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/Lincoln
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…
Sale of NPS Preneed Contract Approved
By Bill Stalter on
Posted in NPS/Lincoln
A Texas court has approved the sale of a majority of the NPS preneed business to a Texas insurance company and its subsidiary. As we reported a few weeks ago, Liberty Bankers Life Insurance and Capitol Life Insurance Company will assume the NPS preneed business written in Missouri and Illinois as of November 1st. …
The New Owner of NPS: Liberty Banker Life
By Bill Stalter on
Posted in NPS/Lincoln
The Special Deputy Receiver over National Prearranged Services recently filed an application to assign a significant portion of the NPS preneed contracts to Liberty Bankers Life Insurance, and a subsidiary, Capitol Life Insurance Company. If approved by the court, the NPS contracts will transfer on November 1st. Preneed contracts sold in Missouri and…
The NPS Appeals Opinion: What does it mean for Preneed Fiduciaries?
By Bill Stalter on
Posted in Missouri - SB1, NPS/Lincoln
In an opinion issued last week, the Eighth Circuit Court of Appeals struck down key NPS trial rulings that resulted in a $491 million jury verdict against PNC Bank (as the successor to Allegiant Bank). The appeals opinion states that the trial court erred when it allowed the NPS receiver to argue tort based claims…
A Cassity Update: Doug’s Request for a Compassionate Release
By Bill Stalter on
Posted in NPS/Lincoln, Uncategorized
Prison life has been hard on Doug Cassity. The de facto executive officer of National Prearranged Services was sentenced to 10 years in Federal prison for his role in the preneed fraud that involved hundreds of millions of consumer funds. With about 6 years remaining on his sentence, Mr. Cassity has requested a release from…
Missouri HB 1062: A Super Trust for the NPS Recovery
By Bill Stalter on
Posted in Legislation, NPS/Lincoln
It has been almost 2 years to the date when a $391 million dollar judgment was entered against PNC Bank, as the successor to Allegiant Bank. Allegiant Bank was one of the last trustees to administer National Prearranged Services’ preneed trusts in Missouri. PNC Bank appealed that judgment, and a decision is expected any day…
The High Cost of Litigation: Copy Charges
By Bill Stalter on
Posted in NPS/Lincoln
The Special Deputy Receiver for National Prearranged Services recently filed a Bill of Costs with the Federal trial court. The Bill of Costs seeks to recover copy charges of more than $500,000 from a former NPS trustee. Those costs do not include attorneys’ fees. Litigation can be very costly.
Missouri’s preneed regulators are keenly aware…