Preneed: A Pandora's Box of Problems
The funeral director’s decision about how to fund his preneed is influenced by the state’s trusting requirement, investment returns, administrative convenience and the volume of preneed business. Essentially, there are three methods of funding preneed: the depository account, the master trust and the insurance policy.
The funeral director’s use of the depository account predates all…
The emergency rule that implements Missouri’s $36 per contract fee becomes ‘official’ on October 4th. Missouri funeral directors question whether the fee is too high, and whether it will contribute to the decline in preneed sales. The analysis required for the emergency rule reports that the fee is expected to generate $612,000 of revenues that will…
Over the past few years, preneed frauds have been measured in terms of hundreds of millions (with the suggestion that the NPS loss will top a billion). And, funeral directors and consumers have been frustrated by the perception that regulators are helpless to stop preneed fraud. Apparently, one local prosecutor from Texas took notice.
When the…
The Missouri State Board of Embalmers and Funeral Directors faces two hurdles to implementing SB1: disagreements over the interpretation of key provisions and informing the industry how the Board will enforce the law. These hurdles have put the Board in to a Catch 22 situation.
SB1 was drafted under the cloud of the NPS crisis.
The September edition of the Mortuary Management ran an excerpt from a Funeral Monitor article about the California Master Trust suffering a deficit.
If the story is accurate about the master trust’s shortage, the author’s speculation about the reasons for the deficit omits a possible factor that has existed for years: the 4% administration fee.
As explained…
One criticism of Missouri’s prior preneed law was that the Attorney General’s office was dependent upon the State Board to refer complaints for legal enforcement. If the State Board didn’t refer a Chapter 436 violation, the AG’s only enforcement alternative was to pursue an action under Missouri’s Merchandising Practices Act (Chapter 407). During the 2008…
The first week under the new preneed law was a confusing one for the Missouri funeral industry. SB1 has many drafting conflicts and ambiguities, and that has give rise to different interpretations from the Attorney General’s Office, the State Board of Embalmers and Funeral Directors, and the death care industry.
The State Board and the…
As its first step in educating the preneed industry about SB1’s requirements, the Missouri State Board of Embalmers and Funeral Directors posted the Top 12 Changes to Missouri’s Pre-Need Law to its website. However, I had trouble getting past No. 2. The explanation about fiduciary reimbursements of sales expense on Pre-SB1 sales sent me back…
Reform in Illinois inched closer to reality with Governor Quinn’s "amendatory veto" of SB1682. If accepted by the Illinois legislature, the reform bill will become law on January 31, 2010.
However, the Governor is seeking a 30 day window between the deadline for the report due from the Funeral Burial Task Force and SB1682’s effective date. It is doubtful much could be done to change SB1682…
The Missouri State Board of Embalmers and Funeral Directors meets August 25th to vote on emergency rules that are intended to keep the preneed industry functioning when SB1 goes into effect on August 28th. While numerous issues have been identified to the State Board as deserving of emergency status, four stand out above the rest:…