Federal and state regulators can not quite agree on how to define the preneed transaction. Federal regulators tend to view the preneed transaction as a current sale of goods and services (where the delivery is deferred until a future date). In contrast, state regulators are increasingly defining the transaction in terms that defer consummation of the sale until the beneficiary’s death. This is reflected in a bill (SB1682) passed recently by the Illinois Legislature.
Through a deletion to 225 ILCS 45/1b (b), the preneed seller will no longer be allowed to retain a finance charge from the purchaser payments. While not all preneed sellers include a finance charge on their installment sales, some do in order to offset the earnings lost when the purchase is paid over time.