NEW CONSUMER PROTECTIONS FOR PREFUNDING FUNERALS

Albany , NY - January 17 - New protections for consumers who wish to prepay their funerals are now in effect in New York State . The Preneed Funeral Consumer Protection Act of 2001, recently passed overwhelmingly by the Legislature, has been signed into law by Governor Pataki.

The new law forbids the payment of commissions to funeral directors for selling "funeral insurance." The New York State Funeral Directors Association (NYSFDA), StateWide Senior Action Council and the Funeral Consumers Alliance strongly supported these new regulations which prevent the sale of a new preneed funeral insurance product.

The law's proponents have asserted that so-called funeral insurance is not a good deal for consumers, and that its sale during family preplanning conferences could be a conflict of interest on the part of funeral directors and interfere with their primary role of providing compassionate care to families.

Many consumer advocates have voiced concern that "funeral insurance" policies can jeopardize the safety and portability of funds consumers wish to set aside for their final expenses.

Another important new consumer protection in the bill would prohibit a funeral director from using a surety bond or similar method to replace or leverage any funds in a traditional funeral preneed trust account. This provision was sought by the bill's supporters to prevent any future problems here with preneed trusts such as those which recently occurred in Florida where leveraging had put preneed trusts at risk of being unavailable to families.

Furthermore, the Preneed Funeral Consumer Protection Act of 2001 strikes down the practice of "constructive delivery" when funeral merchandise such as caskets are sold for future use but not physically delivered to the family.

The new law will undergo review in June, 2003 to ascertain if it should remain on the books, or be amended to add any additional consumer safeguards which may come to light by that date.

NYSFDA Executive Director Bonnie Tippy indicated that she welcomed this provision. "We now have a window of opportunity to carefully study all state funeral service and product regulations to ensure that they deliver the appropriate level of protection to the State's consumers. We need to make sure that the safety and security of consumer preneed funds are beyond the reach of unscrupulous interests who seek to profit from family grief. To that end, we will be seeking consumer comment so that we can begin to draft amendments that serve the best interests of the consumer, and the funeral professionals who provide these consumers with caring service at a very difficult time."