Preneed: A Pandora's Box of Problems
California funeral directors face a September 13th deadline that could have substantial financial consequences, including the repayment of trust distributions.
A July 1st letter sent by the California’s Cemetery & Funeral Bureau to funeral homes in the California Master Trust outlined the regulator’s rejection of the Association responses regarding the Master Trust audit. An impatient…
The Comptroller’s Office mailed out letters to funeral homes last week advising how to report the first contribution to the Pre-Need Funeral Consumer Protection Fund. The letter tracks the first few paragraphs of the “Senate Bill 1682 Information” page from the Comptroller’s website.
The funeral home letter includes two documents: a Fee Payment…
For more than 20 years, Nebraska preneed sellers have filed an annual report that accounts for the aggregate contributions and distributions from their trust funds. The annual report form also computes the amount of income that must be accrued to the account if the seller elects to withdraw excess income from the trust. In its…
The Springfield Journal-Register recently reported that Illinois’ Cemetery Oversight Task Force made a recommendation to restrict preneed trusts to investing in government-backed securities. While its difficult to actually find that recommendation in the Task Force’s report, it is not a bad idea for the consumers who purchased a non-guaranteed preneed contract. However, that type of restriction would hinder funeral homes that offer guaranteed contracts.
The…
A recent news report titled “Broken Trust” served to fan the emotions of Illinois residents who purchased a preneed contract from the Illinois Funeral Directors Association. The facts involve a 103 year old lady who purchased the contract 16 years ago, and experienced a 32% drop in the contract’s value in one year.
In rejecting the $18 million settlement forced upon IFDA members, an Illinois Circuit Court is telling Merrill Lynch Life Agency to dig deeper into its pocket to compensate funeral homes. As reported by the Springfield Journal-Register, the $18 million represents the revenues the insurance broker received from the sale of key man insurance to…
With the upcoming new year, Illinois smaller funeral homes will begin searching for a corporate trustee for their preneed funds. With the Legislature’s approval of the Governor’s Amendatory Veto of SB1682, funeral directors lose the authority to serve as fiduciary of their own preneed funds.
The old axiom was that it would take three consecutive legislative sessions to get a preneed bill passed. If Missouri and Illinois are indicators of the current preneed reform movement, the charm may be based not on attempts but actual bills passed by the legislature.
The Illinois Comptroller’s proposal for preneed reform, SB1682, is progressing…
Reform in Illinois inched closer to reality with Governor Quinn’s "amendatory veto" of SB1682. If accepted by the Illinois legislature, the reform bill will become law on January 31, 2010.
However, the Governor is seeking a 30 day window between the deadline for the report due from the Funeral Burial Task Force and SB1682’s effective date. It is doubtful much could be done to change SB1682…
Rather than defend the legality of its master trust, the IFDA sought to enforce the gentlemen’s agreement that the association perceived it had with the Comptroller. The 2006 exchange of correspondence reported by the State Journal-Register underscores the risks that death care operators take when they structure arrangements that exceed the parameters of applicable law.…