Missouri regulators have rejected Attorney General Jay Nixon’s request to take further legal steps against a financially troubled St. Louis seller of prepaid funeral plans.
“Legal action … could worsen the impact on consumers,” Linda Bohrer, acting director of the state’s Department of Insurance, Financial Institutions & Professional Registration, told Nixon’s office in a letter made public Tuesday.
In cooperation with Missouri and other states, Texas insurance regulators in April seized National Prearranged Services Inc., along with two related insurance firms in Texas, and placed them in receivership.
The company’s financial meltdown has put an estimated 2,600 funeral homes in 19 states at risk of providing funerals under terms of consumers’ prepaid contracts but not being reimbursed their full value that was underwritten by National Prearranged. About 45,000 consumers are thought to be affected in Missouri and Kansas.
Bohrer told Nixon that regulators from numerous states are “making great strides in creating a plan which would offer the best possible protection to consumers and funeral homes in Missouri.
“Litigation by the attorney general’s office against insurance companies or financial institutions at this time could have a detrimental effect on the plan being developed by the special deputy receiver and insurance guaranty associations to protect existing and future assets for Missouri consumers and funeral directors,” she said.
A spokesman for Nixon disagreed.
“We are surprised and disappointed that the Department of Insurance and the Division of Finance have refused to allow the full arsenal of legal options to be used to protect Missouri businesses and consumers,” Nixon spokesman John Fougere said.
The St. Louis Cassity family controls National Prearranged and numerous affiliated businesses including Mount Washington Forever Cemetery and Funeral Home in Independence.