When the Missouri State Board of Embalmers and Funeral Directors meet this week, the role of the Board’s Financial Examination Committee will be discussed. As established, the Financial Examination Committee was intended to expedite the exam process. The initial Committee consisted of the Board’s public member and a former industry member who had previously acknowledged having limited experience with the different methods of funding preneed transactions. That Committee makeup has resulted in some sellers encountering a prolonged review process that involved multiple exchanges with the Committee and the Board’s staff. Our personal experience was that the Financial Examination committee would reiterate examiner conclusions without articulating the Board’s position and authority with regard to exceptions disputed by the seller. Among the proposed regulations to be discussed by the Board is one that would revise the Financial Examination Committee. We do not think the changes to the Committee go far enough.
When the legislature sought input in 2008 to re-write Missouri’s preneed law, there was discussion concerning the transfer of preneed supervision to the Missouri’s bank regulator. We supported the Board’s continued supervision of preneed transactions because of the complexity of the transaction. An industry board would have far greater experience with the three methods of funding. However, that intent is being circumvented with seller disputes are retained by the Committee rather than being referred to the full Board for consideration.
The Committee does serve an important role in reducing the Board’s workload. However, the Committee’s interpretation of SB1 cannot be substituted for that of the full Board. If a seller disputes the interpretation of a statute as applied by the examiner, and the Committee, then the issue should be referred to the Board. The Board should determine if the seller need to be summoned to a meeting to explain the issue. The referral of the issue should be accompanied with notice to the seller with an explanation of the Committee’s position and legal authority. Accordingly, we would revise the proposed regulation pursuant to the attached.