The Missouri State Board of Embalmers and Funeral Directors will meet December 9th, and their agenda includes a proposed regulation for new preneed recordkeeping requirements. Borrowing perhaps from other states’ preneed audit manuals, the regulation sets out a list of journals, ledgers, documents that a preneed seller would be required to maintain. For an
Compliance
Chasing Preneed’s Bad Apples
By Bill Stalter on
Posted in Associations, Exams/audits
In September of last year, the Columbus Dispatch published a story critical of the Ohio State Board of Funeral Directors and Embalmers. Examining the Board’s efforts to address preneed fraud, the story reported that prosecutions of funeral directors were more the result of consumer complaints than Board inspections. That must have struck a nerve…
The Missouri Funeral Trust and its Catch-22
By Bill Stalter on
A status hearing is scheduled for September 28th in the lawsuit filed by the Missouri Funeral Trust against the State Board of Embalmers and Funeral Directors and Catholic Fraternal Life. The lawsuit is now 4 months removed from the request for a temporary restraining order that, among other relief sought, would stay the financial…
No Relief from the Federal Reserve: the September Announcement
By Bill Stalter on
For an industry that has been dependent on interest income, the past 9 years have been tough on the death care industry. Interest rates started to decline 9 years ago, with the bottom hitting in 2008. Zero interest rates forced death care fiduciaries to diversify into equity investments, but trusts have experienced a sideways market…
Missouri’s Financial Examination Committee: What role?
By Bill Stalter on
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…
Missouri’s Next Round of Preneed Examinations: Drilling Deeper?
By Bill Stalter on
When the Missouri State Board of Embalmers and Funeral Directors meets this week, their staff will be seeking input regarding the scope of the second round of preneed audits. Each preneed seller is to be audited at least once every five years, and the first round of audits was ‘concluded’ this year. Included on…
Trustee Investment Liability: The Preneed Purchaser Wild Card
By Bill Stalter on
Back in March, the NPS Special Deputy Receiver won a judgement of $355 million against PNC Bank (as successor to Allegiant Bank). In defense of Allegiant Bank, PNC argued that Missouri’s Chapter 436 defined the trustee’s duties as owed solely to the preneed seller. That was the intent of the Missouri Funeral Directors Association when…
Missouri Audits: What’s in store for round 2?
By Bill Stalter on
The Missouri State Board of Embalmers and Funeral Directors will meet August 4th and 5th to discuss legislation, regulation drafts and changes to the examination process. The State Board examiners are completing the first audit of each preneed seller, and the scope and procedures for the next round of preneed audits will be discussed. Use…
Preneed Trust Shortages: Investment Management Fees
By Bill Stalter on
One strength of the state association master trust is that it can provide the ‘critical mass’ required for economies of scale to reduce trust management costs. As the state master trust grows in size, the association can better negotiate asset management arrangements. However, the reality has been very different for these programs. The reorganization of…
Preneed Trust Shortages: Deposit Plus Accounting
By Bill Stalter on
During its state convention, the executive director for the Missouri Funeral Director and Embalmers Association stated that their master trust program would have a $3 million dollar surplus if all preneed contract beneficiaries were to die that day. If the Missouri program were being administered pursuant to common trust fund rules, there should not be…