Requirements for a Preneed Contract Joint Account

PURPOSE: This rule provides standards for preneed sellers regarding the management of preneed contract funds that are to be placed and held in joint accounts. (1) Effective January 1, 2025, any funds received for a jointaccount funded preneed contract shall be deposited with a financial institution authorized to do business in Missouri. The account shall be set up either— (A) In the joint names and under the joint control of the seller and purchaser, beneficiary, or party holding power of attorney over the beneficiary’s estate. Funds shall only be withdrawn or paid from the account upon the signatures of both the seller and the purchaser or under a pay-on-death designation or as required to pay reasonable expenses of administering the account; or (B) In an account titled in the beneficiary’s name and payable on the beneficiary’s death to the seller. (2) Sellers shall perform necessary steps to ensure all existing accounts for joint-account preneed contracts meet compliance requirements prior to September 1, 2025. Accounts set up in the name of the seller with the beneficiary/purchaser name in a memo line (e.g., Seller Name FBO Purchaser Name) are not compliant with the provisions of Chapter 436, RSMo, and are prohibited. (3) The seller shall maintain proper documentation of the action taken and provide the purchaser with notice of any changes made to the account. For any existing account which is not in compliance, the board may approve one (1) or more of the following actions to be taken by the seller: (A) Switch the funding source for the contract to utilize trust or insurance funding. The seller must procure written authorization from the purchaser before switching to a new funding source per section 436.425.5, RSMo; (B) Provide the purchaser the option to cancel the contract, if revocable. Purchaser and the seller must abide by the terms of section 436.456, RSMo; or (C) Request approval from the board to waive specific requirements for, or otherwise grandfather, an account in existence prior to January 1, 2025, which may not meet the joint account requirements. Requests for waiver should be received by the board no later than September 1, 2025. The board will consider these requests on an individual basis. To be considered, the seller’s license must be in good standing, not subject to probation, and the seller shall submit the following: 1. A written request for approval to be considered for grandfathering of existing accounts, including a detailed explanation why the seller is making the request; 2. A listing of all contracts the seller requests to have considered, detailing the contract number, contract date, beneficiary/purchaser name, financial institution, contract face value, and current account balance; 3. A detailed business and successor plan of the seller; and 4. A written acknowledgment that the seller may only withdraw funds from the account if— A. A death certificate is submitted to the financial institution; B. The purchaser exercises their right to cancel according to the terms of section 436.456, RSMo; or C. The seller exercises their right to cancel according to the terms of section 436.457, RSMo. (4) Upon request of the board, the seller shall provide the board with any documents requested to verify the account. Any letter of attestation from the financial institution should also confirm the account meets the requirements stated. (5) All funds received by the seller for a joint-account funded contract must be directly deposited into a joint-account within ten (10) days of receipt. Seller shall not deposit any funds received for a preneed contract into a general business account or holding account prior to the deposit into the joint account. AUTHORITY: sections 436.455 and 436.520.1, RSMo 2016.* Original rule filed July 1, 2024, effective Jan. 30, 2025. *Original authority: 436.455, RSMo 2009, amended 2011, and 436.520, RSMo 2009.