Former director loses state insurance license
Megan Hess accused of selling body parts without families’ OK
The former owner of a Montrose funeral home accused of shipping harvested body parts around the world without their family members’ knowledge has been implicated in another alleged money-making scheme discovered by Colorado insurance regulators.
Megan Hess, who operated the defunct Sunset Mesa Funeral Directors, had her insurance license revoked in August after state regulators said she sold contracts for future funeral services but instead pocketed the money — never giving the policy or contract to the insurance company, the state said in its final agency order.
The license revocation was ordered Aug. 27 by the Colorado Division of Insurance, which falls under the state Department of Regulatory Affairs.
Hess also was hit with nearly $38,000 in fines and $2,385 in restitution for violating Colorado insurance laws. The revocation was first reported by The Colorado Sun.
The state originally suspended Hess’ insurance license in February, when regulators outlined the former funeral director’s alleged tactics. According to the order of summary suspension, three people attempted to purchase from Hess what is called “preneed funeral contracts” — a method of paying funeral expenses in advance.
Funeral homes often have similar systems in place. People pay for future services up front or in installments as part of life insurance policies, and the insurance agent at the funeral home puts that money in a trust. When the person dies, that money then becomes available to pay for expenses.
But state regulators allege that the three individuals paid Hess for preneed contracts or life insurance policies, and Hess kept the money for herself. Payments ranged from $495 to $995, according to the suspension document.
The kicker, regulators said, is that Hess has never been licensed to sell preneed contracts in Colorado.
She was a licensed agent for United Heritage Life to sell life insurance.
Hess did not respond to a Denver Post email requesting comment.
The fraudulent tactics Hess allegedly used are rather unusual, said Vince Plymell, assistant commissioner for the Division of Insurance.
“With this case — and the reason for the suspension — we heard from some consumers that either the application or the money wasn’t getting to the insurance company,” Plymell said. “In the world of insurance, that’s not a good thing.”
The insurance license trouble comes as Hess faces multiple lawsuits and an FBI investigation looking into her dealings at the Sunset Mesa funeral home. Dozens of Western Slope residents allege that Hess sold their family members’ body parts without permission and returned the cremated remains of other people instead.
A spokesman for the U.S. Attorney’s Office in Denver, which is handling the FBI case, declined comment, citing the ongoing investigation.