In our continuing review of the Missouri Seller Record Keeping proposal, the rule next addresses what a preneed seller must retain with regard to its consumer contracts.  However, the proposal actually contains two sections requiring the retention of contracts and agreements (Section 2.A and Section 2.F). Of the two, Section 2.F is the more detailed:

  1. Copies of any agreements or contracts related to the practice of a preneed seller including, but not limited to, the following:

(1) Preneed contracts;

(2) Trust agreements;

(3) trust administration agreements;

(4) Provider agreements;

(5) Preneed agent agreements,

(6) Insurance agreements,

(7) Insurance assignments;

(8) Insurance beneficiary designations;

(9) Investment advisors; and

(9) Any other contracts or other agreements between purchasers, beneficiaries, providers, sellers, agents, financial institutions, insurance companies, investment advisors and trustees related to preneed contracts or the holding of preneed funds;

The language from this section that concerns funeral homes are the phrases “including, but not limited to,” and “Any other contracts and other agreements…”

Both phrases suggest that the staff wants open ended authority to seek funding source related agreements that they may not now be aware.  But, the last subparagraph is worded so broadly that it would define the compensation arrangements of preneed salesmen, fund managers, and insurance agency brokers as records to be maintained for the preneed examination.

Section 2.A of the proposed rule reads:

  1. For all preneed contracts:

(1)  A copy of the executed preneed contract;

(2) A copy of all terms of the preneed contract;

(3) A copy of any attachments, additions, or documents supplemental to the preneed contract;

(4) Records related to the funding source for the preneed contracts, and

(4) All other records required by law to be maintained.

It is probably understood by preneed sellers that the retention of an executed preneed contract includes all documents supplemental to the agreement, such as the description of goods and services.  But, if such language is needed, it could be added to Section 2.F.1.  That would eliminate the first three subsections of the 2.A.

The last two subsections of 2.A ( both numbered as (4)) are both vague and ambiguous.  Later sections of the rule proposal cover both of those subsections in greater detail.  Accordingly, Section 2.A should be omitted completely and Section 2.F should then be revised to address the two phrases that are causing funeral directors concern.