State guaranty associations now have the court approvals they need to begin paying claims for benefits from Lincoln Memorial Life Insurance Company and Memorial Service Life Insurance Company, officials say.
A liquidation plan became final Oct. 22, according to officials in the office of Donna Garrett, the special deputy receiver who is overseeing the liquidation for the Texas Department of Insurance.
Lincoln Memorial and Memorial Service Life are affiliates of National Prearranged Services Inc., Clayton, Mo., a company that once distributed funeral insurance through funeral homes and other sellers.
National Prearranged Services affiliates provided funeral insurance for more than 100,000 consumers throughout the United States before the company failed in May.
State guaranty associations will protect insurance policy benefits, even if life insurer records show policyholders have taken out loans, made assignments, arranged for conversations, or authorized other transactions that may not really have been authorized by the policyholders, officials say.
The guaranty associations will not back the policy inflation adjustment feature, because that feature is not insurance, officials say.
But officials say policyholders with non-insurance claims may be able to file claims against National Prearranged Services at a later date.
Officials in Garrett's office report that she has shut down National Prearranged Services' offices in Clayton and moved the company's claim handling operations and other operations to Austin, Texas.
Texas officials note that, under Texas law, funeral homes that sold preneed contracts backed by National Prearranged Services affiliates must provide the types of funerals described in the contracts despite the failure of the insurers.
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