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SPRINGFIELD, IL – Comptroller Dan Hynes has ordered National Prearranged Services, Inc. to stop selling insurance-funded prepaid funeral benefit contracts in Illinois. The order was issued following an investigation by Hynes' office which discovered irregularities by NPS in the selling of those contracts. The order, issued in January, was kept confidential to allow regulators in Illinois and other states to continue their investigatory and regulatory efforts. "Our office has done and continues to do all in its power to assure that the consumers who purchased policies in good faith, are protected," Hynes said. "This appears to be a case of consumers and funeral homes across the country being taken advantage of by an unscrupulous business."
National Prearranged Services (NPS) of St. Louis sells pre-need funeral contracts in several states, including Illinois. NPS is an affiliated entity of Lincoln Memorial Life Insurance Company and Memorial Service Life Insurance Company, both are Texas-based insurance companies. NPS has about 16,000 insurance-funded prepaid funeral benefits contracts outstanding in Illinois that were sold through more than 200 licensed funeral homes. Hynes' office launched its investigation of NPS last summer, uncovering wide-spread wrongdoing. The office immediately alerted the Illinois Department of Financial and Professional Regulation, which regulates the selling of insurance in Illinois, and other regulatory authorities. In addition, the office took measures to secure documentation regarding NPS-related consumer contracts from funeral homes which are licensed by the Comptroller's Office to sell prepaid funeral services. The more than 950 funeral homes licensed to sell pre-need funeral products in Illinois were advised not to use NPS or Lincoln Memorial instruments. Hynes said his office is working on behalf of consumers to ensure documented claims are honored by Lincoln Memorial. In the event Lincoln Memorial is unable to pay policyholders' claims, the Comptroller's Office will work with the Illinois Department of Financial and Professional Regulation to obtain payment from the Illinois Insurance Guaranty Fund, which was established in state law to pay insurance claims of insolvent companies. Hynes said the regulatory action taken by his office can now be disclosed as the confidential nature of ongoing investigations has concluded. Consumers with questions or concerns about the status of their pre-need funeral contract can contact the funeral home where they purchased the contract or they can call the Illinois Office of the Comptroller consumer hotline toll-free at 1.877.203.3401. Consumers also can call the general office number at 312.814.2451. Due to the volume of calls received by the office, callers may reach voice mail and are advised to leave a message. A staff member will call them back. For more information consumers can also visit the Comptroller's web site at www.ioc.state.il.us.
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