The Nebraska Department of Insurance released its legislative proposal for revising the preneed law that has been in effect since 1987. Written during a time when interest rates were high, the Nebraska law imposed a CPI accrual but allowed income in excess of that accrual to be distributed to the preneed seller. The law also required an annual report of the trust (as opposed to individual contracts). What evolved was a reporting system that was dependent upon the trustee’s tax accounting. In an era when a trustee invested exclusively in bonds, and held them to maturity, the trust’s tax cost basis would track trust deposits and accrued income fairly closely. But, the Nebraska system doesn’t work so well in an environment that requires investment diversification and the risk of value fluctuations. Nor does the system work for the trust that remained in fixed income investments through the 2008 mortgage crisis. In recent years, fixed income returns have not kept pace with the CPI requirement. The reluctance to diversify turns the seller into a Fed watcher. Any time Mr. Bernanke hints at an increase in the interest rates, the seller’s bond portfolio value lurches lower. Yet, the NE law allows the seller to be paid trust deposits plus accrued CPI on the performance of the preneed contracts. So, the DOI is seeking to introduce market value to the Nebraska preneed industry