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.
national prearranged services
The New Owner of NPS: Liberty Banker Life
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?
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…
Missouri Preneed Seller Records: Insurance Premium Payments
The next section of Missouri record keeping proposal addresses funeral homes that handle insurance premium payments. For funeral homes that rely upon insurance funding for their preneed program, the initial payment is typically handled by the funeral director or preneed agent, and then subsequent premium payments are made directly to the insurance company. However, some…
The High Cost of Litigation: Copy Charges
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…
NPS’ Legacy of Damages: No One Knows How Deep the Waters Were
When NPS first collapsed, the estimate of the company’s liabilities to funeral homes was reported to have been as much as a billion dollars. When the SDR finally brought the case to trial, the damages awarded by the jury were less than half of the original estimate. While this author believes the actual damages are…
NPS Trustees: Standard of Care for Investments
Now that a judgment has been rendered against Allegiant Bank, the NPS litigation will move on to the appeal stage where the focus will be on R.S.Mo. Section 436.031. The NPS trustees universally argued that this provision of the Missouri preneed statute relieved them of all responsibility and liability for investment supervision. As set out…
NPS Trustees: Standard of Care for Preneed Administration
Final arguments were heard in the NPS civil trial this past Friday. With the SDR having presented evidence through the prior Friday, the defendant trustees presented their case in less than a week. This may reflect that the NPS trustees had viewed their duties as having been defined by Chapter 436 as relatively low. As…
NPS Trustees: Pre-acceptance Due Diligence
The Office of the Comptroller of the Currency (the OCC) supervises the fiduciary activities of national chartered banks, and in February, updated the guidelines used by its examiners. The “Personal Fiduciary Activities” booklet includes a section on pre-acceptance due diligence that fiduciaries should conduct before agreeing to serve as trustee for an account. …
Finding Fault with Chapter 436: The NPS Civil Trial
The NPS civil trial has completed its third week, and jurors probably face another four weeks of witness testimony. First from the NPS receiver, and then from the defendant trustees, the jurors are hearing two very contrasting theories of what fiduciary duties were owed by the NPS trustees. Up until a few weeks before the…