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NPS Preneed Scandal UPDATED 7-5-2013

 

UPDATE 7-5-2013

NPS Executives Plead Guilty In $600 Million Ponzi Scheme

Read the full article at Riverfront Times

 

UPDATE 6-2013—Jim Cassity, Brent Cassity, and others to go on trial for NPS Preneed Ponzi Scheme

The St. Louis Post-Dispatch reports:

One of six people accused of bilking customers out of as much as $600 million in a pre-arranged funeral scam admitted her role on Monday, as the rest of the defendants prepare to go to trial.

Sharon Nekol Province, 69, of Ballwin, pleaded guilty in federal court here to six counts of the 50-count indictment.

….

They include James Douglas Cassity, of Clayton, who bought the company in 1979; his son, Brent Cassity, also of Clayton, who helped run the companies; Randall K. Sutton, of Chesterfield; Howard A. Wittner, of Chesterfield; and David R. Wulf, of St. Louis County.

They face additional charges of embezzlement, money laundering and conspiracy, all allegedly committed through a lengthy series of money transfers. The network of trusts and businesses named in the indictment include National Prearranged Services, Lincoln Memorial Life Insurance Co., Memorial Services Life Insurance Co. and Forever Enterprises, former owner of funeral homes in the St. Louis area.

 

UPDDATE 7/16/2010Click here for an update on the NPS court battle.

UPDATE 6/20/8 – NPS Scandal now involves 19 states. The following article from the Kansas City Star’s Rick Alm is the best roundup of the NPS meltdown and what it means for consumers. Special thanks to the KC Star for permission to reprint the article.

 

Seller of prepaid funeral plans experiences financial meltdown

By RICK ALM
The Kansas City Star

Back in 1992, Missouri regulators started asking tough financial questions about National Prearranged Services Inc., a St. Louis seller of prepaid funeral plans.

But they quit asking in 2000 after forcing the company in court to tighten its financial practices.

Now, the company is in receivership, its financial reserves apparently short of covering the costs of the funeral packages it has sold. The financial meltdown has put hundreds of funeral homes in at least 19 states at risk to be dragged down with it.

Many in Missouri’s funeral industry are asking how state officials let the company run into financial problems again.

One is Marty Meyers, who bought and renamed Meyers Funeral Chapel in Blue Springs in January last year. The sale included around 700 National Prearranged contracts promising to deliver funeral services that he estimates will cost $4.6 million.

Meyers has to honor those contracts when the time comes. One funeral Meyers provided in May was contracted for in 1982 for around $2,500, but it looks as if the contract’s face value of $2,500 is all he will get for services that in 2008 cost nearly $10,000.

Meyers said most funeral homes can’t sustain losses like that for long, and he figures he is on the hook for a couple of National Prearranged funerals every month for years to come.

“That’s the difference in making it and not making it,” he said. “We’re going to honor contracts as long as we are financially able.”

Jack Spooner, a St. Louis lawyer for the family that owns the company, defends National Prearranged and its practices. He said money was spent properly and insists the company never missed paying for a funeral — until Texas regulators seized the company this spring and halted new sales activity.

Texas regulators started asking questions last year after detecting an unusually high number of questionable insurance policy transactions involving National Prearranged and its sister firms, Lincoln Memorial Life Insurance Co. and Memorial Service Life Insurance Co., which are based in Austin.

One question led to another, and the meltdown was underway.

“As discussions went on they discovered more and more issues,” said Margaret Jonon, financial counsel for the Texas Department of Insurance.

The Texas agency placed all three companies under “confidential supervision” in October and then seized control and appointed a receiver to operate them in April. The agency declared the firms were “inextricably intertwined” and so troubled that their continued operation would be “hazardous to the public.”

In light of National Prearranged’s legal problems with Missouri regulators throughout the ’90s, “I just don’t understand why someone was not watching them,” said Duke Radovich, chief executive of the Kansas City-based Charter Funerals group, which did not do business with National Prearranged.

Missouri officials are pointing fingers at one another, and the dispute has all the markings of a new battle in the longstanding political war between Republican Gov. Matt Blunt and Democratic Attorney General Jay Nixon.

Nixon spokesman Scott Holste said the attorney general’s obligation ended in 2000 when court action got the company to clean up its finances. Absent further complaints against National Prearranged, he said, it was up to state regulators overseen by the governor to keep tabs on such companies.

But routine state audits of prepaid funeral companies and customers’ contracts apparently are rare.

Radovich, for instance, said the state hadn’t audited his Charter Funerals group in more than 10 years.

In the opposite corner the Missouri Department of Insurance, Financial Institutions & Professional Registration, with input from Blunt’s office, recently appointed Platte City attorney Miller Leonard as special counsel to investigate “events that led to the current hazardous financial condition” of National Prearranged.

That inquiry appears aimed in part at Nixon’s office.

“We need to come to an understanding how a bad situation turned into a much more critical situation,” said Emily Kampeter, a spokeswoman for the state agency, which oversees both the insurance and funeral industries.

The latest development in the dispute came Friday when Nixon’s office announced it was seeking the Insurance Department’s permission to bring legal action on its behalf “against insurance, banking entities and others involved” with National Prearranged.

A spokesman for Nixon would not comment on the request, outline any specific allegations or identify any potential targets except a bank in St. Louis that did business with National Prearranged.

A spokesman Friday said state insurance director Linda Bohrer had no comment on Nixon’s request.

What’s clear is that no Missouri agency took action against the troubled firm until April — after Texas and some other states had already taken legal steps to protect their residents’ investments in prepaid funeral plans.

Now the matter is entangled in multi-state regulatory proceedings, and no one is speculating what might happen next — or how much money might be lost.

“There’s a lot to sort out,” Jonon said. “We’re not able to talk about specific numbers. We are sorting it out as quickly as possible, but it’s going to take a while.”

The Missouri State Board of Embalmers and Funeral Directors said National Prearranged has at least 46,000 customers in Missouri with contracts for future funerals valued in excess of $104 million.

Missouri is thought to be National Prearranged’s highest sales state, followed by Texas, where authorities estimate more than 39,000 contracts valued at $159 million are in force.

With privately held National Prearranged and its two insurance sisters now in the hands of Texas’ receivers, the company’s owners have been shoved to the sidelines. They could not be reached for comment.

“They’re not really in a position that would allow for” interviews or public statements, said Spooner, their St. Louis lawyer. “We essentially gave them (Texas regulators) the keys to the car, and we’re cooperating.”

The Missouri embalmers board said audits of company books are expected to discover consumer trust funds “substantially and significantly” underfunded and probably unable to reimburse consumers’ prepaid funerals.

Texas authorities recently issued a warning to funeral home directors that present-value reimbursement is probably not in the cards. The first round of payments it recently made as receivers, including at least one to Meyers in Blue Springs, bear that out.

State insurance regulators say industry safety net groups like the Missouri Insurance Guaranty Associations could step in and bail out Missourians’ funeral contracts underwritten by the Texas insurance firms. Counterparts in other states could do the same for their residents. But to what level is unclear since each state’s guarantee fund has its own rules and monetary limits.

Where’s the money?

National Prearranged was founded in 1979 by James Douglas Cassity, a disbarred Springfield, Mo., attorney who in the early 1980s served a six-month stretch in federal prison for fraud in an unrelated tax shelter scheme. His role in National Prearranged and myriad other Cassity family interests is unclear.

His name rarely appears in connection with family business, but Jonon noted he has engaged in recent talks with Texas insurance authorities.

“We were kind of surprised,” she said.

On paper, a Cassity family trust and family members, including sons Brent and Tyler, appear to control or influence a consortium of insurance companies, funeral homes and cemeteries.

According to court filings and other records, those entities appear to include Mount Washington Forever Funeral Home and Cemetery in Independence, Forever Enterprises Inc., Forever Memorial Inc., Forever Network Inc., Forever Illinois Inc., Forever Georgia Inc., Forever Pre-need Insurance Agency Inc., National Heritage Enterprises Inc., Heritage Research Inc., Lincoln Services Inc., National Cemetery Management Co., National Cemetery Merchandise Inc. and the RBT Trust II.

The Cassitys don’t return calls these days, and company lawyers such as Spooner aren’t saying much.

The big question: Where’s the money?

“They never failed to pay for a funeral,” Spooner said when the scandal first broke. “When you trace that money, you’re going to see that money was used strictly for business purposes and to pay premiums on policies. You’re not going to find them buying jets, boats and throwing $5 million parties.”

The crisis spun out of the complex financial relationships that underpin the pre-need industry, which Nixon a few years ago estimated had grown to a $1.6 billion enterprise in Missouri alone.

Basically, it works like this: Funeral homes sign advance contracts with individual customers. In return for money up front, the funeral home promises a certain package of funeral services when the person dies.

National Prearranged underwrote each of those contracts, agreeing to share some fees with the funeral homes and eventually reimburse its contracted funeral expenses.

National Prearranged financed those obligations with the proceeds of life insurance policies it bought and held on each prepaid customer, cashing each policy in when the customer died.

Missouri law requires at least 80 percent of the value of each contract to be held in trust. Industry critics like the National Funeral Consumers Alliance say that amount is woefully inadequate and note the minimum in many states is much higher. Texas, for instance, requires 90 percent. New York demands 100 percent.

In Missouri, prepaid companies such as National Prearranged are permitted by law to invest trust funds in prudent, interest-bearing financial instruments, such as whole life insurance policies, which increase in value over time to cover 100 percent of each contract’s face value, plus keep up with inflation.

Authorities now allege National Prearranged bled those whole life policies of their cash value and let them lapse, replacing at least some with less-valuable term life insurance policies that paid no interest.

When Texas authorities last fall discovered unusually large numbers of lapsed policies they started asking questions.

So did Alabama-based Hannover Life Reassurance Co. of America, a National Prearranged affiliate’s re-insurer that alleged in a pending lawsuit a racketeering conspiracy that defrauded Hannover of at least $15 million through the practice of converting the whole-life policies to term insurance.

Hannover alleged National Prearranged and others acted to “churn” the insurance policies from whole life to term while bleeding the policies of cash that ultimately was paid to the defendants for “high commissions and marketing fees” while denying Hannover its fair profits.

Spooner said the company denied those allegations and was fighting the legal action in U.S. District Court in St. Louis.

Missed opportunities

Missouri authorities have been asking questions about National Prearranged since at least 1992 when the attorney general sued the company over other trust funding issues.

That court action stretched into May of 2000 and involved years of court-ordered monitoring of its books.

Monitoring ended in 2000 when proper financing and insurance was in place to cover consumer contracts then on the books.

No requirements were put in place for future monitoring.

Another missed opportunity unfolded in 2005 when Nixon launched a much-ballyhooed “Operation Grave Concerns” crackdown on the prepaid funeral industry.

That initiative put a handful of Missouri funeral home operators and pre-need sellers behind bars for financial shenanigans that appear similar to those now engulfing National Prearranged.

National Prearranged got a glance from Nixon at the time, but only for failing to oversee a Salem, Mo., funeral home operator who was convicted of fraud in the misuse of payments from her customers with National Prearranged deals.

National Prearranged paid the state $10,000 in an out-of-court settlement with Nixon’s office and agreed to tighten its recordkeeping oversight of funeral directors.

But no one tightened oversight of National Prearranged, and three years later its financial house was tumbling down.

“Somebody needs to go to jail,” said Meyers, the Blue Springs funeral director.

“I’ll be damned if the Cassity family is going eat the pie and leave us the crumbs.”


Where to call
Anyone with questions about National Prearranged Services contracts can call the Missouri State Board of Embalmers and Funeral Directors at its NPS hotline at 1-866-296-8801 or send e-mail to pr.embalm@pr.mo.gov.

Changing horses
At least two people have played two different roles in the 16-year history of controversy.

•Douglas M. Ommen for a time as an assistant attorney general led the state’s legal action against National Prearranged that stretched from 1992 into 2000. Until May 30 he was director of the Missouri Department of Insurance, Financial Institutions & Professional Registration, which regulates the prepaid funeral industry.

Earlier this year Ommen was named by Gov. Matt Blunt to a quasi-judicial post at the Missouri Administrative Hearing Commission. He started that job June 2.

•Randall J. Singer, from 1993 until early 2001, was director of Missouri’s Division of Professional Registration, which also had a role in regulating the industry through the Missouri State Board of Embalmers and Funeral Directors.

When Texas and other states began piling on with legal actions earlier this year, one target was the same Randall J. Singer, who surfaced as president of National Prearranged’s sister company Lincoln Memorial Life Insurance.

Ommen has declined interview requests. Singer could not be reached.


Political donations
Before its current troubles, National Prearranged was one of the national funeral industry’s largest political donors. The National Institute on Money in Politics recently traced $108,827 in contributions linked to National Prearranged to political candidates between 1999 and 2006, ranking it 10th in the nation among funeral industry givers.

Much of its cash giving went to Missouri politicians, including Attorney General Jay Nixon and Gov. Matt Blunt.

To reach Rick Alm, call 816-234-4785 or send e-mail to ralm@kcstar.com. | Rick Alm, ralm@kcstar.com | Rick Alm, ralm@kcstar.com

 


 

5/21/08 – TEXAS TAKES CONTROL OF NPS; MISSOURI FORMS PRENEED LEGISLATIVE COMMITTEE

The Texas Department of Insurance has put National Prearranged Services in receivership. The St. Louis Post-Dispatch reports the prepaid funeral company – accused of misusing millions of dollars of consumers’ prepaid funeral money – has been ordered by a Texas court to stop transacting business. The state appointed Donna J. Garrett as the receiver, and the Post-Dispatch states “Texas was concerned that another party might file a lawsuit or take action that could hamper operations at NPS [and its insurance companies, Lincoln Memorial Life Insurance in Missouri and Texas]. . “

The article says Donna Garrett will spend two to three months sorting out NPS’ finances and trying to determine if there’s enough money to pay funeral directors who sold their customers NPS policies. Funeral directors were expecting that growth on the policies would cover their costs when consumers died and actually needed their funerals, but it looks unlikely funeral homes will get anything more than the face value of the policies, if that. What does this mean for consumers? If a funeral home promised in a contract that they’d guarantee the price of your funeral, they’re obligated to honor that. Experience shows, however, that some funeral homes will try to wiggle out of their responsibilities to consumers by charging extra. Be sure to read your contract carefully, and do not let a funeral home take financial advantage.

Meanwhile in Missouri, the Legislature has formed a Joint Committee on Preneed Funeral Contracts to study the effect of the preneed funeral industry on consumers and report on their findings by January 31, 2009. The bill number creating the committee is SB 788. Thankfully, the poorly crafted “reform” bills in the MO legislature died (scroll down for our analysis). Let’s hope the members recognize how terribly the current laws treat consumers so lawmakers can write clear, meaningful legislation in the next session. It’s high time for Missouri to stop letting preneed sellers pocket 20 percent of a customer’s money upfront, and then skim the interest every year off the account.

 

Update 5/3/08 – The next time a funeral home tells you it’s a great idea to “guarantee today’s prices” by prepaying your funeral, pull out this article. Funeral Consumers Alliance has long warned against prepaying for your funeral, but even we’re surprised at how widespread the scams and stolen consumer money have become in the preneed industry. The latest preneed company teetering on the brink — along with hundreds of millions of dollars consumers have prepaid for “peace of mind” — is National Prearranged Services.

NPS and its affiliated life insurance company, Lincoln Memorial Life Insurance, are under investigation by regulators in at least 10 states. Alleging the companies have been draining money out of consumers’ prepaid insurance contracts, regulators in Texas, Missouri, Kentucky, Iowa, Ohio, have told the company to stop selling policies while officials examine their books.

It’s not clear how many consumers are affected, but according to the Kansas City Star, at least 46,000 Missouri residents have bought NPS policies. The Texas departments of banking and insurance says at least 39,000 Texans have bought them too.

So what has NPS been up to? According to an article in the Kansas City Star, a pyramid scheme:

“The allegations suggest a pyramid scheme has been in place for at least eight years by the insurer and National Prearranged Services of St. Louis that used payments from new customers to pay off existing ‘pre-need’ funeral customers’ guaranteed burial plans.”

The Missouri Board of Funeral Directors and Embalmers’ Web site says this:

“. . . NPS may have shortages in their preneed trust accounts. Specifically, the Board has reason to believe that the trust accounts contain a substantially and significantly lower amount than the 80 percent of preneed funds [paid by consumers] that are statutorily required to be in trust . . .The trust may also have far less than the amount of preneed funds that were transferred to the trust by other preneed sellers/funeral establishments through ‘rollovers.’ Frankly, serious questions have been raised as to whether NPS will have sufficient funds to continue to pay its obligations on preneed claims.”

According to the Kansas City Star, Hannover Life Reassurance Company sued NPS last year, claiming NPS converted whole life insurance policies into less-valuable term life insurance, then took the extra money to pay for “high commissions and marketing fees.” Hannover was apparently NPS’s “reinsurance company,” which means Hannover provided insured NPS against NPS’ own losses.

The Ft. Worth Star Telegram Watchdog columnist Dave Lieber described it this way:

“Here’s what appears to have happened: NPS used money it made from funeral contracts to buy whole life insurance policies, but eventually the company decided to convert these whole life policies into term life policies. This gave the company money up-front because it could borrow money based on the policy. But eventually more money was required to cover the cost of ballooning payments for the term life policies.”

 

Funeral Directors Will Probably Take a Hit: Don’t Let Them Take it Out of You!

Funeral homes sold NPS policies to customers, depending on policy growth to cover the rising costs of providing funerals to the customer. But it looks like NPS policies probably won’t pay out more than their face value at the time of death, if that. Some funeral homes may try to get families to pay more for the funeral at the time of death so the funeral home doesn’t have to take the hit. Don’t let them. If your family member signed a contract for a price-guaranteed funeral, the funeral home is obligated to provide that funeral without charging you more. Be sure to read your contract carefully and know your rights.

What Should You Do?

It’s impossible to say how much value your prepaid policy with NPS has, or how much it will have at the time of your death. We can’t tell you whether to continue paying on your policy, or try to cash it out and get what you can now. Some state regulators advise consumers to keep paying policy premiums, others say nothing. Since state regulators are taking over the company and lawsuits against it are pending, we have no idea yet what your best options are. If you’ve got an NPS policy, you should contact the regulators in your state for advice. Be warned, though: many state agencies are giving out only tentative information and may not have much practical advice for you yet. Below is a list of some of the state regulators in charge of the investigation. If you don’t see your state on the list below, do a Google search for your state’s funeral board and insurance department.

Missouri Board of Embalmers and Funeral Directors

Texas Department of Banking – Here’s a press release on NPS

Ohio Department of Insurance – the ODI put out a press release detailing the scam NPS was running on consumers.

Iowa Insurance Division – the IID has a press release with answers to consumer questions here.

Kentucky Office of Insurance

Illinois Comptroller’s Office Q&A for NPS and Lincoln Memorial customers

 


 

4/9/08 – The Texas Departments of Banking and Finance and Insurance issued a joint press release today about the “hazardous financial condition” of several prepaid funeral life insurance companies. What does this mean for consumers who’ve prepaid for their funerals with Memorial Service Life Insurance Company, Lincoln Memorial Life Insurance Co., and National Prearranged Services? We’ll try to untangle the thicket of government-speak below – read on. . .

 

  • The state believes the companies are in serious financial trouble, though we don’t know what “Routine oversight activities by TDI revealed a significant amount of surrendered transactions by the companies at the end of 2006” means.
  • The state has ordered the company to stop selling life insurance in Texas.
  • The state is requiring the companies to come up with a plan to make sure they pay out on life insurance policies consumers have already bought to finance their funerals.
  • The state claims consumers can expect the companies will pay out the full face amount of the policy, but that funeral homes and consumers can’t expect any new growth. For the consumer, this means the policy won’t keep growing to keep pace with inflation. It also means that funeral homes who’ve sold prepaid funerals to consumers with guaranteed prices will have to eat the difference if the customer’s funeral ends up costing more than the policy pays out. (Note to consumers – be sure you read your original contract. If it’s price-guaranteed, that means the funeral home has to provide the funeral you contracted for, even if your life insurance policy falls short!)

If you’ve got further questions about your policy or what all of this means, contact the Insurance Dept.’s Consumer Protection office at 800-252-3439, or the Dept. of Banking at 877-276-5554. Funeral directors should contact the Dept. of Banking.

Here’s the original press release. (Note to the Texas Departments of Banking and Insurancewe appreciate that you’re doing your job to protect consumers, honestly. But please, please learn to write press releases in clear, plain English that the public understands. It really does matter.)

 


Texas Department of Insurance 
Texas Department of Banking
FOR IMMEDIATE RELEASE FOR MORE INFORMATION
April 9, 2008 John Greeleyaltaltaltaltaltaltaltaltalt(512) 463-6425
Joint News Release  Russell Reese (512) 475-1324alt
 
Insurance, Banking Departments Issue Orders on Companies
Involved With Pre-Need Funeral Contracts
 
AUSTIN – The Texas Department of Insurance (TDI) has issued a Hazardous Financial Condition Order for Memorial Service Life Insurance Company, Lincoln Memorial Life Insurance Co., and National Prearranged Services, Inc. pursuant to Chapter 404 of the Texas Insurance Code. At the same time, the Texas Department of Banking (DOB) entered into an Agreed Order with National Prearranged Services, Inc., to cease selling prepaid funeral benefits contracts pursuant to Chapter 154 of the Texas Finance Code.

 

National Prearranged Services (NPS) of St. Louis sells pre-need funeral contracts in several states and is licensed in Texas by the DOB to sell insurance-funded prepaid funeral benefits contracts. NPS has approximately 39,000 insurance-funded prepaid funeral benefits contracts outstanding in Texas. NPS is a general agent for Lincoln Memorial Life Insurance Company and Memorial Service Life Insurance Company. NPS is ultimately owned by a Trust created by the Cassity family in the state of Missouri.

 

Lincoln Memorial Life Insurance Company and Memorial Service Life Insurance Company were placed in supervision by TDI in October 2007. Routine oversight activities by TDI revealed a significant amount of surrendered transactions by the companies at the end of 2006. In March 2008, TDI issued an order for the companies to cease writing new business in Texas. These actions were confidential, by statute.

 

The TDI-issued Hazardous Financial Condition Order requires the companies to establish a plan to pay policyholder claims and to address existing contracts.

 

The DOB-issued Agreed Order requires NPS to cease selling prepaid funeral benefits contracts in Texas. The DOB Order also requires NPS to take actions to comply with Chapter 154 of the Texas Finance Code for outstanding contracts and to return all prepaid funeral benefits contracts and associated payments received since March 17, 2008 to the purchasers. Finally, the DOB Order requires NPS to initiate actions to remove NPS as the policy beneficiary for polices issued in conjunction with Texas prepaid funeral benefits contracts.

 

“While every effort was made to secure the companies and return them to normal operations, the decision was made to take this regulatory action,” said Texas Insurance Commissioner Mike Geeslin. “As we move forward, our goal is to use every law on the books to protect consumers, coordinate with other regulators and states and – most importantly – keep all parties informed as issues develop.”

 

“It is imperative that we work closely with NPS and the funeral providers to ensure all Texas consumers receive their prepaid funeral goods and services as originally promised,” said Texas Banking Commissioner Randall James.

 

TDI, the DOB and regulators in other states will continue to work with NPS, Memorial Service Life Insurance Company and Lincoln Memorial Life Insurance Company for a reasonable resolution for consumers in Texas and elsewhere.

 

Texas consumers with pre-need funeral contracts funded by insurance policies written by Memorial Service Life can expect that the policies will be paid up to the face amount. However, it is unlikely that funeral providers will receive any additional compensation in the form of a policy or contract growth payment from NPS which will affect the 650 Texas funeral homes who have agreed to service the prepaid contracts as the funeral providers.

 

 

Consumers and insurance agents with questions about the status of a pre-need funeral contract should contact TDI’s Consumer Protection at alt(800) 252-3439 or the DOB at (877) 276-5554alt. Funeral home operators/agents should direct questions to the DOB.

 

# # #

ORIGINAL STORY published April 5, 2008 – If you’ve got a prepaid insurance plan for your funeral from National Prearranged Services or its subsidiary, Lincoln Memorial, Texas regulators won’t tell you if your policy’s in trouble, according to Ft. Worth Star Telegram columnist Dave Lieber. In a recent Watchdog column, Lieber said the Texas Dept. of Insurance won’t comment on whether or why the state has ordered the companies to stop selling in Texas.

Texas officials decline to comment on the financial status of NPS, which also goes by Forever Enterprises. Thanks, then, go to the Kentucky Office of Insurance, which tells us on its Web site that Kentucky has suspended NPS from selling because of a similar action in Texas. According to Kentucky, the Texas Insurance Department issued a directive to NPS’ subsidiary to cease writing new business in Texas effective March 21.
Reason cited: “Lincoln Memorial’s hazardous condition as well as other issues related to premium receivables.”

This is interesting, considering the Texas Department of Banking’s Web site lists Lincoln Memorial Life Insurance company as “active” with “normal operations.” Check for yourself on their site, but beware it must be one of the most user-unfriendly government sites ever. Looks like the Dept. wants to make it hard to get information by any means.

Sure enough, the Kentucky Dept. of Insurance lists a cease and desist order against Lincoln Memorial dated March 27, 2008. The order states, “Whereas, as a result of Lincoln Memorial’s hazardous financial condition as well as other issues related to premium receivables, the Texas Department of Insurance issued a Directive to Cease Writing New Business to Lincoln Memorial effective March 17, 2008.”

What’s going on, Texas? What about the consumers holding NPS or Lincoln Memorial policies? Why has the state ordered the company to stop selling, but still lists it as “active” with “normal operations?” Lieber writes:

The Watchdog asked Texas banking and insurance regulators for any information about NPS. They all declined to answer any questions, citing confidentiality laws.

“The fact that it came out in another state’s document, we have no control over that,” said John Greeley of the Texas Insurance Department. He couldn’t comment further, he said, because “among the range of actions we can take, some of the actions are confidential.” State insurance lawyers were unavailable for comment, he said.

Gee thanks. Care to explain to policyholders why something so important as ordering a company to stop selling insurance is “confidential?” FCA of North Texas‘ Jim Bates (also a board member of FCA National) told the Star-Telegram, “I can’t figure it out, there’s just something wrong about that. We should be given information about what our government agencies are working on.”

Hear, hear. Note to Texas regulators – your job is to protect the public. That includes warning consumers who may be depending on a bad insurance policy to pay for their funerals.

Hats off to Watchdog Dave Lieber – we need assertive press men like you to keep government accountable. Keep their feet to the fire.

Got information on National Prearranged Services or Lincoln Memorial? Leave us a comment below or email us at fca@funerals.org

Send me an email when this blog has been updated.

25 Comments

James Briscoe

They got me for 800 back in 93 am I entitled to recoup any money from the settlement. The funeral home that sold me my policy has gone under no longer in business

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