The multi-million dollar failure of a major pre-need funeral plan company is leading to a proposed new law governing funeral homes and the sale of those contracts.
The failure of National Pre-Arranged Services has been big enough to attract FBI scrutiny. NPS and its insurance companies had more than 110-thousand contracts in Missouri and other states, valued at 335-million dollars.
State lawmakers spent last summer looking at Missouri’s law and the ability of the state funeral directors board to regulate that business.
State Senator Delbert Scott of Lowry City has led the effort to write a better law. Debate on it has started in the Senate.
"For those people who want to choose to pre-pay for their funeral expenses, we want to insure that when they die, what they bought will be there to bury them, whether it’s one year from now or thirty years from now," he tells the Senate.
A key issue is how much sellers of those pre-need plans can keep, right off the top, in origination and service fees. Present law says sellers of these plans can keep 20 percent of the money. Scott’s proposal cuts that to fifteen percent.
He knows his bill needs improvement and he expects them to come in the next two or three weeks of debate. And even if he doesn’t get the bill passed this year, he says, the crisis is over.