Colorado Division of Insurance Issues Charges Against Neptune Society

Last month the Colorado Attorney General's office filed charges against Neptune Society for violations of Colorado's preneed funeral contract laws.

After an investigation prompted by a complaint from a funeral consumer, DORA’s Division of Insurance alleges that Neptune Society used "bait and switch" to lure consumers to purchase preneed funeral contracts.

Most pre-need funeral plans require full payment at time of purchase for funeral services, such as burial or cremation, although the purchaser does not know when, in the future, the services will be used. With funeral plans and pre-paid cremation services running thousands of dollars per contract, Colorado law provided that 75 percent of any preneed plan would be held in trust. That way, should the firm close its doors, move out of state, or no longer offer the service purchased, the consumer could still have most of the money returned in order to purchase another plan.

By reducing the amount actually trusted, through a dual-contract system, Neptune has kept approximately $2.6 million of consumers’ money that should have been protected in trust.

CFDA has been monitoring the Division of Insurance's efforts in this case over the past few months and will continue its dialog with DORA staff regarding proposed changes to preneed regulations.

Read statement issued by DORA Division of Insurance

The CFDA Board of Directors was installed at the annual business meeting held during the CFDA-CAC Combined Convention in Vail:

• President: George Malesich, CFD/CFSP/CCFE, Archdiocese of Denver Mortuary, Wheat Ridge

• President Elect: Elvin R. Caldwell, Jr., CFD, Caldwell-Kirk Mortuary, Denver

• Vice President: Kirk Saylor, MSP, Adamson Funeral and Cremation Services, Greeley

• Secretary/Treasurer:  Kevin F. Squires, MSP, Darrell Howe Mortuary, Lafayette

• Immediate Past President:  Kevin Rogers, MSP/CFSP, Rogers Family Mortuary, Alamosa

Directors:

• Harold “Dennis” Shoemaker, CFD, Swan Law Funeral Directors (SCI), Colorado Springs

• Ryan Phelps, MSP, Hood Mortuary, Durango

• Chalmer Swain, MSP/CFSP, Taylor Funeral Service, Delta

• Michael Wellensiek, MSP, Horan & McConaty, Aurora

• Mary “Kitsy” Winter, CFD-CET, Comi Funeral Home, Trinidad

• Steven L. Zabel, MSP/CFSP, All Veterans Burial & Cremation, Wheat Ridge (1 year term)

Certification fees for the Colorado Funeral Service Board will increase for the 2008-2009 fiscal year that begins November 1, 2008:

• MSP, CFD, CET or INT certification/application fees increase (from $65) to $75

•  CFD-CET dual certification/application fees increase (from $85) to $95

The last certification fees increase occurred in 2002.

Changes to the application process beginning with applications for review in November 2008, are as follows:

1. Application fees are required for all individuals who apply for certification; this fee will not be returned or refunded if the application is not approved.

2. If certification is approved, application fees will be applied to that year’s certification.

3. If application is not approved for certification upon its first meeting review by the CFSB Board, the applicant will have approx. three (3) months, or until the next quarterly CFSB Board meeting, to complete the requirements for certification. Application fees will be applied to that year’s certification if approved within the three-month period.

4. An application will expire if certification is not approved upon second review.

5.  If an individual wishes to re-apply, the process will start over again with a new application and payment of application fees.

New application forms are available on the CFDA web site as of September 29.

April 24, 2008
HB 1123 Clears Senate BLT Committee

The Senate Business Labor and Technology Committee meeting was unexpectedly moved up to Wednesday, April 23. The good news is that HB 1123 and amendment L.012 passed the Senate committee by vote of 5-2.  The self-funded bill is scheduled for Senate Appropriations committee on Friday, April 25.

April 23, 2008
CFDA and DORA Discuss Compromise

CFDA representatives met with DORA staff on April 21 and April 22 to explain more about the practice of funeral service and discuss possibilities for a compromise amendment.  

CFDA expressed several key areas of concern including:

·  Need for registration, qualifications, standards of practice, and accountability for individual funeral service practitioners

·  Limits of liability and disciplinary action for employee manager vs. funeral home owner

·  Necessity for random inspections of funeral establishments

·  Advisory group of funeral service professionals to assist with rulemaking and complaint process

·  Retain Cremation section as proposed in the original bill

·  Retain the Unlawful Acts additions as proposed in the original bill

Citing that the Sunrise Review did not outline enough documented cases of harm to consumers, DORA stated its primary objective is to provide a mechanism for consumers to report complaints and held firm on the following positions:

1. Allow for one registration per funeral establishment – either a facility manager OR a generic “funeral service practitioner” – who is held accountable for all operations of the establishment.
2. The Department will not consider any licenses or registrations for individual funeral service practitioners.
3. The Department will not define the scope of practice for Funeral Directors, Embalmers or Cremationists. They suggest that a “funeral service practitioner” is a generic category without recognition of the unique duties of Funeral Directors, Embalmers or Cremationists.
4. The Department will not recognize experience, education or basic training qualifications for funeral service practitioners.

CFDA representatives met with DORA executive director Rico Munn and several DORA staff members yesterday to discuss possibilities for a compromise amendment to HB08-1123.

CFDA expressed concerns about DORA's amendment that holds a Manager responsible for the operations of the establishment without defining standards of practice and accountability by individual funeral service practitioners.

CFDA representatives testified on Wednesday before the Senate Business, Labor and Technology Committee about House Bill 08-1123.

Senator Jennifer Veiga introduced a “strike below” amendment that effectively ELIMINATES ALL STANDARDS OF PRACTICE AND PERSONAL ACCOUNTABILITY that CFDA has long advocated.

March 31, 2008
Mortuary Science Bill moves on to Senate

House Bill 08-1123 was heard this morning by the full House of Representatives for its Third and final reading. The bill was adopted by majority vote of 41-24 after discussion both in favor and in opposition to the bill.

The legislation will move on to the State Senate and will likely be scheduled for first reading in the coming week.

March 28, 2008

CFDA Legislative Update

House Bill 08-1123 was heard this morning by the full House of Representatives for its Second Reading. The bill was adopted by majority vote after discussion both in favor and in opposition to the bill. An amendment was also adopted that will require funeral establishments to disclose to consumers other funeral businesses under common control or ownership and therefore allow consumers to make an informed choice.

February 5, 2008
Funeral Service Legislation Takes Step Forward

The Colorado House Business Affairs and Labor Committee voted this week to amend House Bill 1123 with changes proposed by CFDA and the bill was referred to the House Appropriations Committee after a 7-4 decision.

This legislation will promote consumer confidence by requiring registration and minimum standards of competence for funeral service practitioners, and offers an added level of protection through facility registration to ensure compliance with recognized industry practices, operational guidelines, and basic health and safety standards.

The CFDA supports registration for all funeral establishments to offer better consumer protection through compliance with recognized industry standards, operational guidelines, and health and safety standards.

January 17, 2008
CFDA January newsletter available online

     Download the January 2008 issue of CFDA News in PDF

January 3, 2008
CFDA Prepares for Next Legislative Session

The CFDA Legislative Task Force is preparing a new funeral service bill to be introduced in the Colorado General Assembly which convenes January 9.

Rep. Debbie Stafford has agreed to sponsor another funeral service bill and has met with CFDA representatives to discuss regulatory options.

Visit www.cofda.org to see ongoing updates regarding funeral service legislation.