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The Missouri State Board of Embalmer and Funeral Directors met this past December to discuss changes to the Preneed Examination Handbook, and former Board Chairman Don Lakin made a proposal that has merit. The State Board has licensed approximately 315 preneed sellers.  The current preneed examination procedures contemplate an onsite visit to each seller.  Many of those sellers are small funeral homes that sell less than a handful of preneed contracts in a month.  Mr.…
Our next criticism of Missouri’s pending Exam Handbook is its violation of the Four Corners Rule, which requires a document to stand on its own when being interpreted and applied.  Common law precludes parties from going to outside sources when applying the document to different situations.  While the Handbook gives lip service to the Four Corners Rule in Paragraph 13, other sections of the Handbook send examiners to various sections of law, to rules that…
The newest edition of the Missouri Preneed Exam Handbook has some significant problems.  The one we will discuss today is ambiguous instructions regarding the review of preneed contracts.  Paragraph 13 of the Handbook’s scope of financial examination states: 13) Staff shall look at 100% of all active preneed contracts that have been sold since the period covered under the last financial examination and may look at a sampling of other active and fulfilled preneed contracts,…
“Nitpicking” was one of the terms frequently used by Missouri funeral directors when referencing their preneed exam exceptions report.  (Other descriptions are not appropriate for print.)  The initial exam guideline provided no guidance to examiners for prioritizing problems found in preneed contracts and records.  It was common to see exception reports with dozens, even hundreds, of technical ‘violations’.   The original guidelines did not distinguish certain types of preneed contracts, and that led examiners to erroneously…
The Missouri State Board’s proposed exam handbook would have examiners perform more of their review before an onsite visit is scheduled at the funeral home.  By performing a desk top review, the examiner would be better prepared when visiting the funeral home.  This should expedite the examination process.   There would be four stages to the desk top exam that starts with an information and document request. Depending upon the sampling to be used by…
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 staff proposed a record keeping regulation three years ago, but both Board members and the industry objected.   (Missouri Preneed
The Missouri State Board’s proposed exam handbook places a new emphasis on tracking consumer payments to funeral homes.  There are two elements to the Board’s strategy: confirming the consumer’s funds make it to the appropriate funding agent, and that those funds are remitted to that funding agent within the time periods required by Chapter 436.  The State Board’s main challenge will be detecting funeral directors that keep a consumer’s funds and never remit them to…
The Missouri State Board of Embalmers and Funeral Directors introduced a new preneed examination handbook at its October meeting.  (Click the following hyperlink to access the preneed handbook.)  The proposed handbook would change the emphasis of the preneed exams from contract and recordkeeping compliance to tracking consumer funds paid to the funeral home. For most Missouri funeral homes, the preneed examination conducted after the passage of Senate Bill No. 1 in 2009 was their…
These are tough times for cemeteries.  Too many planned on a steady revenues from grave sales, and have not trusted enough funds for future maintenance expenses. Grave sale revenues have been dramatically cut by the public’s acceptance of cremation.  Subsequent to the Great Recession of 2008, many of our funeral home clients reported a significant uptick in their cremation rates.  Families could no longer afford to spend $12,000 for a funeral that included a casket…
The New York Times article on funeral planning blurs the line between pre-paying and pre-funding.   The savings accounts discussed by the article are one method of pre-funding funeral costs.   But the POD savings account is far less secure than final expense trusts or final expense insurance policies.  The concern many consumers have is that the ne’er-do-well nephew will spend the funeral funds if they are discovered before the consumer’s death.  A final expense product, whether…