523A.203 Financial institution trustees — qualification and investment requirements.
1. A financial institution may serve as a trustee if granted those powers under the laws of this state or of the United States. A financial institution acting as a trustee of trust funds under this chapter shall invest the funds in accordance with applicable law.
2. A financial institution acting as a trustee of trust funds under this chapter has a fiduciary duty to make reasonable investment decisions and to properly oversee and manage the funds entrusted to it. The trustee shall use the judgment and care under the circumstances then prevailing that persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not in regard to speculation but in regard to the permanent disposition of their funds, considering the probable income as well as the probable safety of their capital. The commissioner may take enforcement action against a financial institution in its capacity as trustee for a breach of fiduciary duty proven under this chapter.
3. Moneys deposited under a master trust agreement may be commingled by the financial institution for investment purposes if each deposit includes a detailed listing of the amount deposited in trust for each beneficiary and maintenance of a separate accounting of each purchaser’s principal, interest, and income.
4. Subject to a master trust agreement, the seller may appoint an independent investment adviser to advise the financial institution about investment of the trust funds.
5. Subject to agreement between the parties, the financial institution may receive a reasonable fee from the trust funds for services rendered as trustee. The trust shall pay the trust operation costs and any annual audit fees.
6. A financial institution acting as a trustee of trust funds under this chapter shall notify each purchaser within sixty days from the date of deposit confirming that a deposit has been made establishing a trust fund for the purchaser’s payments made under the purchase agreement.
7. The seller or any officer, director, agent, employee, or affiliate of the seller shall not serve as trustee. A financial institution holding trust funds shall not do any of the following:
a. Be owned, under the control of, or affiliated with a seller.
b. Use any funds required to be held in trust under this chapter to purchase an interest in any contract or agreement to which a seller is a party.
c. Otherwise invest, directly or indirectly, in a seller’s business operations.
d. Use any funds required to be held in trust pursuant to section 523A.201 to purchase an insurance policy or annuity.
8. Unless proceeding under section 523A.403, investment and management decisions for all trust funds shall be made in accordance with the provisions of section 633A.4302.
2001 Acts, ch 118, §21; 2005 Acts, ch 128, §3; 2007 Acts, ch 175, §10; 2008 Acts, ch 1103, §2, 3
Referred to in §523A.807
Structure Iowa Code
Chapter 523A - CEMETERY AND FUNERAL MERCHANDISE AND FUNERAL SERVICES
Section 523A.101 - Short title.
Section 523A.102 - Definitions.
Section 523A.201 - Establishment of trust funds.
Section 523A.202 - Trust fund deposit requirements.
Section 523A.203 - Financial institution trustees — qualification and investment requirements.
Section 523A.204 - Preneed seller annual reporting requirements.
Section 523A.205 - Financial institution annual reporting requirements.
Section 523A.206 - Examinations — authority and scope.
Section 523A.207 - Report by certified public accountants — penalties — waiver — confidentiality.
Section 523A.301 - Definition.
Section 523A.302 - Identification of merchandise and service provider.
Section 523A.303 - Disbursement of remaining funds.
Section 523A.401 - Purchase agreements funded by insurance proceeds.
Section 523A.402 - Purchase agreements funded by annuity proceeds.
Section 523A.403 - Purchase agreements funded by certificates of deposit.
Section 523A.404 - Merchandise delivered to the purchaser or warehoused.
Section 523A.405 - Bond in lieu of trust fund.
Section 523A.501 - Preneed sellers — licenses.
Section 523A.502 - Sales agents — licenses.
Section 523A.502A - Sales agent annual reporting requirements.
Section 523A.503 - Denial, suspension, revocation, and surrender of licenses.
Section 523A.504 - Appointment of sales agents — fee.
Section 523A.601 - Disclosures.
Section 523A.603 - Security and notice requirements.
Section 523A.604 - Purchase agreements — numbering.
Section 523A.701 - Misleading filings.
Section 523A.702 - Misrepresentations of government approval.
Section 523A.703 - Fraudulent practices.
Section 523A.704 - Violations.
Section 523A.801 - Administration.
Section 523A.802A - Service of process made on the commissioner as the agent for service of process.
Section 523A.803 - Investigations and subpoenas.
Section 523A.805 - Cease and desist orders — injunctions.
Section 523A.806 - Court action for failure to cooperate.
Section 523A.807 - Prosecution for violations of law.
Section 523A.808 - Cooperation with other agencies.
Section 523A.809 - Rules, forms, and orders.
Section 523A.810 - Date of filing — interpretive opinions.
Section 523A.810A - Electronic filing.
Section 523A.811 - Receiverships.
Section 523A.812 - Insurance division regulatory fund.
Section 523A.813 - License revocation — recommendation by commissioner to board of mortuary science.