House Joint Resolution 141 (Appendix A) established a joint subcommittee to examine marketing and financing practices associated with preneed funeral contracts.

Marketed by funeral establishments, preneed funeral contracts enable individuals to make advance purchases of their funeral arrangements and to establish payment sources when the services are performed. Trusts or insurance policies fund most preneed contracts, but a purchaser may prepay the full sales price directly to the funeral establishment.

Preneed funeral contracts were last studied by a joint subcommittee of the Virginia General Assembly pursuant to House Joint Resolution 50 of 1988. That study focused on preneed contract solicitation practices, service and financial considerations. Recommendations made in the subcommittee's report to the Governor and the 1989 General Assembly (HB 52, 1989; attached as Appendix B) included assigning preneed contract oversight responsibilities to the Board of Funeral Directors and Embalmers; prescribing mandatory disclosures within preneed contracts; and establishing purchaser rights and procedures for contract cancellation and refunds.

The 1988 joint subcommittee emphasized that "consumer protection is a primary concern in the regulation of preneed funeral contracts" (HD 52, p. 2). HJR 141 echoed that theme six years later, directing this subcommittee to determine whether the work of the 1989 General Assembly currently provides adequate protection for consumers purchasing preneed contracts.

Authority of the Department of Health Professions. It was suggested to the joint subcommittee that the Department of Health Professions should be authorized to intervene more expeditiously in cases where preneed contract purchase money may be lost and to seek injunctive relief or the appointment of a receiver in such circumstances. The subcommittee's draft language on this issue is attached as Appendix M; HB 1839 (Appendix O) contains the language passed by the 1995 General Assembly.

House Bill 999. House Bill 999, carried over from 1994 to 1995 in the House Corporations, Insurance and Banking Committee (CIB) was reviewed by the joint subcommittee. The bill (copy attached as Appendix E) would have required that funds used to purchase any preneed funding contract or instrument incorporating the word "trust" be deposited in a Virginia financial institution. The joint subcommittee made an advisory recommendation that the bill not be recommended by House CIB.

Centralized preneed recordskeeping. Finally, the joint subcommittee reviewed and recommended a proposal to permit centralized preneed recordskeeping by funeral establishments in Virginia under common ownership, management or control. The recommendation was intended to assist companies with several chapels which must, under current Board regulations, maintain preneed contracts and related records at the funeral establishments. The subcommittee recommended language attached as Appendix N; House Bill 1494 (Appendix P) is the measure passed by the 1995 General Assembly.