Funeral industry representatives urge Senate committee to increase regulation on pre-need funerals

JEFFERSON CITY - Representatives from the funeral industry urged Senate committee members Monday to increase regulation on funeral homes and pre-need contracts in Missouri.

"I don't know of any other profession ... (that) has come to the legislature to say, 'Please regulate our industry more, please audit us more, please investigate us more because we want to make sure the public is confident in our industry and in our profession and in the whole pre-need process,'" said Donald Otto, the executive director of the Missouri Funeral Directors Association.

Otto was among several people expressing support for the bill at Monday's committee hearing. Others offering support, including the attorney general's office, recognized that the bill is a work in progress and that there are concerns about some provisions. No one spoke against the bill.

The bill, sponsored by Sen. Delbert Scott, R-Lowry City, was written in reaction to the collapse of St. Louis-based National Prearranged Services. It highlights four key concerns laid out by Scott, including the guarantee to receive the purchased funeral, the ability to return or transfer the contract, the right of funeral homes not to participate in pre-need contracts and the right balance of paperwork and fees.

For a pre-need contract, a trust is typically created in a bank that will accumulate interest until the funds are needed to pay for the purchased funeral. During the interim, the provider can withdraw funds to pay for fees and other expenses related to the trust. The bill would limit the funds being removed as providers take money out for unrelated expenses, thereby leaving the trust without sufficient funds to provide the promised funeral.

Sen. Jeff Smith, D-St. Louis city, said he thinks the bill doesn't do enough to protect against this happening in the future.

"I would still be concerned that we haven't sufficiently constricted what this money can be used for," Smith said. "I just want to make sure you don't have any abuse whereby you increase executive compensation or increase perks at one of these companies. Instead, I believe we should really tighten these rules to make sure we don't have another debacle like before."

Sen. Matt Bartle, R-Jackson County, said he is concerned about requiring the licensing and registration of more industries.

"Every year, we're creating more licenser requirements all the time, and with every passing year, I get more reluctant about licensing," Bartle said. "I understand that we had a case here where you had some scalawags, ... we just had some people of bad moral character out there. But we've got to be cautious when we're creating licenses. I worry that some day you're going to have to have a license to parent your children."

The bill would require that the person or company be licensed by the state Board of Embalmers and Funeral Directors in order to be a pre-need provider. Several senators questioned the qualifications put forth by the bill, which would require that the provider "be of good moral character" and have obtained a high school diploma or the equivalent.

The last major legislation concerning funeral homes and pre-need services occurred in 1982, Otto said.