Preneed regulation after the NPS scandal

The National Prearranged Services fraud led many states to amend their preneed statutes — most consequentially by prohibiting funeral homes from being named as direct beneficiaries on the life-insurance policies funding preneed contracts. The restriction still shapes how preneed products are designed and sold: for consolidators it is an ongoing compliance and structuring cost across thousands of contracts in states with differing rules; for underwriters and agents it is the design constraint the product category lives under.

The enforcement stakes are not theoretical: Michigan's ledger carries a 2026 sentencing for a preneed embezzlement scheme — restitution of $1,111,165.77 to 204 victims — verified against the Attorney General's own release.