Preneed Salesmen: How high a bar?

Posted on February 22, 2010 by Bill Stalter

 NPS salesmen had quite a reputation. Commission driven, some were reported to have earned a healthy six-figure salary. And, some had no prior experience in the funeral industry.

To curb the excesses committed by NPS salesmen, Missouri preneed reform bill requires preneed salesmen to be licensed, with a condition that they “have successfully passed the Missouri law examination as designated by the board”.

Since the effective date of the law (August 28th), preneed agents have been required to take the same law examination required of funeral directors. That examination has proved difficult for many preneed agent applicants, and issues were presented to the Missouri State Board of Embalmers and Funeral Directors at their February 4th meeting. The State Board held an open meeting by conference call on February 11th to facilitate further discussion of preneed agent licensing and the Missouri Law Test.

Two basic positions emerged during the February 11th conference call. The funeral directors’ camp views the preneed contract as the sale of a funeral, which should require the licensed funeral director. The proactive preneed seller views the preneed contract as a funding vehicle to pay for the goods and services described in the contract, which would require the salesman to be knowledgeable about the requirements of Chapter 436.

Historically, most Missouri preneed contracts were of the guaranteed variety. If the preneed contract was performed with little or no variation to the prearranged funeral, then the contract represents the purchase of a funeral. But, some families change the terms of their preneed contracts, and under such circumstances, the contract represents a funding vehicle. As more non-guaranteed contracts and final expense products become more common, fewer preneed contracts will represent the “sale of a funeral”.

For the time being, the State Board will continue to require the same law examination given to applicants for a funeral director’s license. But, is the funeral industry best served by restricting preneed agent licensing to legal testing imposed on funeral directors?
 

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Licensing cemeteries

Posted on July 25, 2009 by Bill Stalter

Recent problems in Illinois and Kansas have prompted funeral directors, and funeral regulators, to recommend that more regulation should be required of cemeteries, including licensing. What’s good for us is good for you.

When the Illinois Comptroller assured the public that the state was acting promptly to revoke Burr Oak’s license, many distraught families could have reasonably assumed Mr. Hynes was taking drastic action against the cemetery. When a regulator ‘jerks’ a funeral home license, the action puts that establishment out of business. Not so for the cemetery licenses required by Illinois and Missouri.

The licenses granted by these states authorize the cemetery to receive and administer funds for endowed care or preneed. Under Missouri’s cemetery law, compliance with the endowed care requirements is voluntary. If a cemetery wants to hold itself out to the public as having an endowed care fund, then it must comply with Chapter 214. If the cemetery doesn’t want the hassle of maintaining a trust and filing reports, it can operate as a non-endowed cemetery by making certain disclosures. The vast majority of Missouri’s cemeteries operate as non-endowed cemeteries.

So when Mr. Hynes jerks Burr Oaks’ license that means the cemetery can’t accept preneed funds or endowed care contributions. It doesn’t mean the cemetery has been closed for business. In fact, regulators like Mr. Hynes face a dilemma when the encounter a Burr Oak Cemetery, or a Valley View Cemetery: there are still burials to be made.
 

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