Michigan's Preneed Insurance Crossroads, HB 6261

Summary

This two-page Michigan Preneed Coalition handout, dated Fall 2022, urges passage of HB 6261, described as awaiting action in the House Committee on Rules and Competitiveness. It states that Michigan is the only state in the nation to tie preneed insurance options to the Consumer Price Index, and that carriers have left the state since the late 80s, leaving only two. It says the bill would put Michigan in line with 49 other states, with licensed agents, reserve requirements for carriers and installment plans. It explains that preneed insurance funds a funeral service agreement between a family and a funeral home, paid in one installment or monthly premiums.

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MICHIGAN PRENEED

COALITION ¢,

Michigan's Preneed Insurance Crossroads

HB 6261
Fairness and Peace of Mind

Status Quo
An Uncertain Future

Consumer Protection

Licensed agents providing products,
protecting consumers against fraud and
deception.

Safety & Security of Products

Carriers would be required to reserve funds
to plan for disastrous economic times,
providing safeguards to Michiganders.

Affordable Payment Plans

Michiganders would enjoy affordable
installment plans with insurance
protection, should a death occur while
making payments.

Preneed Insurance Stays in Michigan

Preneed insurance carriers would return to
Michigan, ensuring that this critical
product remains available to Michiganders.

A Modern, Competitive Market

Michigan would join 49 other states in
encouraging competition and lower rates.

x) Limited Consumer Protection

A license is not required to provide critical
paperwork, leaving families vulnerable to
theft and fraud.

€9 No Payment Plan Option for Families

If preneed insurance carriers leave the
state, Michiganders will no longer have
access to plans that offer protection and
price guarantees to consumers.

><) Risky Investments for Consumers

Without preneed insurance options,
consumers will be forced to subject their
savings to market volatility.

><) Funeral Homes in Jeopardy

Without preneed insurance, funeral homes
will experience workforce shortages due to
the exodus of preneed professionals to
neighboring states. This will be especially
challenging for border communities, as
Michigan's neighbor states enjoy robust
competitive markets.

Help Michigan families by passing HB 6261.

Awaiting action in the House Committee on Rules and Competitiveness.

HB 6261 ¢ Fall 2022

MICHIGAN PRENEED ;

®
MICHIGAN PRENEED y HB 6261: Helping Michigan Families with
COALITION ¢, a Competitive Preneed Insurance Market

? What is preneed insurance?

Preneed insurance is used to fund a funeral service agreement between a family and a
funeral home. Families decide every element they want included in a funeral service.
The funeral home director totals the costs, and that amount is the basis for the preneed
insurance plan. The amount is paid in one installment or through monthly premiums.
Upon one's death, the full services that were agreed upon are paid for by the policy.

How does preneed insurance help families? ?

Over time, inflation will likely cause funeral costs to increase, but preneed
insurance plans lock in costs early on. Along with locking in funeral costs,
preneed insurance provides safety and security for Michigan consumers.
It helps Michiganders prepare for final expenses by allowing people to pay
over time for coverage.

Michigan's Preneed Insurance Problem

Michigan is the ONLY state in the nation to tie preneed insurance options
to the Consumer Price Index.

As a result, insurance carriers have steadily left and avoided doing business in Michigan
since the late 80s, leaving only two insurance carriers here.

Our antiquated and burdensome regulatory structure presents a threat
to consumer protection in Michigan.

The two remaining insurance carriers are signaling future exits if we don't solve this
problem. This would be devastating to families, funeral homes, and funeral professionals.

The Solution: Modernize Michigan's Market /

House Bill 6261 puts Michigan in line with 49 other states, providing
enhanced consumer protection and creating a competitive marketplace.

This bill would increase available options to Michigan families and prevent potentially
catastrophic outcomes for funeral homes and funeral professionals.

HB 6261 « Fall 2022 1 of 2 MICHIGAN PRENEED &


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