For the purposes of this part:

1. (1) "Cancellation" means the termination or transfer of a prepaid funeral benefits contract by the purchaser, prior to the seller's performance of the contract, as a result of action by the purchaser or his or her agents or assigns, including, but not limited to:

   1. (A) Notifying the seller of the purchaser's intent to cancel the contract;
   2. (B) Transferring or attempting to transfer the contract or funding mechanism to a substitute provider;
   3. (C) Changing the beneficiary of a life insurance policy, certificate, or annuity contract used to fund a prepaid funeral benefits contract from the seller to a substitute provider or person; or
   4. (D) Changing an assignment of rights to the proceeds from the seller to a substitute provider or person;

2. (2) "Contract beneficiary" means any natural person designated in a prepaid funeral benefits contract upon whose death funeral services or funeral merchandise, or both, shall be:

   1. (A) Performed;
   2. (B) Provided; or
   3. (C) Delivered;
3. (3) "Existing insurer" means the insurance company whose policy or certificate or annuity contract is or will be changed or affected in a manner described within the definition of "replacement";

4. (4) "Existing policy or contract" means an individual life insurance policy (policy), group life insurance policy (or certificate evidencing coverage under a group life insurance policy), or annuity contract (contract) in force, including a:

   1. (A) Policy or certificate under a binding or conditional receipt; or
   2. (B) Policy, certificate, or annuity contract that is within an unconditional refund period;

5. (5)

   1. (A) "Financed purchase" means the purchase of a new insurance policy, certificate, or annuity contract involving the actual or intended use of funds obtained by the withdrawal or surrender of, or by borrowing from, values of an existing policy, certificate, or annuity contract to pay all or part of any premium due on the new:

      1. (i) Policy;
      2. (ii) Certificate; or
      3. (iii) Annuity contract.
   2. (B) "Financed purchase" within the meaning of this part does not constitute an extension of consumer credit for purposes of state or federal law;
6. (6) "Preneed insurance" means any life insurance policy, certificate, or annuity contract that funds a prepaid funeral benefits contract as defined in Arkansas Code § 23-40-103(15);
7. (7) "Prepaid funeral benefits contract" means a contract as defined in Arkansas Code § 23-40-103(15);

8. (8) "Producer" means agents, brokers, and any other person who:

   1. (A) Has received qualification for a licensure to sell, solicit, or negotiate life insurance under Arkansas Code § 23-64-507(a)(1); or
   2. (B) Is permitted to sell funeral expense insurance under Funeral Expense Insurance, 23 CAR pt. 91;

9. (9) "Replacement" means a transaction in which a new policy or certificate or annuity contract is to be purchased, and it is known or should be known to the proposing producer, or to the proposing insurer if there is no producer, that by reason of the transaction, an existing policy or certificate or annuity contract has been or is to be:

   1. (A) Lapsed, forfeited, surrendered or partially surrendered, assigned to the replacing insurer, or otherwise terminated;
   2. (B) Converted to reduced paid-up insurance, continued as extended term insurance, or otherwise reduced in value by the use of nonforfeiture benefits or other policy values;
   3. (C) Amended so as to effect either a reduction in benefits or in the term for which coverage would otherwise remain in force or for which benefits would be paid;
   4. (D) Reissued with any reduction in cash value; or
   5. (E) Used in a financed purchase;
10. (10) "Replacing insurer" means the insurance company that issues or proposes to issue a new policy or contract that replaces an existing policy or contract or is a financed purchase; and

11. (11) "Seller" means the organization:

    1. (A) Selling prepaid funeral benefits; or
    2. (B) Owning any interest in any contract for prepaid funeral benefits.