What happens if a funeral home which sold prepaid funeral benefit contracts goes out of business or misappropriates prepaid funds?
It would depend on whether the funeral home was a licensed seller. If the funeral home held a valid permit when the prepaid funeral contracts were sold, the Department would take over the contracts and find a subsequent provider. Any shortages to the fund would be covered by the Prepaid Funeral Guaranty Fund. The purchaser would not suffer a financial loss. However, if the funeral home was an unlicensed seller, the Department will take actions in coordination with the local District Attorney to try to recover the prepaid funds through restitution. The purchaser can suffer a financial loss in this situation because the Prepaid Funeral Guaranty Fund can not be used.
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