Insurance News

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September 3, 2009

Sellers of preneed funerals must be licensed under new state law

Jefferson City, Mo. – State officials are reminding consumers, sellers and providers of preneed funeral contracts that a new state law has taken effect requiring a license for the sale of these contracts. The law, which took effect Aug. 28, gives more authority to the Missouri State Board of Embalmers and Funeral Directors and other regulatory agencies over the sales of preneed funeral contracts, as well as better oversight of the financial accounts involved.

A preneed funeral contract allows consumers to plan and pay for their funeral services in advance. Often these contracts are guaranteed, which means funeral services will be provided at no additional cost to the consumer’s family. Some consumers do this to prevent their loved ones and other survivors from being burdened with funeral expenses and planning. Missourians bought more than 17,000 preneed funeral contracts in 2008.

Some changes under the new law:

•Sellers and providers of preneed funerals must now be licensed, and preneed agents must be registered by the State Board of Embalmers and Funeral Directors. Licensing information is available from the board’s Web site, ww.pr.mo.gov/embalmers.asp or by calling 573-751-0813. In the past, sellers simply had to be registered. The change allows stricter criteria for issuing licenses and for discipline of licensees who violate the law.

•All sales staff and counselors who are employed by sellers must pass a test on Missouri preneed laws and register with the state board.

•85 percent of a consumer’s purchase must now go into a trust account. In the past, the requirement was 80 percent. The new law also allows the buyer of a prepaid funeral plan to change funeral homes without penalty.

•The board now has the authority to audit preneed funeral accounts to ensure they are properly funded. In the past, the board could only audit an account after receiving a complaint. By that time, it was often too late.

More information is available on the board’s Web site, www.pr.mo.gov/embalmers.asp or by calling 573-751-0813.

About the Missouri Department of Insurance, Financial Institutions & Professional Registration

The Missouri Department of Insurance, Financial Institutions and Professional Registration (DIFP) is responsible for consumer protection through the regulation of financial industries and professionals. The department's seven divisions work to enforce state regulations both efficiently and effectively while encouraging a competitive environment for industries and professions to ensure consumers have access to quality products.

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