeral contracts" for which the General Assembly has commanded that funds be entrusted or reserved until the contract beneficiary's death.

The analysis is the same whether the plan is sold alone or in conjunction with another contract that meets the definition of a "pre-need funeral contract." Accordingly, entities and individuals who offer or sell plans of the type described herein are subject to the requirements of the Tennessee Prepaid Funeral Benefits Act, regardless of whether the plan is sold alone or in conjunction with another contract that meets the definition of a "pre-need funeral contract."

Moreover, these types of contracts are also ones of insurance. As thoroughly discussed in prior opinions, indemnity and contingency are the essential elements of insurance. See Tenn. Att'y Gen. Op. 10-85 (July 6, 2010); Tenn. Att'y Gen. Op. 08-159 (Oct. 8, 2008). The contract at issue clearly contains a contingency element beyond the plan provider's control: the plan provider's contractual obligations do not arise unless the contract beneficiary dies more than seventy-five miles from home. And the contract's promise of indemnity, the provision of expensive transportation arrangements when an unplanned, long-distance death occurs, appears to be the motivating factor for an individual to enter one of these types of contracts. Hence, sellers of these types of contracts are not only subject to the Tennessee Prepaid Funeral Benefits Act but also to insurance regulation.

HERBERT H. SLATERY III
Attorney General and Reporter

ANDRÉE SOPHIA BLUMSTEIN
Solicitor General

SARAH ANN HIESTAND
Senior Counsel

LAURA T. KIDWELL
Senior Counsel

Requested by:
Julie Mix McPeak
Commissioner of Commerce and Insurance
500 James Robertson Parkway
Nashville, Tennessee 37243