Preneed: A Pandora's Box of Problems
It is encouraging when funeral directors and consumer advocates engage in meaningful debate about the future of Missouri’s preneed industry. And, there seems to be some consensus that the non-guaranteed contract should have a greater presence in the state.
In the third of six scheduled meetings, industry and consumers were faced with those prickly issues of the trusting…
Here is a twist on the “Another theft from a death care trust”: this one does not involve a cemetery operator or a funeral director. Last week, an Indiana grand jury indicted a banker, an investment advisor and an attorney. What may sound like the beginning of a joke that most funeral directors and cemeterians can relate…
What happens when the family opts for a cremation at the time of need when the preneed contract provides for a traditional funeral? If the preneed contract was purchased in a spend down situation, the funeral director and the family may be caught in a Catch -22. Many states’ laws preclude the refund of the funds to the family.
Missouri law…
Regulators and preneed sellers squared off recently over the subject of who owns the preneed trust fund: the funeral home or the consumer. Hearings to reform Missouri’s preneed law hit a wall when the issues of trusting requirements, income accrual and portability was taken up by a review committee comprised of regulators, industry representatives and consumers.
In a debate…
It was once fairly common for a funeral director to take a preneed purchaser’s funds and establish a joint account at a local bank. Missouri’s preneed law contemplates the transaction and requires that the funeral home and the purchaser have joint control over the account. Prior to 9/11, banks would freely provide account forms, allowing the…
So why is it so tough to provide preneed portability? Because the transaction has been defined by state law as a contract between a consumer and a death care company, and federal regulators tend to agree. When the issue has arisen in the context of federal preemption, the interests of the state regulator have prevailed…
Before the guaranteed preneed contract, funeral directors accepted pre-payment on funeral arrangements as an accommodation to their families. Funds were typically placed in a joint account or POD account at the local bank. As this practice became more common, “preneed’ laws were passed to establish requirements regarding the deposit and withdraw of funds. These laws were fairly simple…
Although it may not be apparent from the press release or the final Decision And Order, the FTC proceeding against the Missouri State Board of Embalmers and Funeral Directors has restraint of trade implications for future efforts to regulate the preneed transaction.
The focus of the FTC inquiry was on the State Board’s lawsuit…
A year ago, the Dayton JournalNews ran a series of articles about the regulation of the death care industry in Ohio. The reporting was comprehensive, with articles about preneed. Earlier this year, legislation was introduced in Ohio to further restrict who could sell preneed. However, the legislation does not address the trusting issues that rankle consumer advocates. …
The class action lawsuit brought against the NPS affiliates on Friday, June 20th reflects the despair that some funeral directors are experiencing over the situation. Although litigation to recover assets from the Cassity Empire was inevitable, this lawsuit has flaws that need to be corrected through an organized effort brought by the states’ regulators.
Funeral…