Memorial Service Life and Lincoln Memorial Life Resource Page
September 15, 2009
Background Information | FAQs | Prevent Insurance Fraud | File an Insurance Complaint | Press Releases
Update as of 1/12/10: The Application to Authorize Handling of National Prearranged Services Inc. Contracts with No Related Insurance, Related Payments and Receivership Court Claims [Orphan Contract Application] has been filed with the court and is set for submission before the receivership Special Master, Tom Collins, on January 18, 2010. A copy of the orphan contract application has been sent to all consumers who may have an NPS, Inc., preneed contract that is not secured by a life insurance policy (an “orphan contract”). For more information related to the orphan contract application or orphan contracts, please see the information contained in the frequently asked questions below or refer to the special deputy receiver’s website, www.lincolnmemoriallife.com, for more detailed information.
Background Information
The Texas Department of Insurance (TDI) placed Lincoln Memorial Life Insurance Company (Lincoln Memorial), Memorial Service Life Insurance Company (Memorial Service), and National Prearranged Services, Inc. (NPS) into receivership for rehabilitation under Chapter 443 of the Texas Insurance Code. The Travis County District Court issued an Agreed Order Appointing Rehabilitator and Permanent Injunction ("Agreed Order") on May 14, 2008. Representatives of the Companies consented to the receivership and signed the agreed order.
On September 22, 2008, the companies were placed in liquidation via an Order Appointing Liquidator, Order Approving Liquidation Plan and Permanent Injunction (Liquidation Order) issued by the Texas Receivership Court, and the liquidation plan became effective on October 23, 2008.
TDI is providing consumers with answers to frequently asked questions and other information about the actions taken in Texas. However, more detailed information is available at www.lincolnmemoriallife.com/. Additional information for the Texas funeral home industry is available from the Texas Department of Banking.
Frequently Asked Questions
Q: What companies are involved in the receivership?
A: Lincoln Memorial Life Insurance Company ("Lincoln Memorial") is a Texas domiciled life insurance company licensed in 44 states.
Memorial Service Life Insurance Company ("Memorial Service") is a stipulated premium life insurance company licensed only in Texas.
National Prearranged Services, Inc. ("NPS") is a Missouri corporation affiliated with Memorial Service and Lincoln Memorial. NPS sold pre-need funeral contracts.
Q: Who is in charge of Lincoln, Memorial and NPS?
A: Donna J. Garrett has been appointed as the special deputy receiver (SDR) to administer all three companies. The SDR is in charge of the companies, and she and her staff are on-site at the company offices.
On May 14, 2008, Memorial, Lincoln and NPS consented to be placed in receivership by a Texas court by signing an Agreed Order for Rehabilitation. The Texas Commissioner of Insurance was named rehabilitator for the companies, and has now been named as liquidator for the companies. The liquidator has taken over all the powers of the companies' directors, officers and managers.
For more information, please review the SDR´s website at www.lincolnmemoriallife.com/.
Q: What is the effect of the order appointing liquidator, order approving liquidation plan, and permanent injunction?
A: The liquidation rrder states that the companies are insolvent, and appoints the Commissioner of Insurance as liquidator for the companies. This means that all assets of the companies will be liquidated under a plan approved by the court, and used to pay liabilities according to the priorities set out in Tex. Ins. Code § 443.301.
Under the liquidation plan, individual state guaranty associations will pay the original death benefit for life insurance policies issued by Memorial Service or Lincoln Memorial, ignoring any policy loans, assignments, conversions, and other insurance policy transactions not authorized by the consumer that may have taken place. Payment will be to the funeral home or other burial service providers when burial services are provided.
Obligations in pre-need contracts that are not funded by an insurance policy (such as cost of living or inflation growth adjustments) will not be paid under the plan because insurance guaranty associations are prevented by their laws from paying non-insurance obligations.
Q: What should I do if a funeral provider is refusing to honor a pre-need contract?
A: If a funeral provider is refusing to honor a pre-need contract, you should contact the SDR and the pre-need regulator in your state. In Texas, contact the Texas Department of Banking at (512) 475-1285 or toll-free at (877) 276-555.
Q: What is the best way to receive continuing updates or find out more information?
A: Consumers and funeral homes monitoring the situation should do so through the SDR and the appropriate regulatory entities, since information from other sources may be unreliable or inaccurate.
The SDR may be contacted by phone at 1-800-334-3851.
Inquires may also be sent by email to info@LincolnMemorialLife.com. Information and copies of relevant Texas court documents are also available on the website at www.lincolnmemoriallife.com/.
Q: What is the status of the orphan contracts in January 2010?
A: There are approximately 5,400 orphan contracts, the majority of which are paid in full. However, approximately 1,800 are currently in a paying status. All orphan contract payments made to NPS or the receivership estate since the liquidation date of September 22, 2008 have been secured in a separate bank account and are not used in the administration of the receivership estates.
Most orphan contracts are held by Missouri residents. At this time Missouri and other state insurance guaranty associations (IGAs) are reviewing orphan contracts for potential IGA coverage. To date a number of formerly orphan contracts have been afforded coverage by the Missouri and other state IGAs. The IGA’s review is an ongoing process.
Q: What is the purpose of the proposed orphan contract application?
A: The application, if approved, will:
- Provide that orphan contract holders will be deemed to have timely filed a POC in the NPS receivership estate,
- Provide that all contract payments made after liquidation date of September 22, 2008 will be deemed secured claims,
- Authorize the SDR to use the secured funds to pay funeral service providers the lesser of the contract benefits or the amount paid post liquidation upon the death of a orphan contract holder,
- Afford an orphan contract owner the option to request a return of payments made post liquidation in lieu of receiving contract benefit payments at death and apply all interest earned by the secured funds to each orphan contract on a monthly basis (contract payments will accrue interest post liquidation).
All refund requests would require review/approval by the office of the SDR and the receivership court prior to issuing a refund. Any refund approved by the SDR and court would include payments made from September 22, 2008 forward plus interest accrued thru end of the month preceding the date of refund request.
Q. How do I know if I have an orphan contract?
A: A list of all orphan contracts identified as of December 31, 2009 is posted as Exhibit A to the orphan contract application under the “Legal Docs” tab of the estate website, www.lincolnmemoriallife.com.
Q: When will the application be approved?
A: The application is set for submission to the court on January 18, 2010. There is no deadline for court approval or disapproval and no hearing date has been set by the court. You can check the estate website under the “Legal Docs” tab for updates. Updates will also be posted on the homepage or opening page of the website. If the application is approved by the receivership court all orphan contract holders will receive written notice and instructions. No action is required at this time. Do not send refund requests at this time. The SDR is not authorized to make refunds. Service provider should continue to submit claims.
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File an Insurance Complaint
Read about TDI's consumer complaints process in the Helping You With Your Insurance Complaint publication. You may also e-mail, mail, or fax your complaint along with copies of your supporting documents to
Texas Department of Insurance
Consumer Protection Program (MC 111-1A)
P.O. Box 149091
Austin, TX 78714-9091
Fax: 512-475-1771
E-mail: ConsumerProtection@tdi.state.tx.us
Press Releases
- Unauthorized E-mail Related to Receivership of Lincoln Memorial and Memorial Service Life Insurance Companies (May 28, 2009)
For more information contact:
Last updated: 12/22/2011
