Rep. Eric Major, D-Fairfield, introduced House Bill 405 after a number of North Alabama funeral homes and cemeteries were placed into receivership by the Alabama Department of Insurance.

Companies regulated by the Alabama Department of Insurance go into receivership when it is determined they can not meet their financial obligations to their customers.

Since the Alabama Legislature passed the Pre-Need Cemetery and Funeral Home Act in 2002, more than two dozen funeral homes and cemeteries have been taken over by the state.

About 1,500 customers are affected by the receivership of the 19 funeral homes and cemeteries owned by Mike Graham and Associates, a Texas company.

Rep. Major&8217;s bill would accomplish three purposes:

– It would tighten restrictions on the handling of consumers&8217; money by requiring that 75 percent of all funds paid be put in a trust within 90 days of receipt. Currently, most funds are placed in a trust, but the funeral/cemetery operator has the option of placing funds in a trust, getting a bond, getting a letter of credit or selling an insurance policy to the consumer. Most use the trust option, but under current law, they don’t have to trust any payment until the entire contract price is paid off.

– It would create a guaranty fund mechanism to help consumers pay for services if a funeral home or cemetery goes insolvent.

– It would create a regulatory fund that would help the Alabama Department of Insurance hire more examiners and investigators to find bad funeral and cemetery operators.

&8220;The current law has gaps that hurt Alabama citizens,&8221; Alabama Department of Insurance Commissioner Walter A. Bell said.

&8220;There is no more emotional time than in the loss of a loved one. Without the added consumer protections that this bill would bring, we will continue to see more Alabamians with the added burden of not receiving a service they paid for in good faith.&8221;

AARP Alabama director Joan Carter said, &8220;Not only is this among the most vulnerable times for a family, often those who are affected are among our state&8217;s most vulnerable residents, our older population.

&8220;We&8217;re asking our elected officials to support this bill, which will help protect the emotional and financial security of all Alabamians, especially our older, more susceptible residents,&8221; Carter said.

Your contact concerning this bill will assist legislatures in taking appropriate action in protecting family investments in pre-need funeral and cemetery services.

Dr. Marvin Copes serves as a volunteer for AARP. He can be reached at mailto:mlcopes@charter.net