Arkansas Insurance Commissioner Bans Funeral Home From Selling Pre-Paid Benefits Contracts
January 28, 2015 by Fran Matso Lysiak, senior associate editor, BestWeek: fran.lysiak@ambest.com
LITTLE ROCK, Ark. – Arkansas Insurance Commissioner Allen Kerr has issued an order that bans a funeral home from selling pre-paid funeral benefits contracts immediately.
The Jacksonville, Arkansas-based Arkansas Funeral Care voluntarily surrendered its license to the Arkansas State Board of Embalmers and Funeral Directors on Jan. 23, the state insurance department said.
The department is taking possession of all pre-paid funeral benefits contracts and account records of Arkansas Funeral Care, Kerr said in a statement. The contracts — life insurance and annuity policies, cash, financial assets and balances of the funeral home — are under review by the department.
A hearing to consider permanent revocation of Arkansas Funeral Care’s permit to sell pre-paid funeral benefits contracts is set for Feb. 11 at the insurance department. Plans of the business to transfer outstanding contracts to available substitute providers also will be considered, the department said.
Funeral homes selling pre-paid funeral benefits contracts in Arkansas must maintain an active license with the state’s board in order to provide funeral services and merchandise in pre-paid funeral benefits contracts.
Middle-income senior citizens and lower-income Americans nearing retirement often can turn to life insurers who sell basic coverage policies for funeral and other final expenses. The pre-need market is one in which policies are sold mostly through funeral homes, and primarily written as a single-premium contract (Best’s News Service, Oct. 10, 2011).
Families who have pending death claims or who may have a death claim on or before Feb. 11 should contact the department’s pre-paid funeral benefits staff so they can help in locating a substitute funeral provider for or on their behalf, the Arkansas insurance department said.