SB 32
Authorizes the Department of Commerce and Insurance to conduct financial examinations regarding preneed funeral contracts under certain circumstances
LR Number:
Last Action:
2/21/2023 - Hearing Conducted S Insurance and Banking Committee
Journal Page:
Effective Date:
August 28, 2023

Current Bill Summary

SB 32 - Currently, the State Board of Embalmers and Funeral Directors ("the Board") is authorized to conduct financial examinations of providers, sellers, and agents of preneed contracts. This act authorizes the Department of Commerce and Insurance to perform financial examinations in instances concerning financial discrepancies of $25,000 or more.

The act requires applicants for a preneed provider license (section 333.315.2(5)) or a preneed seller license (section 333.320.2(9)) to consent to investigations, examinations, or audits of the licensee's books by the Department of Commerce and Insurance, in addition to the existing authority of the Board.

The act requires applicants for a preneed seller license to maintain documents showing the applicant is the grantor of a preneed trust as required by law, rather than directly requiring that they have established the trust. (Section 333.320.2(7)).

When grounds for discipline of a person licensed by the Board include mishandling of preneed funds of $25,000 or more as specified in the act, the act allows the Board to impose a fine of up to $10,000. The Board may also, as part of any settlement agreement or disciplinary order, require the person to pay back the missing funds. (Section 333.330.3).

This act establishes the "Preneed Audit Fund", into which certain reporting fees required by law shall be deposited. The fund shall be used solely by the Board or designee of the Department of Commerce and Insurance to pay for the expenses of conducting preneed audits, examinations, and inspections. When a disciplinary order or settlement includes a finding of mishandling consumer preneed funds of $25,000 or more, the Board or Administrative Hearing Commission may require the person disciplined to pay any expenses of the audit, examination, or inspection, and such payment shall be deposited into the fund. (Section 436.460.5(2)).

Under the act, the Board's financial examination guidelines shall include processes and procedures for determining adequacy of sellers' preneed obligations, compliance of sellers' handling of consumer funds as provided by law, and compliance of trustees' administration of preneed trusts as provided by law. The act specifies certain information sellers must provide for each financial examination. (Section 436.470.3). The Board shall forward to the Department of Commerce and Insurance each preliminary financial examination report where an exception notes a failure to deposit an aggregate of $25,000 or more in consumer funds as required by law, or where unauthorized distributions in an aggregate of $25,000 or more may have been made. The Board shall provide the Department of Commerce and Insurance with monthly updates of progress made by the preneed contract seller to address the examination exceptions and correct funding deficiencies. On the Board's request or in its own discretion, the Department of Commerce and Insurance may designate one of its offices or agencies to assume authority over the financial examination and begin a more extensive audit of the seller. (Section 436.470.5). The act repeals a provision requiring subpoenas under the complaint procedures for preneed contracts to be served in the same manner as those in criminal cases, and specifies that the subpoenas may extend to any financial institution holding preneed funds in a preneed trust, preneed joint account, or any other account holding funds paid for a preneed contract. (Section 436.470.10). Lastly, the act provides that the Office of the Attorney General may initiate judicial proceedings as provided by law if an inspection, investigation, or audit reveals a "potential" violation of the Missouri Preneed Funeral Contract Act. (Section 436.470.14).

This act is similar to SB 1008 (2022).



No Amendments Found.