Preneed: A Pandora's Box of Problems
The financial fallout from the failures of NPS and IFDA regarding compliance with state and federal laws has accelerated the decision of many funeral directors to switch to the non-guaranteed preneed contract. That non-guaranteed contract represents a fundamental change in the relationship that is established between the consumer, the funeral home and the preneed fiduciary.
The…
The Texas preneed regulator may have left some consumers scratching their head. On September 16th, the Department of Banking issued a press release that a cease and desist order had been issued to prohibit a Lubbock funeral home from selling trust-funded prepaid funeral contracts. But, a Lubbock newspaper reported comments from the Department of Banking…
Several states have passed laws in the past few years mandating greater preneed oversight. But with state budgets in decline after the 2008 market crash, regulators are hard pressed to find a way to pay for consumer protection.
Colorado’s new law simply states that the contract seller shall bear the cost of its examination.
In…
Small town funeral homes often lack the volume of business to warrant a ‘preneed program’. And, if there is no competition, why hassle with the costs of preneed compliance. The short answer is reputation and integrity.
A recent article about an Iowa funeral director suggests the operator may have only handled a hand full of preneed…
Within the past few years, state legislatures have significantly expanded the fiduciary duties of banks and trust companies that service death care trusts. Michigan, Indiana and Tennessee responded to cemetery trust frauds (including the Clayton Smart affair). The trend continued in Missouri and Illinois with laws aimed at funeral trusts (in response to NPS and…
A bank client recently asked that I provide some standard of accountability for administration provided to a master preneed trust. As I struggle to provide the client a concise answer, I can’t help but to think that the issue will also become a crucial concern to consumers and funeral directors alike. As news reports reach consumers about…
It’s always an ugly scene when a party to a fiduciary relationship gets caught with his/her hand in the cookie jar. Unfortunately, this has been happening with alarming frequency in the death care community, and Indiana has had enough. In a relationship that requires mutual cooperation, the death care industry has taken the position that "someone should have…
It must be spring: preneed reform bills are sprouting like crocus.
The direction taken by the Maryland and Tennessee legislatures in proposing protection funds drew recent criticism from the Funeral Consumers Alliance. While consumer advocates have some valid points regarding these legislative efforts, the obstacles facing states are far more complex than what most…