At its April 25th meeting, the Missouri State Board unwound two controversial staff proposals: mandatory consumer disclosures for preneed contracts and the formation of an insurance funded contract.  With 20 CSR 2120-3.205 , the Board staff sought to require Missouri preneed sellers to provide consumers with a two page list of disclosures.  Those disclosures proved confusing because they applied to all forms of preneed contracts, whereas funeral homes typically use a single form of contract funding.  Many funeral homes also use nonguaranteed preneed contracts which also rendered many of the disclosures inapplicable.

With 20 CSR 2120-3.210 , the Board staff also sought to regulate spend down insurance assignments under Chapter 436.  In prior blog posts we have discussed how the State Board can address the staff’s consumer protection concerns with authorities granted under Chapter 333.  However, the Missouri Legislature’s intent with Senate Bill No. 1 was to regulate preneed transactions where consumer funds were handled by funeral homes prior to a death.

With the Board’s April 25th vote, both regulation proposals were rescinded immediately.   In that neither proposal had been formally promulgated, the Board need not promulgate a new rule to terminate either proposal’s enforcement.

Of the two proposals, the one with more far reaching implications is the formation of an insurance funded contract.  Threatened with discipline, many funeral homes began collecting the $25 state fee on each insurance assignment made for spend down purposes.  The Board staff also created a special annual report section for the reporting of these assignments.   The Board will need to give notice to Missouri sellers regarding the annual report and the handling of the $25 state fee.  If the state fee was collected from consumers, funeral homes will need to refund the fee.