A company that helps consumers pay for funerals has agreed to stop selling new contracts in Missouri and Texas.
National Prearranged Services Inc., St. Louis, has agreed to a temporary suspension of preneed contract sales in Missouri, according to the Missouri State Board of Embalmers and Funeral Directors.
“The agreement is a voluntary agreement and does not constitute disciplinary action,” the board says.
National Prearranged Services “has not admitted any violation of Missouri law,” the board says.
Meanwhile, in Texas, the Texas Department of Insurance says it has issued a hazardous financial condition order for Memorial Service Life Insurance Company and Lincoln Memorial Life Insurance Company, two insurance company subsidiaries of National Prearranged Services, and to National Prearranged Services.
The Texas Department of Banking has entered into an agreed order with National Prearranged Services to stop selling prepaid funeral benefits contracts in Texas, according to Texas insurance regulators.
Representatives for the companies were not immediately available to comment.
National Prearranged Services, which is owned by a family trust based in Missouri, acts as a general agent for Lincoln Memorial Life and Memorial Service Life, Texas insurance regulators report.
National Prearranged Services has about 39,000 insurance-funded prepaid funeral benefits contracts in place in Texas, officials say.
The Texas Department of Insurance placed Lincoln Memorial Life and Memorial Service Life in supervision in October 2007.
“Routine oversight activities by [the Texas department] revealed a significant amount of surrendered transactions by the companies at the end of 2006,” Texas insurance regulators say. “In March 2008, [the department] issued an order for the companies to cease writing new business in Texas. These actions were confidential, by statute.”
The new hazardous financial condition order “requires the companies to establish a plan to pay policyholder claims and to address existing contracts,” Texas insurance regulators say.
The Texas Department of Banking agreed order requires National Prearranged Services to return all contracts and refund all payments received since March, 17, 2008, Texas insurance regulators say.
The Banking Department order also requires National Prearranged Services to remove itself as the policy beneficiary for polices issued in conjunction with Texas prepaid funeral benefits contracts, Texas insurance regulators say.
Memorial Service Life probably will honor Texas pre-need funeral contracts up the face amounts, although funeral providers are unlikely to receive additional compensation, such as contract growth payments, Texas insurance regulators say.