Preneed: A Pandora's Box of Problems
“Allegiant [Bank] violated the industry standard of care by not maintaining consumer-level deposit records, because, as here, where there are multiple beneficiaries of a trust, the trustee must keep records of the individual deposits made for each consumer.”
This finding by the trial court in the NPS civil trial had to come as a shock…
Missouri’s pending preneed exam handbook will establish a new record keeping requirement for the state’s preneed sellers: monthly records of consumer payment receipts and the transmission of those funds to the preneed funding agent. Seller record keeping proposals are not new to the Board. (Missouri Seller Records: The State Board Proposal) The Board’s…
When the State Board approved a new “adequate seller records” rule on April 25th, there wasn’t much discussion of the documents or reports to be maintained for performed and canceled preneed contracts. In a sense, the Board may not need to expand beyond the FTC’s statement of goods and services requirement. If a…
With its January 9th and 10th agenda, the Missouri State Board of Funeral Directors and Embalmers exhibited yet another example of memory loss. Just weeks prior, the State Board voted to have one or more special meetings on seller records and the financial examination process. The motion approved by the Board was to have…
This time last year, the hot topic before the Missouri State Board of Embalmers and Funeral Directors was the staff’s proposed regulation to define what constitutes adequate records of a preneed seller. The proposal was revised more than once during 2016, but it was eventually tabled by the Board before any consensus could be reached. …
Prosecutors and investigators have commented to our office about how difficult it can be to prove preneed fraud. They won’t know whether the consumer has been harmed until the death of the contract beneficiary, and then whether the funeral is provided. In Missouri, prosecuting a bad apple funeral director got much easier as of January…
The final section of the Missouri preneed seller record rule will likely draw criticism from the industry:
The standards set forth in this rule are stated only as minimum standards. Each seller may maintain any records in addition to those set forth in this rule. In addition, if the board determines that it is unable…
The next section of the Missouri preneed records rule provides the funeral home latitude to maintain records in either a hard paper copy or an electronic format, but so long as the records are provided to the State Board in a timely manner:
All records required to be maintained by a seller may be maintained…
Missouri’s preneed seller records proposal would require preneed sellers to retain all communications that relate to their preneed contracts:
Any written (including electronic) communications between the seller and any preneed agent, provider, trustee, investment advisor, insurance company, purchaser and/or beneficiary of the preneed contract and any other person related to preneed contracts and the funding…
We anticipate that the following section of the Missouri record keeping proposal is directed at the situation where consumers assign an existing insurance policy to the funeral home:
All information obtained or possessed by the seller related to any insurance policy used to fund any preneed contract that may include, but not be limited to…