SB 0570 Revises Preneed Funeral Contract Requirements
LR Number:S2108.01I Fiscal Note:2108-01
Committee:Commerce and Environment
Last Action:01/23/96 - Hearing Conducted S Commerce & Environment Committee
Effective Date:August 28, 1996
Full Bill Text | All Actions | Senate Home Page | List of 1996 Senate Bills
Current Bill Summary

SB 570 - This act makes numerous changes regarding the sale of preneed funeral contracts.

The Endowed Care Cemetery Fund is renamed the Endowed Care Cemetery and Preneed Audit Fund. The $1 fee for the issuance of a certified copy of a vital record will remain the same. However, a portion of the money received into the fund will be used to conduct audits and reviews of preneed funeral contract providers' and sellers' financial records.

Additional language is added to the definitions section to distinguish the types of financial reviews of providers and sellers of preneed contracts which may be requested by the Missouri State Board of Embalmers and Funeral Directors. The definitions of audit and review were added. Other definition changes include: (1) the definition of funeral merchandise will not include grave lots, grave markers, monuments, tombstones, crypts, niches or mausoleums unless these items are sold by a companion agreement or at prices in excess of the seller's current retail market; (2) the definition of a preneed contract is expanded to include the current payment of money or other property to the seller, or the assignment of a contract or annuity or the assignment of the proceeds of an insurance contract or annuity as consideration to the seller.

Providers and sellers of preneed contracts must notify the Board at least 60 days prior to selling, transferring or disposing of a majority of their business assets. Providers and sellers who are selling their businesses must file a certified statement that the trust accounts and joint accounts are fully funded.

The books and records, or a copy of such books and records of both providers and sellers of preneed contracts pertaining to such contracts must be maintained within the State and must be kept for a period of 5 years after fulfillment or cancellation of the contract.

Preneed sellers may keep 20% of the funds collected for a preneed contract and must deposit at least 80% of the remainder of the funds into the preneed trust account within 60 days. The portion of the purchaser's payments which are applied to any finance charges, credit life premiums, the annual reporting fee required or any other fee shall not be subject to the trust requirements.

The act contains provisions for the right to cancel preneed contracts and waivers of the right to cancel.

A complaint received by the Board must be in writing and signed by an individual with personal knowledge of the facts contained in the complaint before the complaint may be investigated. The Division shall investigate each complaint forwarded by the state board using staff who are not connected with the State Board of Embalmers and Funeral Directors.