Funeral home agrees to cede 1 more license

Prepaid-benefits contracts in limbo after service closed

The Jacksonville funeral home shut down in January over charges it violated state regulations regarding the storage of bodies voluntarily surrendered its prepaid funeral-benefits contracts license on Tuesday.

The consent order issued by Insurance Commissioner Allen Kerr and agreed upon by Arkansas Funeral Care’s founder and funeral director, LeRoy Wood, also voluntarily waives the funeral home’s right to a hearing to consider permanently revoking its license, meaning today’s scheduled hearing at the state Insurance Department has been canceled.

The license surrender is pending the approval by the department of a transfer-of-ownership plan by Arkansas Funeral Care within 30 days. The funeral home’s license is only active during this time for the “purpose of transferring ownership of its prepaid funeral benefits contracts,” according to the order.

“We’re hoping that the next step will be for the previous owner to be able to sell this business to another, more reputable funeral home or funeral home group,” Kerr

said. “That way, they can pick up the whole block of business and continue on, and we won’t have to farm all those policies out to other funeral homes individually.

“As far as the public and the people involved are concerned, that would be the absolute best scenario, for somebody to do their due diligence and once all that is done, transfer that ownership to another entity.”

The department’s Prepaid Funeral Division is acting as custodian of the prepaid contracts held by the funeral home, which voluntarily surrendered its operating license at a Jan. 23 meeting with the state Board of Embalmers and Funeral Directors. The move came after mid-January inspections at the business found several violations regarding the storage of bodies.

Wood also surrendered his funeral director’s license during the January meeting, along with the funeral home’s crematory license. The surrender of the licenses effectively closed the facility, which opened in 2006. Wood and the funeral home also were fined a total of $10,000.

According to the order, state law says a “licensed prepaid funeral benefits organization is required to maintain an active license in good standing with the [state] board.”

Alice Jones, a spokesman for the Insurance Department, said Arkansas Funeral Care held approximately 1,800 prepaid funeral-benefits contracts.

Kerr said that if Arkansas Funeral Care is not able to find a buyer, the department would switch to “Plan B,” a process Kerr said would involve contacting “as many of the funeral homes in the area or in Arkansas who might want to pick up as many of these contracts as possible.”

People with prepaid funeral-benefits contracts with Arkansas Funeral Care could still transfer their contracts to another funeral home either before or after any possible sale, Kerr said, but those individuals would be responsible for any increase in cost with the new contracts.

“The contracts are the contracts, and that’s what we are here for: to make sure the contracts are picked up as written,” he said.

People with annuity or insurance policies set up with premiums payable to an insurance company or third-party administrator over a period of time should continue making payments toward the policy, Kerr said.

“I want to emphasize that none of these folks should stop making payments on any of these contracts,” he said. “If they stop making payments and they happen to cancel, there’s no way we can get them reinstated.”

The department received approximately 700 calls about the funeral-benefits contracts at Arkansas Funeral Care the week after the funeral home surrendered its licenses, but the call volume has fallen to about 300 in the past week, Kerr said.

“We want Arkansans to be aware that we are doing our due diligence with these contracts and that everyone who has one should not see their money disappear or anything along those lines,” he said. “They are in good control and good hands, and we’re going to make sure that their very best interests are served.”

The licenses of the funeral home and Wood had been suspended by the board at an emergency hearing Jan. 21 after the board reviewed a report from inspector Leslie Stokes. While investigating two complaints against Wood and the funeral home, Stokes found a cooler “filled beyond capacity with bodies,” including bodies “stacked on top of each other,” “seven bodies outside of the cooler that had not been embalmed” and one body “in an obvious state of decomposition.”

Officials with the state Crime Laboratory and the Pulaski County coroner’s office removed 31 bodies from the funeral home Jan. 21 after the suspension. Another 25 cremated remains were held by the funeral home.

Amy Goode, executive secretary of the funeral board, said Tuesday that family members of all 31 whose bodies and 25 whose cremated remains were seized have been contacted, but the board is still working with its inspector and the Pulaski County coroner’s office to ensure families have picked up the bodies and cremated remains.

Arkansas Funeral Care’s website, which is offline, stated the purpose of the company “was to offer families what they need and want, a very honorable complete funeral plan with affordable prices.”

According to the website, Arkansas Funeral Care offered a “complete church funeral plan,” which included a high-quality casket, funeral coach, embalming, and visitation and a funeral service at a church or the funeral home’s chapel, for $2,490.

Arkansas Funeral Care also offered an “immediate burial plan” for $995.

According to the National Funeral Directors Association, the national median cost of a funeral in 2012 was $7,045, “not including cemetery, monument or marker costs, crematory fees (if cremation is selected) or cash-advance items such as flowers and obituaries.”

A “complete cremation with visitation and funeral service” at Arkansas Funeral Care was $2,710, according to prices listed on the funeral home’s website. A “direct cremation plan” was offered for $575.

Three lawsuits have been filed against Arkansas Funeral Care, in circuit courts in Pulaski, Miller and Garland counties, accusing the funeral home and Wood of negligence and other charges.

A call to Wood’s attorney was not returned Tuesday afternoon.

Consumers with questions regarding the transfer of their prepaid benefits contracts from Arkansas Funeral Care to another suitable provider can contact the Insurance Department’s prepaid funeral-benefits unit at (501) 3712665.