New York State Legislature Passes Consumer Friendly Funeral Legislation

Albany , NY -- June 20 -- The New York State Legislature voted on June 19 to reaffirm the State's protections for consumers who prepay their funeral costs. Originally enacted two years ago, the Funeral Consumer Protection Act makes permanent - for the first time - the requirement that all funds set aside by a consumer to pay their funeral/burial costs be held safely in a trust account, as well as a prohibition on the use of surety bonds or any other "IOU" as a means to replace the actual funeral funds held in trust.

In another victory for our consumers, the existing ban on sales commissions in funeral service has been extended by another four years, through June 1, 2007 . Specifically, insurance companies will be forbidden from compensating a funeral firm to induce the sale of "preneed funeral insurance" policies to their consumers - a practice that NYSFDA 's members have long opposed.

The legislation (S.5637/A.9063), initiated by the state's funeral directors and sponsored by Senator Guy Velella (R-Bronx) and Assemblywoman Audrey Pheffer (D-Queens), is strongly supported by a partnership of senior/consumer advocates and funeral professionals, including AARP, NY StateWide Senior Action Council, NYS Coalition for the Aging, the Empire State Funeral Directors Association and the New York State Funeral Directors Association and its 750 members. The bill now goes to the Governor for his review.

Supporters of the legislation say that funeral insurance naming a specific funeral firm as the beneficiary is a bad deal for consumers as it is not portable, does not grow with inflation and exposes the consumer to loss of all preneed funds if the costly premium payments are not kept up. The bill would have no effect on ordinary term life insurance which a consumer may purchase as a method to pay funeral and final costs. Because of the increasing trend to prefunding funerals, they also maintain that it is important for consumers to feel secure when they place money in trust for their final wishes.

New York State Funeral Directors Association's Executive Director Bonnie Tippy urged the Governor to sign the bill into law without delay. "We want to make sure that New York State remains number one in guarding the interests of consumers who choose to prepay their funeral costs, and that the state's consumers will have this needed protection in place as soon as possible."

Ms. Tippy suggested that consumers visit NYSFDA 's Website at: "www.nysfda.org" to receive complete information about every aspect of preplanning a funeral, including a consumer checklist for prefunding a funeral which tells consumers what to look for when they make these arrangements.