Oklahoma insurance overhaul: HB1498 enforces stricter rules on funeral benefits and cybersecurity

Oklahoma lawmakers have passed House Bill 1498, introducing far-reaching amendments to the state's insurance code. The legislation brings about comprehensive reforms affecting both data security obligations and the regulation of prepaid funeral benefits, with an effective date of November 1, 2025. 

For insurers, the bill mandates the development of a comprehensive written information security program tailored to the size, complexity, and risk profile of the organization. Each licensee must conduct periodic risk assessments, designate responsible personnel, and implement administrative, technical, and physical safeguards to protect non-public information. Insurers domiciled in Oklahoma are required to submit an annual compliance certification to the Insurance Commissioner by April 15 and retain supporting records for five years. 

The law also introduces a detailed framework for handling cybersecurity incidents, including response planning, board oversight, audit trails, third-party vendor management, and staff training. These changes fall under amended Section 673 of Title 36 and are part of a broader effort to enhance consumer data protection across the sector. 

For funeral service providers, HB1498 revises and tightens the permit process for offering prepaid funeral benefits. Key updates include: 

• Electronic submission of applications and renewals through the Insurance Department. 
• Enforcement of deadlines with penalties for late filings. 
• Mandatory reporting on permit transfers, name changes, and trust fund details. 
• Stricter penalties for operating without a valid permit, including fines, permit suspension, and potential felony charges for willful violations. 

The bill clarifies that prepaid funeral contracts may be funded through life insurance or fixed annuities and stipulates how proceeds must be disbursed or refunded. Additionally, operators must submit annual financial reports by March 15, maintain historical price lists for six years, and respond to commissioner inquiries within 20 days. 

Enforcement authority is expanded, allowing the Insurance Commissioner to suspend or revoke permits, appoint conservators, or seek receivership under Articles 18 and 19 of Title 36, in cases of noncompliance. Violations may also prompt disciplinary actions by the Oklahoma Funeral Board. 

HB1498 was passed by the House of Representatives on March 24, 2025, and by the Senate on April 28, 2025. It awaits final procedural steps before enactment, but its provisions are set to reshape compliance and operational practices for insurers and funeral providers across the state.