Bill Protecting Preneed Funeral Funds Becomes Law

State's Funeral Directors Hail Governor's Signature

Albany , NY -- July 08-- Governor Pataki has just announced that he has signed into law a bill which mandates strict regulation of preneed trusts established by consumers to prefund their funerals. Originally enacted two years ago, the Funeral Consumer Protection Act makes permanent the requirement that all funds set aside by a consumer to pay their funeral/burial costs be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 funds held in trust.

Bonnie Tippy , executive director of the New York State Funeral Directors Association,
praised Governor Pataki for his pro-consumer stance. "In signing this bill into law, the
Governor has ensured that New Yorkers who choose to prepay their funerals will have full
protection for their final costs. The new law is something the state's funeral directors
worked hard and long to see accomplished. We are so gratified that New York State will
remain number one in guarding the security of preneed funds."

In another victory for the State's 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.

Supporters 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 new law, initiated by the state's funeral directors and sponsored by Senator Guy
Velella (R-Bronx) and Assemblywoman Audrey Pheffer (D-Queens), had been
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 law is effective immediately and retroactive to December 12, 2001 (the date the
original act became effective).