SENIORS, FUNERAL DIRECTORS AND KEY LEGISLATORS URGE GOVERNOR TO APPROVE NEW CONSUMER PROTECTIONS FOR PREPAYING FUNERALS

Albany, NY -- November 26 -- At a joint news conference today at the State Capitol, key legislatorsand representatives from the Senior Action Council of New York and the New York State Funeral Directors Association (NYSFDA), urged Governor Pataki to approve the Preneed Funeral Consumer Protection Act of 2001. The bill, which was overwhelmingly passed by the State legislature, would strengthen existing State regulations protecting consumers who prepay funeral costs.

Senior citizen and funeral industry representatives are voicing concern that current law could be manipulated by insurance companies to permit the sale in New York State of a new preneed funeral insurance product, which could jeopardize the safety and portability of funds consumers wish to set aside for their final expenses.

In addition, the funeral directors say that insurance companies want to market preneed insurance by trading on the trust families place in funeral directors. They maintain that commission selling has no place anywhere in funeral service, least of all during a funeral prearrangement conference.

In his statement, NYSFDA President Mark C. Kowalczyk said, "The Preneed Funeral Consumer Protection Act of 2001 must be enacted into law in order that funeral directors can maintain the needed confidence and trust from those we serve. A funeral service marketplace characterized and dominated by commissions, telemarketing and door-to-door insurance sales would completely undermine the unique and special bond we have with our consumers." He went on to emphasize, "This legislation - the most important to both funeral directors and our consumers in almost a decade - will ensure that funeral directing continues to be about serving our families at their times of need rather than selling insurance to them. As such, it is absolutely critical that the Governor exercise his well-known leadership in this area by signing this important legislation into law."

NYSFDA Executive Director Bonnie Tippy added: "Elements of the insurance industry continue to cite NYSFDA's master trust and the administrative fee it earns as the reason for NYSFDA's opposition to preneed funeral insurance. The fact is that our opposition to preneed funeral insurance and similar products dates back to 1934, more than 50 years before the trust was even founded. It should also be made clear that funeral directors earn no commissions or fees from this trust or from any other source.

"We are appalled at this attack on New York State's funeral directors, and can only conclude that it is driven by preneed insurers' typical narrow and relentless focus on the bottom line -- no matter the cost to funeral directors or to the consumers we serve."

The funeral directors organization of over 800 member firms and 3000 funeral directors points out that consumers already have several excellent options to pay for a funeral including: funds already invested in an FDIC insured interest-bearing trust account; the proceeds from a regular life insurance policy; or family savings.

According to the Senior Action Council, preneed funeral insurance is not consumer friendly because these policies are very expensive; usually is not transferable to another state (thus becoming worthless); and, a consumer can lose all benefits as well as any money paid into the policy if they stop making payments because of financial hardship or oversight.

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