In his final report to the court, the Wisconsin Master Trust receiver proposed a new trust agreement that is intended to provide “transparency, accountability, oversight and prudence”. Similarly, the California Attorney General seeks to provide transparency through express reporting requirements included in the trust agreement proposed to the court presiding over the California Master Trust. The proposed California Master Trust agreement would provide more program information to the state regulator, funeral homes and trustors/contract purchasers. Funeral homes were included in the beneficiaries for transparency because the master trust programs often operated in secrecy to participating funeral homes. Funeral homes participating in the Illinois master trust were not informed of how the trust invested, or that key man insurance was frequently purchased on owners’ lives without their knowledge. With three large state master trust programs having been forced to provide greater transparency, it is curious to see a state master trust bringing litigation claiming that information concerning its members, investments and agreements are proprietary and confidential.
On May 22nd, the Missouri Funeral Trust filed a lawsuit against the State Board of Embalmers and Funeral Directors and Catholic Holy Family Society seeking an injunction to protect various program documents and information as confidential. Catholic Holy Family Society is an insurance company that writes preneed insurance policies, and it hired away from the State Board, an auditor that had handled the examination of the Missouri Funeral Trust program. For 4 years, the Missouri Funeral Trust has been the subject of a preneed financial examination, and the complaint alleges this gave the auditor unfettered access to program information, including strengths and weaknesses, and which funeral homes might be prime targets for a competitor company to ‘steal away’. The lawsuit was disclosed to Association members and industry attendees to the Association convention, with an explanation that the Missouri Funeral Trust has very deep pockets and can pursue litigation against any competitor that solicits MFT board members.
Curiously, what is not alleged in the complaint is that the defendants misrepresented any information communicated to program members. The main message communicated by the lawsuit, and by program representatives, is that the program’s executives should be the sole source of information to the member funeral homes. This rings a little too familiar with what happened in Wisconsin and Illinois.