HB0435 O'Connor, Patrick et al

C O M M I T T E E

HB 435 -- PRENEED FUNERAL CONTRACTS

SPONSOR: O'Connor

COMMITTEE ACTION: Voted "do pass" by the Committee on Professional Registration and Licensing by a vote of 13 to 0, 1 present.

This bill makes numerous changes in the regulation of preneed funeral contracts.

The bill requires sellers and providers of preneed funeral services to maintain applicable records in Missouri for a minimum of 5 years after performance or cancellation of contracts. The bill directs sellers and providers to submit to compliance reviews and audits conducted by the Division of Professional Registration and stipulates that the division may petition the circuit court if necessary to obtain access to such records. If a review of records indicates noncompliance with preneed funeral laws, the division is required to perform an audit after notifying the seller or provider and the State Board of Embalmers and Funeral Directors.

The bill also directs sellers and providers of preneed funeral services to notify the state board within specified time periods of any changes in ownership or organization and to provide documentation that existing contracts will be honored. The division is directed to review sellers' preneed funeral contracts and trust records at least once every 4 years. The division is permitted to perform audits of such records in response to signed complaints or whenever so directed by the state board.

The bill specifies the form and content of preneed funeral contracts and irrevocable contract cancellation waivers. The bill also details various procedures that sellers must follow in retaining and depositing payments in trusts and redesignating providers of funeral services.

The bill changes the Endowed Care Cemetery Audit Fund to the Endowed Care Cemetery and Preneed Audit Fund and makes these funds available to the division to implement the provisions of the bill. Under current law, $1 of fees charged for certification or copying of vital records is dedicated to the fund. The bill also establishes the Missouri Preneed Fund to support the operations of the state board. The state board is directed to deposit in the Preneed Fund all fees associated with preneed funeral contracts and any funds transferred from the Endowed Care Cemetery and Preneed Audit Fund.

Violations of provisions of the bill related to trusts funds and irrevocable contract cancellation waivers are established as a class D felony and violations of all other provisions as a class C misdemeanor.

FISCAL NOTE: Estimated Net Cost to Missouri Preneed Fund of $4,880 in FY 96, $4,880 in FY 97, & $4,880 in FY 98. Income to Endowed Care Cemetery and Preneed Audit Fund of $241,000 in FY 96, $0 in FY 97, & $100,000 in FY 98.

PROPONENTS: Supporters say that current law contains many ambiguities and is subject to misinterpretation. There are loopholes which allow unscrupulous individuals to take advantage of consumers. This bill will clean up the industry and make it better for the consumer.

Testifying for the bill were Representative O'Connor; and Missouri Funeral Directors Association.

OPPONENTS: There was no opposition voiced to the committee.

Bob Dominique, Research Analyst