Death Care Compliance Law

Death Care Compliance Law

Preneed: A Pandora's Box of Problems

William Stalter is the founder of Stalter Legal Services and the Preneed Resource Company. Bill focuses his law practice on preneed and death care compliance, serving banks, funeral homes, crematories, and cemeteries. He has written multiple published articles

Tag Archives: prearranged

The Bernanke Factor: The New Volatility for Death Care Trusts

Posted in Investments, Master Trusts, Preneed
A Missouri preneed auditor recently requested an explanation from a client why certain accounts were underfunded.  The handful of accounts were “underfunded” by varying amounts of a few dollars to twenty dollars.  The common fact with each was an initial deposit or substantial deposit in the month preceding the Federal Chairman’s remarks that sent the … Continue Reading

Master Trusts: Finding the Rails

Posted in Fiduciary, Guaranteed, IFDA, Master Trusts, Missouri - SB1, Non-guaranteed, Preneed, Trust Funded
Both the Memorial Business Journal and the Funeral Service Insider commented last week on the Milwaukee Journal Sentinel’s February 7th article regarding the former executive director of the Wisconsin Funeral Directors Association. Several issues were raised that should be included in future industry debate, and in particular, I would agree with Mr. Isard’s questions whether … Continue Reading

The NPS Recovery Plan: Grounded!

Posted in Legislation, NPS/Lincoln
In our prior post, we commented on the lack of detail provided by the Consumer Funeral Assurance group regarding their NPS recovery plan.  We have obtained a copy of the plan, and redacted from the document correspondence that reflect names and/or contact information of recipient organizations or legislators. What is left includes a summary of … Continue Reading

Wisconsin: borrowing from the NPS playbook

Posted in Funeral, Master Trusts, Preneed
Recent document disclosures are reflecting that several factors contributed to the WFDA’s master trust deficiency (and the appointment of a receiver). Certain of those factors relate to the fees paid to fund managers and the association’s sponsorship charges. Those factors are relevant to other association master trusts, and we will explore them in subsequent posts. … Continue Reading

The Preneed Haves and Have Nots

Posted in Cemeteries, Preneed
It is no secret that the larger funeral home operators have more preneed options than the industry’s mom and pops. The large operators have the volume of business that will attract insurance companies and banks, and their program incentives and discounts. Economies of scale provide the larger operator preneed advantages when going ‘toe to toe’ … Continue Reading

Missouri and Mrs. Smith’s insurance policy: Where to draw the line?

Posted in Insurance Funded, Missouri - SB1, Preneed
Every funeral director has faced the situation where Mrs. Smith comes in with an insurance policy and her funeral plans. Often, Mrs. Smith has gone to trouble of designating the funeral home as the policy beneficiary before having discussed her plans with the director. Often funeral directors file the policy and plan away until Mrs. … Continue Reading

Missouri’s desk audit: the first look will take the longest

Posted in Exams/audits, Funeral, Missouri - SB1, Preneed
As discussed in prior posts, the Missouri preneed audit process begins with a notice to the preneed seller for the production of documents and data. After a review is made of the documents, data and the annual reports filed with the State Board, an on-site examination is scheduled with the seller. Most Missouri preneed sellers … Continue Reading

The Independent Preneed Trustee: In a Perfect World

Posted in Administration, Exams/audits, Master Trusts, Preneed, Recordkeeping
A breakdown in communications between the CFDA and the Cemetery and Funeral Bureau has resulted in the California Attorney General filing a lawsuit that can be appropriately described as vitriolic. The “California lawsuit” could provide some valuable ‘what to avoid” lessons for regulators in other states. In an unusual move, the Bureau went “public” last … Continue Reading

Taxes and the Bounty Hunter

Posted in Preneed, Preneed Tax
When news of the indictment of 6 National Prearranged Service officers was reported last November, many newspapers picked up the AP version that included a quote from the Internal Revenue Service criminal investigator. The fact is that the Federal investigation of NPS involves investigators from the IRS, the FBI and the U.S. Postal Inspection Service. … Continue Reading

Missouri’s Show Me Procedures

Posted in Exams/audits, Missouri - SB1, Preneed
The Missouri State Board of Embalmers and Funeral Directors has released its proposed preneed examination procedures. The release comes just 24 hours before the Board’s October 27th meeting, and so few funeral directors will be prepared to ask questions. The proposal contemplates different procedures for ‘compliant sellers’ and ‘non-compliant sellers’. With most of the industry … Continue Reading

The Preneed Subsidy

Posted in Preneed
While the reasons are open to debate, it is common knowledge within the funeral industry that a small percentage of consumers cancel their preneed contracts. Consequently, some funeral directors tend to view their preneed block of business with a degree of certainty. Performance of the contracts, and recognition of the revenues, seems to be just … Continue Reading

Preneed Salesmen: How high a bar?

Posted in Funeral, Missouri - SB1, Preneed
 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 … Continue Reading

NPS, AIG, WaMu and those preneed funds

Posted in Preneed
During the long and tedious Chapter 436 hearings, some Missouri funeral directors joined consumer advocates in using the NPS failure as reason for recommending that legislators impose 100% trusting on the preneed transaction.  Those funeral directors generally advocated the use of insurance or joint accounts as safer methods of preneed funding.  During regulatory meetings, comments were also made about how … Continue Reading

Would consumers purchase a non-guaranteed contract?

Posted in Preneed, Preplanning, Reform
Regulators and preneed sellers squared off recently over the subject of who owns the preneed trust fund: the funeral home or the consumer. Hearings to reform Missouri’s preneed law hit a wall when the issues of trusting requirements, income accrual and portability was taken up by a review committee comprised of regulators, industry representatives and consumers.   In a debate that … Continue Reading

Missouri Preneed Reform: Act 2

Posted in Legislation, Preneed, Reform
As news of the NPS meltdown began to leak last month, several proposals to reform Missouri’s preneed law were hastily drafted.  Not knowing the extent of NPS’ problems, some reform advocates felt the need to strike while the iron was hot.  Even as the legislative session ended on May 16th, it was not clear whether … Continue Reading

Your Preneed Forecast: Exams, followed by Audits

Posted in Legislation, Preneed, Reform
The Missouri preneed industry faces a long and stormy summer.  The Missouri legislature seems to be listening to regulators’ requests for much needed authorities for examinations, audits and rulemaking.  A draft bill providing emergency powers to the Division of Professional Registration has emerged as legislation that may be signed into law before the current session ends … Continue Reading

NPS: Show me the money!

Posted in NPS/Lincoln, Preneed
On Wednesday, April 30th, the Missouri Department of Insurance fired off the first salvo in the legal proceedings to recover funds from Lincoln Memorial Life Insurance Company. In an effort to prepare those affected by the NPS meltdown, the Missouri State Board of Embalmers and Funeral Directors and the Division of Professional Registration have issued press … Continue Reading

Missouri Preneed Reform: Show Me

Posted in Consumer Advocates, Legislation, Preneed, Reform
With two reform bills (HB 2469 and HB 2594) already introduced into the legislature, and two substitute proposals in the works, Missouri legislators and regulators are committed to fixing a law that allowed NPS to exploit consumers and funeral homes. However, consumers and the death care industry are both having difficulty analyzing the specifics of the various … Continue Reading