With the backdrop of another major preneed debacle, Missouri turns its attention (yet again) to the assignment of insurance policies to funeral homes. On September 25th, the State Board of Embalmers and Funeral Directors will consider a regulation proposal addressing insurance assignments. Is it, or is it not, a preneed contract? The industry, and the staff, need an answer.
The proposal establishes a presumption that all insurance assignments give rise to a preneed contract. I don’t have a problem with such a presumption so long as the funeral home is given the opportunity to rebut that presumption. The regulation does provide a mechanism for rebuttal, but no guidelines are provided as to what would be excluded from the preneed definition. Instead, the intent of each funeral director must be examined, and to compound matters, the proposal references ‘intent’ twice. There is the question of whether the funeral director had intent to use the assignment for "payment in advance" for goods and services. And, there is also the question of whether the funeral director had intent to form a preneed contract. (We can reasonably predict the funeral director’s answer to the latter inquiry.)
To avoid a circular inquiry in the mind of the funeral director (and an examination backlog), the Board needs to establish a set of facts that would reasonable exclude transactions that do not constitute the sale of an insurance funded preneed contract.