The Illinois Department of Insurance (DOI) is distributing $18 million from a settlement reached with an insurance agency to Illinois funeral directors in trust for affected client-families.
Distribution of the $18 million brings closure to the nearly two-year effort by the department and other state agencies to protect the more than 47,000 Illinois families who purchased “pre-need” contracts through IFDA-member funeral homes to pay for funeral or burial services.
The department secured the $18 million from Merrill Lynch Life Insurance Agency Inc. (MLLA) in May 2009, as a result of an investigation into MLLA’s role in pre-need funeral arrangements managed by the IFDA.
Previous separtment efforts to distribute the funds were delayed by a lawsuit (Dames et al. v. Hynes et al.) filed in Cook County by several funeral home directors. The $18 million was made available for distribution after the plaintiff funeral directors voluntarily dismissed the lawsuit.
Also in connection with this matter, in September 2009 the department revoked the license of Edward L. Schainker, an insurance agent, and fined him $100,000 for his role in developing, marketing, and selling an insurance scheme to the IFDA that the department alleged did not serve the interests of the funeral directors, their client-families, and did not comply with the Illinois Insurance Code.
Source: Illinois Department of Insurance