Prior to October 31st each year, Missouri preneed sellers must file a renewal/annual report that sets out each preneed contract issued or sold during the reporting period (September 1st through August 31st). We recently had funeral home clients express confusion over when an arrangement with a family constitutes a preneed contract.
Compliance
Missouri Endowed Care Audits: Veering off the Legislature’s Intent
By Bill Stalter on
In our third post on Missouri’s endowed care cemetery audits we look at the request for the cemetery’s legal documents. The current audit notice requests copies of the cemetery’s trust agreement, rules and regulations, contract forms, deed forms, brochures and any other materials making an endowed care representation. In essence, the audit is going to…
Missouri Care Fund Audits: Following the Money
By Bill Stalter on
Posted in Cemeteries, Exams/audits
Our previous post discussed care fund audits and the tracking of a cemetery’s property sales and care fund liability. The next step of the audit process is following the money to the care fund trust (and the back from the trust to the cemetery). For these purposes, the Missouri audit notice requests trust statements from…
Missouri Care Fund Audits: Tracking IR Sales and Trust Deposits
By Bill Stalter on
Missouri is catching up on its auditing of licensed endowed care funds. Within the past couple of months, most of our Missouri endowed cemeteries received the attached notice requesting reports and documents for audit. In prior posts, we have suggested that the Office of Endowed Care Cemeteries (OECC) audit process should be revised. Our next…
NPS’ Trustee and Income Distributions: Who needs Income?
By Bill Stalter on
We had hoped that the Trial Court’s Finding of Facts would shed some light on how a Missouri preneed trust holding life insurance would have income to distribute. Despite being invested primarily in life insurance policies, Allegiant Bank made monthly income distributions to NPS. The Trial Court made several findings on how Allegiant Bank failed…
NPS’ Trial Court: Trustees and Individual Deposit Records
By Bill Stalter on
“Allegiant [Bank] violated the industry standard of care by not maintaining consumer-level deposit records, because, as here, where there are multiple beneficiaries of a trust, the trustee must keep records of the individual deposits made for each consumer.”
This finding by the trial court in the NPS civil trial had to come as a shock…
Allegiant Bank and NPS: Know Your Client
By Bill Stalter on
Posted in Compliance, NPS/Lincoln
PNC Bank has been hit with $15 million of punitive damages because Allegiant Bank did not know its client.
Before opening a fiduciary account, banks are required to perform due diligence on the trust’s grantor and on the trust’s purposes. Such due diligence is referred to as ‘know your client’ or “KYC”. KYC requirements had…
National Prearranged Services: A Serious Lack of Fiduciary Oversight
By Bill Stalter on
National Prearranged Services is back in the news after a trial court issued a new $102 million judgment against PNC Bank (the corporate successor of Allegiant Bank). Allegiant Bank served as NPS’ Missouri preneed trustee for six years beginning in 1998. When PNC Bank agreed to purchase Allegiant in 2004, PNC performed due diligence that…
Missouri’s Phase 2.5 of Preneed Exams: Section 436.425 and Insurance Funded Contracts
By Bill Stalter on
Posted in Exams/audits, Missouri - SB1
In our last post we discussed the need for the Missouri State Board to provide guidance to their financial examiners regarding Section 436.425 and insurance funded contract forms. In this post we will discuss Section 436.425 and trust or joint account funded contracts.
Subparagraph 9 has created confusion for examiners and sellers. That section states…
Missouri’s Phase 2.5 of Preneed Exams: Section 436.425 and Insurance Funded Contracts
By Bill Stalter on
At its April meeting, the Missouri State Board of Embalmers and Funeral Directors discussed the formation of a “Phase 3 Committee” that would provide input for the revision of the Board financial examination handbook. The Board staff is about half way through the second round of preneed examinations (“Phase 2”), and the Board wants to…