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FREQUENTLY ASKED QUESTIONS |
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ACTIVE ORPHAN PRENEED CONTRACTS
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Q. Why did I get a letter from the Special Deputy Receiver (the “SDR”) about my preneed funeral contract?
A. National Prearranged Services, Inc. (“NPS”) the company that sold or assumed your preneed contract is insolvent and was placed in court-ordered receivership for liquidation in 2008. The Receivership Court ordered that the SDR establish a claim, called a Proof of Claim (“POC”) in the receivership for your preneed funeral contract. The letter you received tells you the value of your claim.
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Q. What are post liquidation payments?
A. All preneed funeral contract payments received by the SDR on or after September 22, 2008 are held in escrow.
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Q. My letter does not show any post liquidation payments?
A. This means the SDR did not receive any preneed funeral contract payments on your preneed funeral contract on or after September 22, 2008.
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Q. I made payments after receivership/after 2008/after purchasing a preneed contract, but my letter does not show any such payments.
A. The SDR holds payments made after the Receivership Court ordered that NPS be liquidated on September 22, 2008. Payments made before that date are credited to the Class 5 claim awarded in the letter. If you believe that you made payments after September 22, 2008 and they are not shown on the letter or if you believe that the amount is wrong, you must file an appeal with the SDR by no later than 45 days of the date on the letter.
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Q. How to file an appeal if you disagree with the SDRs decision on your preneed funeral contract or the amount awarded.
A. The SDR’s letter describes how to file your appeal. Appeals should be filed within 45 days of the date on the letter. State all facts and any legal basis for the objection, and the reasons why the claim change should be allowed. Attach any records that you believe support your appeal
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Q. What happens now to my preneed contract?
A. Your preneed funeral contract is terminated. There is no further contractual obligation by any funeral service provider/funeral home to provide a service and merchandise under the contract.
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Q. What if I do not want my preneed contract cancelled?
A. Unfortunately, NPS is in liquidation and the receivership is in the process of closing. The SDR must process all claims before the receivership can be completed. Your preneed contract was one of the claims that had to be finalized.
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Q. Why do I have to sign the release to be paid the post-liquidation escrow money?
A. The Receivership Court ordered the SDR to obtain a release in order to pay the post-liquidation payments.
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Q. How soon will I get my refund?
A. There is a 45 day window to appeal the SDR’s decision on the claim. The SDR will pay the post-liquidation escrow money after the expiration of the appeal period or when any appeal has been resolved, whichever is later.
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Q. Most of my contract was paid for before receivership or my contract was paid in full before receivership (September 22, 2008). When do I get my money?
A. Claims for pre-liquidation payments are class 5 claims in the receivership. The SDR estimates that class 5 claims will not be paid in full but will get a pro rata distribution on your claim. Pro rata means a percentage of the total amount. It is too soon to know what that percentage will be until it is time for the payment. It is not known at this time when a distribution will be made to any particular class of claimants although the SDR anticipates that it will be in late 2024 or early 2025.
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Q. What about death claims for orphan contract owners?
A. The SDR will no longer process death claims on orphan contracts after December 1, 2023. Claimants or their next of kin may assign the Class 5 claim and its distribution to the funeral home that provided the services. An assignment form is posted on the estates’ website under the Forms tab on the Lincolnmemoriallife.com website.
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Q. What documents do you need if the contract owner is deceased or unable to sign the release?
A. Whoever executes the release must provide proof of their authority to sign for the contract owner, such as a power of attorney, testamentary letters or similar documents. Healthcare directives will not be accepted.
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Q. Will the funeral home be notified once the contract is cancelled?
A. Yes, a letter has been sent to the contracting funeral home at the same time your letter was sent notifying it that the claim under the preneed funeral contract was being awarded to you. The funeral home has the same right to appeal the decision as you do.
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Q. If the funeral home files an appeal, will this delay the payment of my post-liquidation payments paid on or after September 22, 2008?
A. Yes.
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ORPHAN CONTRACTS
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GENERAL
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Q. What Companies are involved in the Liquidation?
Lincoln Memorial Life Insurance Company ("Lincoln Memorial") is a Texas domiciled life insurance company licensed in 44 states.Memorial Service Life Insurance Company ("Memorial Service") is a stipulated premium life insurance company licensed only in Texas.National Prearranged Services, Inc. ("NPS") is a Missouri corporation affiliated with Memorial Service and Lincoln Memorial. NPS sold preneed funeral contracts.
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Q. What is the current Status of the Companies?
The Texas Department of Insurance (“TDI”) placed Lincoln Memorial Life Insurance Company (“Lincoln Memorial”), Memorial Service Life Insurance Company (“Memorial Service”), and National Prearranged Services, Inc. ("NPS") (collectively, the "Companies") into receivership for rehabilitation under Chapter 443 of the Texas Insurance Code. The Travis County District Court issued an Agreed Order Appointing Rehabilitator and Permanent Injunction ("Agreed Order") on May 14, 2008. Representatives of the Companies consented to the receivership and signed the Agreed Order. On September 22, 2008, the companies were determined to be insolvent and the court signed an Order Appointing Liquidator, Order Approving Liquidation Plan and Permanent Injunction (“Liquidation Order”), placing the Companies in Liquidation and approving a Liquidation Plan (“Liquidation Plan”) between the SDR and the National Organization of Life and Health Insurance Guaranty Associations (“NOLHGA”). On October 23, 2008, the Liquidation Order became final and the Liquidation Plan went into effect and the respective state guaranty associations began paying covered obligations of Lincoln and Memorial Service. There is no guaranty association coverage for NPS.On July 1, 2011, Investors Heritage Life Insurance Company assumed the Texas Guaranty Association's remaining Memorial Service Life covered obligations. The NPS preneed contracts associated with the Memorial polices were assigned to Investors Heritage Life. All premium collection and claims on or after 7/1/2011 are the responsibility of Investors Heritage. Contact Information is available on the “Home” page of this website. This web page will be updated as new information becomes available.
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Q. Who is in charge of Lincoln, Memorial and NPS?
On May 14, 2008, Memorial, Lincoln and NPS consented to be placed in receivership by a Texas court by signing an Agreed Order for Rehabilitation ("Agreed Order"). The Commissioner of Insurance for the State of Texas was named Rehabilitator ("Rehabilitator") for the companies, and has now been named as Liquidator (“Liquidator”) for the Companies. The Liquidator has taken over all the powers of the Companies' directors, officers and managers.Donna J. Garrett was appointed as the Special Deputy Receiver ("SDR") to administer all three Companies. On December 1, 2011, Ms. Garrett retired, and Jo Ann Howard & Associates, P.C. was appointed as SDR.
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Q. Can Lincoln or Memorial accept Applications for New Insurance Policies?
No. The Companies are not accepting applications. The Companies stopped issuing new policies effective March 17, 2008. The SDR has authority to collect payments due on existing business.
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Q. What is the effect of the Order Appointing Liquidator, Order Approving Liquidation Plan and Permanent Injunction (“Liquidation Order”)?
The Liquidation Order states that the Companies are insolvent, and appoints the Commissioner of Insurance as Liquidator for the Companies. This means that all assets of the Companies will be liquidated under a Plan approved by the court, and used to pay liabilities according to the priorities set out in Tex. Ins. Code § 443.301. Under the court approved Liquidation Plan, individual state guaranty associations will pay the original death benefit for life insurance policies issued by Memorial or Lincoln, ignoring any policy loans, assignments, conversions, and other insurance policy transactions not authorized by the consumer that may have taken place. Payment will be to the funeral home or other burial service providers when burial services are provided. Effective 7/1/2011 the covered obligations of Memorial Service were assumed by Investors Heritage Life Insurance Company.Obligations in preneed contracts that are not funded by an insurance policy (such as cost of living or inflation growth adjustments) will not be paid under the Plan because insurance guaranty associations are prevented by their laws from paying non-insurance obligations.
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Q. What is the best way to receive continuing updates or to find out more information?
Consumers and funeral homes monitoring the situation should do so through the appropriate regulatory entities, since information from other sources may be unreliable or inaccurate.Information and copies of relevant Texas court documents are available on this website. Inquires may be sent by email to info@LincolnMemorialLife.com.The SDR may be contacted by phone at 1-800-334-3851.
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Q. What kind of action will the SDR take against individuals who contributed to this situation?
The SDR, in conjunction with NOLHGA (the National Organization of Life Health Guaranty Associations) filed a Racketeering lawsuit in federal district court in St. Louis Missouri against a number of individuals and entities responsible for the insolvency of the companies. In addition, the SDR has cooperated with and responded to requests for information and documents from state and federal investigators. A federal grand jury in St. Louis indicted Doug and Brent Cassity, along with others, for violations of federal statutes relating to mail, wire and insurance fraud. A link to the SDR’s federal court lawsuit and the federal indictments is available under the “Legal Document” tab.
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Q. How to file a Fraud Report or Complaint?
Contact information for each state insurance department is provided under the “Links” section of this website.Texas Insurance Fraud Toll-Free Hotline - 1-800-252-3439Online Fraud Reporting for Insurance Companies - http://www.tdi.texas.gov/fraud/frsiufrrpt.htmlOnline Fraud Reporting for Consumers - http://www.tdi.texas.gov/fraud/onlinereport.htmlYou may e-mail, mail, or fax your complaint along with copies of your supporting documents toTexas Department of InsuranceConsumer Protection Program (MC 111-1A)P.O. Box 149091Austin, TX 78714-9091Fax: 512-475-1771E-mail: ConsumerProtection@tdi.texas.gov
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HOW TO CONTACT US
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Q. Mailing Address for General Correspondence of Lincoln or NPS
Please send mail to:Jo Ann Howard & Associates, P.C., Special Deputy ReceiverP.O. Box 160050Austin, TX 78716
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Q. Mailing Address for Coupon, Premium or Contract Payments
Lincoln Memorial Life Insurance Company, P.O. Box 660548, Dallas, TX 75266.National Prearranged Services, Inc., P.O. Box 660767, Dallas, TX 75266.Memorial Service Life Insurance Company – covered obligations were assumed 7/1/2011 by Investors Heritage. Please direct all questions about a Memorial Service Life policy or the related NPS prepaid funeral benefit contract to: Investors Heritage Life Insurance CompanyPO Box 717Frankfort, Kentucky 40602Phone: (800) 422-2011Fax: (502) 875-7084
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Q. Fax for Lincoln and NPS
(512) 328-0072(512) 329-7167(512) 329-7165(512) 329-7174
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Q. Email for Lincoln and NPS
You may send email inquires to info@lincolnmemoriallife.com
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Q. Phone for Lincoln and NPS
Toll Free at 1-800-334-3851 or (512) 328-0075Please note that call volume is frequently very high. We appreciate your patience. Please know that our staff is working diligently to assist you with your questions.
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Q. Missouri Insurance Guaranty Association
Phone: 1-800-769-6320 or visit their website at http://www.mo-iga.org
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CONTRACT / INSURANCE POLICYHOLDERS
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Q. What effect does the Liquidation Order and Liquidation Plan have on preneed contracts, insurance policies and claims?
Consumers with preneed contractual obligations should continue to honor their obligations under the agreement. This means that if a consumer has an NPS contract or a Lincoln or Memorial Service insurance policy that requires periodic payments, the consumer should continue to make those payments in order to keep the contract or insurance policy in force and to ensure that any insurance policy is covered under the Plan. Consumers with paid-up NPS contracts or policies do not need to do anything. Funeral providers should not expect to receive additional non-insurance policy compensation in the form of contract growth payment from NPS under preneed contracts or other arrangements. Effective 7/1/2011 the covered obligations of Memorial Service were assumed by Investors Heritage Life Insurance Company. Contact information is available on the "Home" page.
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Q. If Lincoln Memorial or Memorial Service provides insurance coverage that secures preneed funeral contracts, is the coverage in jeopardy?
No, that insurance coverage is not in jeopardy. Under the Plan, the individual state guaranty associations will pay for policy obligations, according to the terms of the Plan, provided that the insurance policy is still in effect.If the preneed contract or insurance policy requires continuing payments, then consumers should continue making these payments (and bring any late payments current), otherwise their insurance coverage could be cancelled. Effective 7/1/2011 the Memorial Service covered obligations were assumed by Investors Heritage. Refer to the “Home” page for contact information.
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Q. Is a Funeral Provider still required to honor the preneed contract?
Yes. Neither the Agreed Order placing these companies into receivership nor the Liquidation Order alters the obligations that funeral homes have to consumers. Although inflation or growth payments under the NPS contracts will not be paid under the liquidation plan, funeral homes are still obligated to honor the preneed burial contracts at the time of need. In Texas, the funeral home still has a contractual liability to honor the preneed funeral contract by furnishing the described benefits specified in the contract, or provide their equivalent in quality, for the contract price as promised.
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Q. What should I do if a Funeral Provider is refusing to honor a preneed contract?
If a funeral provider is refusing to honor a preneed contract, you should contact the SDR and the preneed regulator in your state. In Texas, contact the Texas Department of Banking at (512) 475-1285 or toll-free at (877) 276-555.
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Q. What if I need policyholder services such as:
Change of addressChange beneficiaryChange funeral providerPaid in Full CertificateChange billing date or change bank.Copy of prearranged funeral agreement or preneed contract.All requests must be in writing. Please send request to:Lincoln/NPSAttn: Claims DepartmentP.O. Box 160050Austin, Texas 78716 Effective 7/1/2011 the Memorial Service covered obligations were assumed by Investors Heritage. Refer to the “Home” page for contact information.
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Q. What if I want to cancel my insurance policy or preneed contract?
Requests to cancel your policy or contract must be received in writing. Whether you receive a return of monies will be subject to the coverage provided by the Insurance Guaranty Association, the terms of your policy or contract and in accordance with the Liquidation Plan.Please mail your request to:Lincoln/NPSAttn: Claims DepartmentP.O. Box 160050Austin, Texas 78716 Effective 7/1/2011 the Memorial Service covered obligations were assumed by Investors Heritage. Refer to the “Home” page for contact information.
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Q. Do I need to continue making my premium payments?
The Insurance Guaranty Associations have assumed the responsibilities for the in-force policies of the insolvent life insurance companies. In order to receive benefits from the Insurance Guaranty Associations, premiums must continue to be paid to keep the coverage in-force. Effective 7/1/2011 the Memorial Service covered obligations were assumed by Investors Heritage. Refer to the “Home” page for contact information.
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FUNERAL PROVIDERS
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Q. Is a Funeral Provider still required to honor the Preneed Contract?
Yes. Neither the Agreed Order placing these companies into receivership nor the Liquidation Order alters the obligations that funeral homes have to consumers. Although inflation or growth payments under the NPS contracts will not be paid under the liquidation plan, funeral homes are still obligated to honor the preneed burial contracts at the time of need. In Texas, the funeral home still has a contractual liability to honor the preneed funeral contract by furnishing the described benefits specified in the contract, or provide their equivalent in quality, for the contract price as promised.
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Q. What if I need a Funeral Home Report?
Due to the insolvency of the companies, we are not able to provide this data.
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Q. What is the death claims approval process?
This is a multistep claims approval process required by the Order Approving the Liquidation Plan. Payment is also, to some extent, dependent on the response time from the Funeral Home. In summary, the steps for claims processing are:1) Claims are submitted to the Special Deputy Receiver, the servicing agent for the guaranty associations, verified as complete and processed by the claims staff in compliance withthe Liquidation Plan.2) The processed claims are then submitted to the applicable Insurance Guaranty Association for approval.3) The Insurance Guaranty Association notifies the servicing agent that the claim is approved.4) The servicing agent then sends notice of the claim approval and forms to the Funeral Home either by fax, email or mail. 5) Upon receipt of the fully executed and completed forms from a funeral home, the servicing agent sends a funding request to the applicable state Insurance Guaranty Association.6) The applicable state Insurance Guaranty Association funds payment of the claim by transferring money to the servicing agent's Claims Account.7) The servicing agent will then issue a check and mail it out.
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Q. Do Funeral Homes have to submit a W-9 with each death claim filed?
No, only one W-9 per Payee per Calendar Year is required. The Special Deputy Receiver will track receipt of the W-9 and not require additional forms with each claim. However, it is possible that a Funeral Home with multiple claims may receive a duplicate request. In that event, the Funeral Home can fill it out again or simply refer to the previously submitted form.
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Q. Can electronic payments be made directly to the Funeral Home’s bank account?
We are unable to make electronic payments. Electronic transfer is not available at this time.
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INSURANCE POLICY / PREMIUM PAYMENTS
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DEATH CLAIMS
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Q. Is there any change to the process for submission of death claims?
Yes. In general, Lincoln claims should still be submitted to the SDR, with the documents required. Please note the filing requirements and new fax number below. Memorial Service claims on or after 7/1/2011 should be submitted to the assuming carrier Investors Heritage Life Insurance Company. Contact information is available on the “Home" page.For Lincoln claims the state insurance guaranty associations require the following documents to complete your submission: • Copy of the Death Certificate • Verified Statement of Performance • Itemized Funeral Home Bill for merchandise and services• “Next of Kin/Personal Representative Release, Subrogation and Assignment Form” (signed by the next of kin or personalrepresentative of the decedent when the funeral arrangements are made)• Seller’s Affidavit of Contract Performance (AR only) In addition to the above documents, assignment forms will need to be completed by the provider of services in order for claims to be paid. If the provider of services assigned its rights to a third party (for example a “funding” company), the third party must also sign an assignment form. You will receive the assignment forms and instructions to complete them after the claim is approved for payment.
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Q. Where should Death Claims be filed?
Lincoln claims may be submittedBY MAIL : Claims DepartmentP O Box 160050Austin, TX 78716BY FAX : Claims Department (512) 328-0072(512) 329-7165(512) 329-7179(512) 329-7167BY EMAIL: Claims@lincolnmemoriallife.comMemorial Service claims on or after 7/1/2011 should be submitted to the assuming carrier: Investor Heritage Life Insurance Co.P. O. Box 717 200 Capital AveFrankfort, KY 40602
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PROOF OF CLAIMS
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What is a Proof of Claim?
A Proof of Claim (POC) is a form for submitting a claim against the assets of a receivership estate. There are three estates, Lincoln Memorial Life, Memorial Service Life and National Prearranged Services. Each company is a separate and distinct entity. A POC may be filed against any one or more of the three companies by checking the appropriate box on the POC form.
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What is the status of my Proof of Claim?
Proof of Claim forms received by this office are logged and assigned a POC number. Once it has been determined that there are sufficient assets with which to make a distribution, the SDR will adjudicate your Proof of Claim and determine the approved amount. If additional information is needed to process the claim, our office will contact the claimant to request the information. After all Proof of Claims have been processed and an approved claim amount is established, the SDR will calculate the anticipated pro-rata distribution. After the distribution is calculated the SDR will seek court approval to distribute assets to approved claimants. Notice of the application for approval to pay claims will be posted on the estates' website. A POC is deemed to have been filed in the receivership estates for orphan contracts and CA Insurance Guarantee Association deductible claims.It cannot yet be predicted when or how much money will be available to pay estate claims. Claimants will receive written notice of the final disposition of their Proof of Claim.
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