One of the weaknesses of Chapter 436, Missouri’s preneed law, is that it provides the State Board few enforcement powers beyond disciplining the preneed seller’s license. There are plenty of examples of preneed sellers obstructing the State Board’s efforts to obtain preneed records. At least one resorted to litigation as a delay tactic. The prospect
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Missouri SB32: A New Audit Direction
With our next few posts we will dive deeper into SB32, the Missouri preneed legislation intended to provide the State Board a new audit direction and some new enforcement tools. Our first issue will be the change in course on preneed audits.
The bill would amend section 436.470 by adding the following new section:
3. …
Setting the Record Straight: Derailing Missouri Preneed Reform
In this post we are breaking a rule that we have followed since the startup of the blog: maintaining the anonymity of a source. In our post Derailing Missouri Preneed Reform we referred to our source as having an irrefutable reputation within the industry. Those who follow this blog instantly understood that the statement had…
Derailing Missouri Preneed Reform: Where will the Buck Stop?
Despite what some may say, the State Board shake up and the termination of its executive director came as a surprise. But the most surprising move by the Division was the termination of Randall Jennings, the preneed examination supervisor. The examination supervisor had no role whatsoever in the funeral home inspection process. Baffled by that…
Is the end of NPS near?
Jo Ann Howard & Associates, P.C., the receiver of National Prearranged Services, recently sent out a notice to funeral home providers that suggests to us that a settlement with PNC Bank may be in the offering. The “Notice to Funeral Homes” advises that funeral homes will have until June 1st to provide documentation…
Allegiant Bank and NPS: Know Your Client
PNC Bank has been hit with $15 million of punitive damages because Allegiant Bank did not know its client.
Before opening a fiduciary account, banks are required to perform due diligence on the trust’s grantor and on the trust’s purposes. Such due diligence is referred to as ‘know your client’ or “KYC”. KYC requirements had…
National Prearranged Services: A Serious Lack of Fiduciary Oversight
National Prearranged Services is back in the news after a trial court issued a new $102 million judgment against PNC Bank (the corporate successor of Allegiant Bank). Allegiant Bank served as NPS’ Missouri preneed trustee for six years beginning in 1998. When PNC Bank agreed to purchase Allegiant in 2004, PNC performed due diligence that…
Sale of NPS Preneed Contract Approved
A Texas court has approved the sale of a majority of the NPS preneed business to a Texas insurance company and its subsidiary. As we reported a few weeks ago, Liberty Bankers Life Insurance and Capitol Life Insurance Company will assume the NPS preneed business written in Missouri and Illinois as of November 1st. …
The New Owner of NPS: Liberty Banker Life
The Special Deputy Receiver over National Prearranged Services recently filed an application to assign a significant portion of the NPS preneed contracts to Liberty Bankers Life Insurance, and a subsidiary, Capitol Life Insurance Company. If approved by the court, the NPS contracts will transfer on November 1st. Preneed contracts sold in Missouri and…
The NPS Appeals Opinion: What does it mean for Preneed Fiduciaries?
In an opinion issued last week, the Eighth Circuit Court of Appeals struck down key NPS trial rulings that resulted in a $491 million jury verdict against PNC Bank (as the successor to Allegiant Bank). The appeals opinion states that the trial court erred when it allowed the NPS receiver to argue tort based claims…