With this post we will examine the new “Preneed Audit Fund” that SB32 proposes to create. Missouri funeral homes are already quite familiar with the state contract fee that was authorized in 2009 by Senate Bill No. 1. Per that law, the State Board began charging a fee on each preneed contract sold. That contract fee was created for the sole purpose of funding the State Board’s preneed examination functions. The fee amount was set by regulation and the State Board initially set the fee at $36. There were some who thought that NPS had killed off preneed and sales would crater. But that did not prove to be the case. The contract fee generated substantial revenues for the State Board, and after a few years the Board lowered the fees charged on licenses issued to funeral directors, embalmers and establishments. The contract fees were eventually reduced to $25, with more reductions in license fees. Thirteen years later, the contract fee accounts for most of the State Board’s revenue, but there is very little in preneed protection being provided to the Missouri consumer.
So, SB32 will require the contract fee be deposited to the new “Preneed Audit Fund”, over which the state treasurer controls the purse strings. The Fund can only be used to reimburse the State Board or the Department of Commerce and Insurance for expenses incurred in a preneed audit, examination or inspection. The Fund could not be used for expenses such as establishment inspections or discipline proceedings on licenses other than seller, provider or preneed agent.