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
NPS
Allegiant Bank and NPS: Know Your Client
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
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
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
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…
A Cassity Update: Doug’s Request for a Compassionate Release
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
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 Missouri Fund Manager: What was Grandfathered?
There seems to be some confusion in Missouri over the permissible contractual relationships among the preneed seller, the preneed trustee and the independent investment advisor. Prior to the collapse of NPS, and the subsequent amendment of Missouri’s preneed law, Chapter 436 allowed the preneed seller to incorporate provisions in its preneed trust agreement to instruct…
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…