National Prearranged Services, Inc. and Lincoln Memorial Life Insurance Company

The Division is examining a St. Louis company named National Prearranged Services, Inc. (“NPS”) and the related insurance policies and trust funds. The Iowa insurance policies were issued by Lincoln Memorial Life Insurance Company (“Lincoln Memorial”). These companies have done business in Iowa through Iowa funeral establishments.

On February 28, 2008 Lincoln Memorial agreed to cease writing new business in Iowa effective February 29, 2008. On March 12, 2008, NPS provided a written statement to the Division that NPS was no longer selling new preneed arrangements in Iowa. On March 24, 2008, NPS consented to a suspension of their preneed seller license pursuant to Iowa Code section 523A.503.

The Iowa Insurance Division is working to take actions to protect Iowa preneed sellers and consumers and we will continue to provide important information regarding this situation as it develops.
For individuals who purchased a preneed funeral arrangement involving NPS, the best source of information is the local Iowa funeral home where the arrangements were purchased.

Filing a claim

The Texas Department of Insurance placed Lincoln Memorial and National Prearranged Services, Inc. in Receivership on May 16, 2008.

Click to read the Order, the Rehabilitation Plan for the Companies, Frequently Asked Questions, and Press Release.

The following information was provided to us by Daniel Watkins, the acting manager of these companies.

WHAT IS THE STATUS OF NPS AND ITS RELATED INSURANCE COMPANIES?

NPS has agreed with state regulators to suspend all sales of pre-need contracts effective March 17, 2008 in all states, except Missouri, where the effective date to suspend sales was April 9, 2008.

NPS, at the recommendation of industry regulators, has engaged an independent manager with authority to run NPS and Lincoln Memorial Life Insurance Company and Memorial Services Life Insurance Company.

The Texas Insurance and Banking Departments issued orders agreed to by NPS and the insurance companies to

• Develop and implement a plan which protects consumers from harm due to the potentially hazardous financial condition of the companies;
• Pay claims on insurance policies and pre-need contracts;
• Engage an independent auditor to accurately determine the financial condition of the company.

NPS and the insurance companies are paying claims. It is the goal of Industry Regulators and new management of the companies to ensure all consumers receive payments for their prepaid funeral goods and services.

DEATH CLAIMS

Question: Are claims being paid right now?
Mr. Watkins: Yes, claims are being paid in compliance with applicable prompt pay laws and in no event later than 60 days of receipt.

Question: Do I fax my claims to the same number I’ve always faxed claims to?
Mr. Watkins: Yes. Continue faxing to 314.719.2110 for all claims.

Question: What documentation do I need to send with the claims?
Mr. Watkins: All you need to send is the death claim form (verified statement of performance for all states except Texas, certificate of performance for Texas) and a copy of the death certificate. Texas still requires a signed at need bill.

Question: Has the turnaround time changed?
Mr. Watkins: Yes. Unfortunately, we are unable to guarantee a 24 hour turnaround on any claim payments at this time. However, we will pay claims in compliance with applicable prompt pay laws and in no event later than 60 days of receipt of all necessary paperwork.

Question: Can I expect growth to be paid?
Mr. Watkins: We are deferring growth payments at this time. This may be subject to change and we will keep you advised.

Question: What do funeral directors do about the face value payment without growth?
Mr. Watkins: You will need to determine how you provide the services.

Question: Will Grandchild claims continue to be paid?
Mr. Watkins: Claims on insurance policy riders concerning grandchildren will be paid in the amount provided in the rider.

CANCELLATIONS/TRANSFER OF FUNDS

Question: Can funeral directors transfer existing contracts to another insurance company?
Mr. Watkins: No transfers or refunds are being made at this time.

CUSTOMER PAYMENTS

Question: Do contract holders continue making payments?
Mr. Watkins: It is necessary to continue making payments to have claims paid in the face amount.

Question: If I just stop paying, what will be paid at time of need?
Mr. Watkins: When a plan lapses, it becomes an RPU – Reduced Paid Up. This value is usually somewhat less than the actual amount paid in. For example, the owner may have paid $2000.00, but RPU value is $1900.00.

Question: I’ve noticed ACH hasn’t been drafted for the last few weeks. Why?
Mr. Watkins: We are changing banks and have hit a few speed bumps. We are diligently working to resolve this matter soon.

Question: Do we continue to send payments to the same address? Payable to the same company?
Mr. Watkins: Yes

Please email us at customerservice@n-p-s-inc.com with any other questions you have.

MISCELLANEOUS

Question: I’ve heard that my favorite processor and others are no longer with the company. Is that true? Who is going to answer my questions?
Mr. Watkins: We did have a significant staff reduction on Friday April 11, 2008. However, we are confident our remaining staff will be able to assist you with your needs. Call volume is very high at that moment and we are limited in staff. Please email us at customerservice@n-p-s-inc.com.

Question: It seems like when I call, I can never get through to anyone and no one returns my calls.
Mr. Watkins: We apologize for that. We are simply not able to get to every call at the time it comes in. We know how important communication is to you right now. We ask for your patience and understanding. Please know that we are doing everything possible to address your concerns.

Question: What about change of funeral home providers?
Mr. Watkins: We will continue to accept change of provider forms. The face amount of the contract or the amount paid in (depending on plan coverage) will be paid to the transferring home.