Financial Examination-Audit Process and Procedures

PURPOSE: This rule provides clarification of the financial examination process and procedures to educate licensees and the public. (1) The board shall conduct a financial examination of the books and records of each seller at least once every five (5) years, subject to available funding. (2) The board shall conduct financial examinations or audits as a means to ensure compliance with the provisions of Chapters 333 and 436.400 to 436.525, RSMo, and 20 CSR 2120-3 as those statutes and regulations relate to preneed funeral contracts. (3) The board will set the scope of financial examinations. (4) Upon determining that a financial examination or audit of a seller is to be conducted, the board will issue a notice to the assigned examiner that will instruct the examiner as to the scope of the financial examination or audit. (5) Before the board begins a financial examination or audit, the board may provide notice to the seller that the board will be conducting a financial examination. This notice will contain the following: (A) Notice to the seller that the board will be conducting a financial examination or audit; and (B) A request of the seller to submit to the board specified records the board will require to begin the financial examination or audit and a date by which those records are due to the board. The board may request copies of statements showing trust balances and assets, joint account statements, verification of insurance for insurance funded preneed contracts, copies of ledgers or reports detailing all active preneed contracts, copies of agreements with providers, agents, trustees, and any other records the board deems relevant to conduct the financial examination or audit. (6) Seller will be given opportunity to provide response to the financial examination or audit report. (7) Upon the board’s determination that all exceptions identified in a financial examination or audit have been resolved, the board will provide written notice to the seller that the financial examination or audit has been closed by the board. AUTHORITY: sections 333.330, 333.340, 436.470, and 436.520, RSMo 2016.* Original rule filed Jan. 30, 2020, effective Aug. 30, 2020. *Original authority: 333.330, RSMo 2009; 333.340, RSMo 2009; 436.470, RSMo 2009; and 436.520, RSMo 2009.