Preneed: A Pandora's Box of Problems
With our next few posts we will dive deeper into SB32, the Missouri preneed legislation intended to provide the State Board a new audit direction and some new enforcement tools. Our first issue will be the change in course on preneed audits.
The bill would amend section 436.470 by adding the following new section:
3. …
It would seem that the Missouri Legislature has grown impatient with the funeral industry’s efforts to regulate preneed. New legislation, Senate Bill No. 32, would establish a two tier approach to preneed oversight. This law would create a threshold whereby the State Board of Embalmers and Funeral Directors would be required to notify the…
Late in 2021, PNC Bank threw in the towel. After years of litigation and two appeals, PNC Bank agreed to a settlement with the NPS special deputy receiver. Last month, our Illinois clients began receiving POC notices from the SDR that a portion of their claims for inflation would be honored. Payment of funeral home…
Despite what some may say, the State Board shake up and the termination of its executive director came as a surprise. But the most surprising move by the Division was the termination of Randall Jennings, the preneed examination supervisor. The examination supervisor had no role whatsoever in the funeral home inspection process. Baffled by that…
On August 30, 2021, the legal saga of National Prearranged Services came to a rather anticlimactic conclusion. In a relatively short decision, the Eighth Circuit Court of Appeals affirmed Judge Richard Webber’s July 2019 judgment that awarded $102,135,393.07 damages against PNC Bank, a successor to the NPS preneed trusts. The final damages award is a…
Doug Cassity has apparently died alone last Sunday night. The St. Louis Dispatch ran a short story on the death of the man responsible for defrauding preneed consumers out of hundreds of millions of dollars. We wonder whether his NPS preneed contract was an orphan or not.
Jo Ann Howard & Associates, P.C., the receiver of National Prearranged Services, recently sent out a notice to funeral home providers that suggests to us that a settlement with PNC Bank may be in the offering. The “Notice to Funeral Homes” advises that funeral homes will have until June 1st to provide documentation…
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…
“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…
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…