The Illinois Funeral Directors Association probably will not be able the meet 1o million(9.7 million)Comptroller claim, or fine.This could mean that the Comptroller in the State of Illinois may be forced into managing lot of little trusts. The IFDA may fail.
Merrill Lynch 18 Million Fine will not be available to the IFDA.
It was made very clear on Wednesday May 2oth 2009 in a press release that the IFDA would not have access to the Merrill Lynch 18 million dollar fee obtained by regulators.-Here is the Link to the Illinois Deparment of Financial Regulation- Division of Insurance- Stipulation and Consent Order
Key Man insurance will not take the IFDA to 10 Million.
Although there are these key man insurance policies that have quite a high value accessing the full amount of these policies will be a problem. According to deathcarelaw.com
“the key man insurance held by the trust poses a thorny problem. The insurance policies have a mortality charge that must be satisfied from a reserve that is probably invested in a volatile mix of fixed income and equity assets.
Surrendering the policies requires the trust to address certain tax penalties and policy fees, unless of course, the policies are rescinded or fail to constitute insurance.
“Where does this leave the IFDA and the Comptroller’s $9.7 million claim?
Unless the IFDA has assets (including its museum of funeral customs) sufficient to pay the claim, it will have to earn its way out of this hole. As with most state associations, the master trust represents its main source of revenue.”
The master trust in the current economic enviroment will not bring the IFDA to 10 million fast enough. If the Illinois Funeral Directors Association Fails the Comptroller in Illinois may find himself managing many little trusts. Funeral Directors overall are not pleased with the Comptroller in Illinois.
All this does not bode well for funeral consumers or directors in Illinois.
Funeral Industry|Funeral blog