|SB 0688||Revises Preneed Funeral Contract Requirements|
|LR Number:||S2690.01I||Fiscal Note:||2690-01|
|Committee:||Commerce and Environment|
|Last Action:||01/23/96 - Hearing Conducted S Commerce & Environment Committee|
|Effective Date:||August 28, 1996|
SB 688 - 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, reviews and examinations of preneed funeral contract providers and sellers financial records.
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, examination and review were added. Other definition changes include: (1) the definition of funeral merchandise will not include grave lots, grave markers, monuments, tombstones, crypts or mausoleums unless these items are sold in a companion agreement or at prices in excess of the seller's current retail prices; and (2) the definition of a preneed contract is increased to include the current payment of money or other property to the seller, or the assignment of a contract of insurance or annuity or the assignment of the proceeds of a contract of insurance or annuity 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 notarized 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 of Missouri and must be kept for a period of 5 years after fulfillment or cancellation of the contract.
The trustee of a preneed trust shall be located in Missouri and be a state or federally chartered financial institutions authorized to exercise trust powers in Missouri.
Preneed sellers may keep 20% of the funds collected for a preneed contract and must deposit any payment of the remainder of the funds into the preneed trust account within 30 days of receipt. The preneed seller will also be entitled to all interest income from the trust above the annual increase in the consumer price index, dividends, capital gains and capital losses generated by the investment of preneed trust funds.
No funds in a preneed trust may be invested in any company, or in any product or service of any company that owns, in whole or in any part, in excess of 5% of the preneed seller, or which is owned, in whole or in any part, in excess of 5% by the preneed seller.
Preneed sellers must file a notarized annual report that shows the amount of funds held in trust and the amount removed from the trust in the previous year.
The act contains provisions for the right to cancel a preneed contract and waivers of the right to cancel.
If a preneed seller proposes a contract to a person who already has a contract with another preneed seller, the seller making the proposal must provide a side-by-side comparison that describes what is contained in each contract and the difference, if any, in services and merchandise provided under each contract.
If the Attorney General's office determines that there is
probable cause of noncompliance with Chapters 436 or 333, RSMo,
they will notify the Division who will then notify the Board.
The Board may singly or in combination, warn, censure or place
the person named in the complaint on probation on such terms and
conditions as the Board deems reasonable.
RONALD J. LEONE