Chris Rizo Apr. 11, 2008, 12:24pm
JEFFERSON CITY-A Missouri provider of prepaid burial and funeral services has agreed with regulators to stop doing business in the Show Me State following an investigation by Attorney General Jay Nixon.
National Prearranged Services Inc., under a deal with the Missouri Board of Embalmers and Funeral Directors, has agreed to cease doing business after the attorney general raised questions about how the prepaid funeral company handled its deposit and trust accounts.
The company has not admitted any wrongdoing.
Its agreement with Missouri regulators comes on the heels of similar actions secured against NPS by attorneys general and other officials in six other states including Kentucky, Ohio and Illinois.
St. Louis-based NPS is affiliated with Lincoln Memorial Life Insurance Co. of Austin, Texas. The insurance company sells small-value life insurance policies to back up the pre-need burial contracts that NPS sells.
In a letter Tuesday, the attorney general said deposits for burial contracts sold in December and January allegedly weren't made.
The letter to the state Division of Professional Registration also expressed concern that the NPS trustee, St. Louis-based Bremen Bank & Trust Co., may have failed to manage the trust properly.
Nixon recommended that the Missouri Department of Insurance, Financial Institutions & Professional Registration audit National Prearranged Services Inc.
Missouri state law requires that 80 percent of funds collected from those who buy burial contracts is deposited in trusts established by the contract seller.
The funds are to be invested, but the state found that the deposits were put into monthly renewable term insurance with no value.
NPS reportedly does business with about 50 funeral homes in Missouri and has pre-need funeral contracts covering about 46,000 Missouri residents, according to the Missouri Department of Insurance, Financial Institutions & Professional Registration.
From Legal Newsline: Reach reporter Chris Rizo by e-mail at firstname.lastname@example.org.