Sec. 12. (a) This section applies to contracts for prepaid services or merchandise, or both, entered into under this chapter before January 1, 1996.

(b) A purchaser may enter into more than one (1) contract under this chapter for prepaid services or merchandise, or both. Each contract may be funded with cash, either in a lump sum or installment payments, or an insurance policy, or both. The purchaser may revoke the contract if the purchaser sends the seller written notice of the revocation within thirty (30) days after the contract is signed by the purchaser and seller. If a purchaser revokes a contract the seller shall refund to the purchaser, without interest, all property used to fund the contract. If the seller receives payment of at least five hundred dollars ($500) in cash that must ultimately be placed in trust or escrow under this section, the seller shall, not more than five (5) days after receiving the payment, deposit the payment in escrow pending irrevocable deposit to trust or escrow authorized by IC 30-2-10. Thirty (30) days after the contract is signed all property paid or delivered to the seller to fund each contract shall be irrevocably deposited by the seller to trust or escrow authorized by either IC 30-2-10 or IC 23-14-49-1. All property received for services or merchandise sold by a seller licensed under IC 25-15 shall be irrevocably deposited to trust in compliance with IC 30-2-10. All sellers shall guarantee the provision of all services and merchandise sold under a contract authorized by this chapter.

(c) If a contract under this chapter is funded with an insurance policy, the ownership of the insurance policy must be irrevocably assigned to a trustee. The seller may not borrow against, pledge, withdraw, or impair the cash value of the policy.

(d) A finance charge may be assessed on a contract sold on an installment basis, and the seller shall disclose to the purchaser all the applicable requirements under federal and state law.

(e) A seller or successor seller who has accepted cash or an insurance policy, or both, as full payment of a contract under subsection (b), is responsible for providing all contracted prepaid services and merchandise if the insurance company or trust company used to fund the contract is insolvent.

(f) A purchaser who purchases a contract with cash in a lump sum or through an insurance contract shall make the payment for the contract payable only to the seller. A purchaser who purchases a contract with cash in installments may make payments for the contract to the seller.

As added by P.L.200-1991, SEC.1. Amended by P.L.1-1992, SEC.159; P.L.207-1993, SEC.29; P.L.120-1994, SEC.3; P.L.241-1995, SEC.6; P.L.52-1997, SEC.52.