June 13, 2008
Jefferson City, Mo. - The Attorney General's Office today notified the Department of Insurance, Financial Institutions and Professional Registration (DIFP) by letter that it is seeking the authorization necessary to bring legal action against any insurance companies or banks involved with National Prearranged Services (NPS), which provides pre-need funeral service contracts in Missouri and 18 other states.
The Attorney General currently is investigating NPS both independently and on behalf of the Board of Funeral Directors and Embalmers. The letter to acting DIFP Director Linda Bohrer states that the investigation has revealed "suspect business practices by companies working with NPS, including banks and life insurance companies, whose actions have contributed to the potential threat facing Missouri consumers."
Missouri law requires specific authorization from DIFP for the Attorney General to bring legal action against the insurance companies and financial institutions over which the department has direct regulatory supervision.
"Your Department has direct regulatory supervision over the entities providing life insurance contracts to NPS, as well as over the banks which were bound by Chapter 362 of the Revised Statutes of Missouri to protect the assets of NPS in trust for the benefit of Missouri consumers and funeral providers," the letter states. "It appears that litigation is or soon may be necessary to protect the interests of NPS's Missouri customers."
The letter asks that Bohrer, on behalf of the insurance and finance divisions, provide the authorization to the Attorney General to take all necessary and appropriate action under Chapter 407, which governs merchandising practices. Such authorization from DIFP "should be both immediate and broad enough to permit action against any or all of the insurance companies doing business with and for NPS or its related entities, as well as against Bremen Bank and all other banking institutions serving in similar capacities with respect to the assets of NPS or its related entities," the letter states.
"I am sure that you will agree that the evidence available to your divisions, as well as that coming to light in our investigation, is sufficient to justify - indeed compels - this step as a necessary predicate to such litigation as may be necessary to protect the interests of Missouri consumers," the letter from Chief Deputy Attorney General Karen Mitchell concluded.