Preneed Contracts Loss Recovery Fund; creation, purpose, administration, loss recovery fee, reimbursement for claims; prohibition against use of existence of fund for sales, solicitation, or inducement to purchase contract; Preneed Contracts Loss Recovery Association; directors, appointment, terms; appeals.
Miss. Code Ann. § 75-63-81
in effectThere is established a Preneed Contracts Loss Recovery Fund, hereinafter referred to as the “fund,” to be administered by directors of the Preneed Contracts Loss Recovery Association, hereinafter referred to as the “association.” Directors are to be appointed by the Secretary of State. The purpose of the fund is to reimburse the estates, or in the absence of an estate filing, the purchaser or applicant with payment jointly to the funeral home providing services or merchandise, or both, of beneficiaries of preneed funeral contracts who have suffered financial loss as a result of the misfeasance, fraud, default, failure or insolvency of a registered Mississippi preneed provider. The fund shall be funded from a charge not to exceed Ten Dollars ($10.00) to be added to the cost of every preneed contract sold from and after July 1, 2009; however, if the preneed contract is funded solely with insurance that is protected by the Mississippi Life and Health Insurance Guaranty Association, then that fee shall not be charged. The association may reduce, suspend or resume collection of the fee at any time and for any period to ensure that a sufficient amount is available to meet anticipated disbursements and to maintain an adequate reserve consistent with actuarial guidance. The per-contract fees shall be remitted quarterly to the association for each quarter of the calendar year with a quarterly fee form as prescribed by the Secretary of State. The per-contract fee is not subject to the trusting requirements of Section 75-63-59. The fees shall be remitted to the association no later than fifteen (15) days after each quarter. Absent the Secretary of State’s approval of an extension for good cause shown, preneed providers failing to timely report and remit the per-contract fee to the association may be subject to a penalty of One Hundred Dollars ($100.00) per day for each day of delinquency, payable to the fund. All sums received by the association shall be held in a separate account maintained by the State Treasurer to be used solely as provided in this article. Warrants to the fund may only be issued by the Department of Finance and Administration upon request by a majority vote of the directors of the Preneed Contracts Loss Recovery Association. All interest or other income earned on the fund shall be retained by the fund. Reimbursements from the fund must not exceed the total payment made for preneed funeral services or merchandise, cemetery services or merchandise, or both. No current insurance benefits or future graduated insurance benefits may be reimbursed, including any current or future graduated insurance benefits in any insurance company insolvency guaranty fund association. Upon the death of the beneficiary and the applicant’s compliance with all applicable rules of the association, reimbursement from the fund may be made to the estate of the beneficiary, the purchaser or applicant with payment jointly to the funeral home or cemetery providing services or merchandise, or both, only to the extent to which losses are not bonded or otherwise covered. If the association makes payments from the fund under this section, the association is subrogated in the reimbursed amount and may bring an action against any person or entity, including a preneed provider. The association may enforce claims it may have for restitution or otherwise and may employ and compensate from the fund consultants, legal counsel, accountants and other persons it considers appropriate to assure compliance with this section. The association shall investigate all applications made and may reject or allow claims, in whole or in part. Payment may be made only to the extent that monies are available in the fund, and payments may be prorated among claimants. Reimbursements for completed claims must be processed subject to availability of monies in the fund. The association has complete discretion to determine the order and manner of payment of approved applications. The association may approve one (1) application, in whole or in part, that includes more than one (1) reparation claim for the benefit of purchasers of prepaid contracts of an insolvent registrant as part of a plan to arrange for another registrant to assume the obligations of the licensee being liquidated if the association finds that the plan is reasonable and is in the best interests of the contract beneficiaries. All payments are a matter of privilege and not a right, and no person has a right in the fund as a third-party beneficiary or otherwise. The association shall develop a form of application for reimbursement. This fund and all interest earned may be used only as prescribed in this section and may not be used for any other purposes to the extent losses are not bonded, insured, or otherwise covered, protected or reimbursed. Further, all monies deposited into the fund shall not be subject to any deduction, tax, judgment lien, levy, or any other type of assessment except as may be provided in this article. The association may expend monies from the fund to: Make reimbursements on approved applications; Purchase insurance to cover losses and association liability as considered appropriate by the directors and not inconsistent with the purpose of the fund; Invest portions of the fund as are not currently needed to reimburse losses and maintain adequate reserves, as are permitted to be made by fiduciaries under state law; Pay the expenses of the association for administering the fund, including employment of legal counsel, accountants, consultants and other persons the board considers necessary to assure compliance with this section; Effective upon June 23, 2017, no monies deposited to the fund may be used to reimburse, or otherwise defray any costs that the Office of the Secretary of State may incur in administering this fund, or in support of the association. No person may make, publish, disseminate, circulate or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter, poster or over any radio station or television station, or in any other way, any advertisement, announcement, or statement that uses the existence of the fund for the purpose of sales, solicitation or inducement to purchase any form of preneed contract covered under this article. The Secretary of State may establish rules and regulations necessary to implement the purposes of this section including, but not limited to, rules governing the association’s operations, claim procedures, determination of solvency or insolvency of a preneed provider, claimant eligibility and determination of appropriate loss payee. No purchaser or representative of a purchaser is provided in this section with any administrative right or legal or equitable right to any funds collected for this association to satisfy any judgment or economic loss of the purchaser from a prepaid funeral or cemetery organization except for the purposes of this section. This fund is established for the discretionary relief of purchasers and their representatives of prepaid funeral or cemetery contracts from insolvent prepaid funeral or cemetery organizations or prepaid funeral businesses with severe trust fund account shortages as determined by the directors. Coverage is limited to the claimant’s actual contract payments made. There shall be no fund coverage for additional economic damages, attorney’s fees, recovery costs, interest, other equitable relief or noneconomic damages. Further, no claimant shall be eligible for compensation from the fund unless the contract purchaser for whom a claim is asserted paid to the preneed provider the loss recovery fee required by subsection (2) of this section. The fund shall have no liability for preneed contracts sold or claims that occurred or accrued before July 1, 2009. There shall be no liability on the part of and no cause of action of any nature shall arise against any director of the association, the Secretary of State, his representatives, agents or employees for any act or omission by them in the performance of their powers and duties under this article, or in its administration, dispensation, handling or collection of funds for the program. Directors of the association shall be appointed by the Secretary of State and shall consist of no fewer than five (5), one (1) from each of the Mississippi Supreme Court Districts and two (2) from the state at large. In making director appointments the Secretary of State shall consider, among other things, whether all association members are fairly represented. At least three (3) of the directors must possess five (5) years’ or more experience in the preneed funeral service and merchandise business as an owner or manager. All directors shall be appointed for staggered six-year terms, with the exception of the initial terms of service for the original five (5) directors. The Secretary of State may appoint any director to a successive six-year term. The initial term of service for all directors shall begin on October 1, 2009, with the initial term of two (2) directors to be determined by the Secretary of State at appointment expiring on September 30, 2011, and two (2) directors to be determined by the Secretary of State at appointment expiring on September 30, 2013. The initial term for the remaining director to be determined by the Secretary of State at appointment shall expire on September 30, 2015. [Deleted] The association and its directors shall assist the Secretary of State and be subject to the applicable provisions of the laws of this state. The association shall be subject to examination and regulation by the Secretary of State. The association by its directors shall prepare and submit to the Secretary of State each year, not later than March 1 of each year, a financial report in a form approved by the Secretary of State and a report of activities during the preceding calendar year. Appeal rights for claim decisions issued by the association directors exist in the chancery court in this state in which an estate has been open for probate by the representative of the claimant; the chancery court in the county in which the preneed contract was purchased; or the chancery court in this state of the claimant’s or decedent’s home county. A notice of appeal must be filed within thirty (30) days of the association’s written order denying the claim, in whole or in part, and appeal to the chancery court is limited to a review of the record made before the association’s directors on a substantial evidence evidentiary standard.
Source: Public.Resource.Org MS CodeURL: https://unicourt.github.io/cic-code-ms/transforms/ms/ocms/r78/gov.ms.code.title.75.htmlFetched: 6/9/2026