JEFFERSON CITY — The financial collapse of a prearranged funeral firm could cost Missouri $18 million.
The executive director of the Insurance Guaranty Association says that since October 2008, it has made good on 4,000 claims to cover funeral contracts underwritten by the now-defunct Lincoln Memorial Life Insurance Co.
When an insurance company goes broke, other insurance companies licensed in Missouri are assessed a fee by the Insurance Guaranty Association to cover the policies of the bankrupt company. The insurance companies then can offset the premium taxes they owe the state over a five-year period by an amount equal to the assessments the companies paid.
State Sen. Brad Lager told the Columbia Daily Tribune that he doubts most legislators realize those insurance company assessments are reimbursed by the state.