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To Our Funeral Home Customers:
The Texas Department of Banking ("TDOB”) recently completed an audit of our Texas preneed contracts and advised us regarding the TDOB’s rules on transportation and mileage charges. In accordance with the TDOB’s instructions, we will immediately be paying strict attention to the additional mileage charges on the at-need contracts that you submit to us.
The rules as we understand them are:
• If the preneed contract contains a mileage radius for initial call, credit must be given for the radius before billing for additional mileage. For example, if the language in the contract states "initial transfer of deceased to funeral home 50 miles” and the pick-up distance was 100 miles, the additional mileage charge is for 50 miles at the rate specified in the contract or in your price list.
• If you charge for additional mileage, we will need for you to provide proof of the additional miles. This proof should be in the form of a map showing the mileage for the pickup and should be included with the at-need contract and other documentation you submit to us for payment.
• Mileage can only be charged for a one-way trip (unless stated otherwise in the contract).
• It is assumed that transportation is included in the cremation price unless otherwise stated in the contract.The TDOB also provided guidelines to follow when third party transportation providers are utilized for the initial call. We have reproduced those guidelines below:
• If initial pickup was provided by a third party within the stated radius:
o The service must be frozen.
• If initial pickup was provided by a third party outside the stated radius and:
o If the provider did not charge the family extra for the third party service:
- PN initial pickup is considered "used” and the provider can charge for the entire transportation mileage.
o If the provider charged the family for the third party service:
- Family gets credit at the time of need for amount paid for PN initial pickup, and the provider can charge for the entire transportation mileage to bring the body back.
If the mileage restriction is not shown on the preneed contract, you must provide the price list closest to the date of the preneed contract, a sample of another preneed contract written within 6 months of the date the contract at issue, or provide the current general price list.
- You must send a copy of the invoice from the third party service.
If you have any questions, please feel free to contact our claims department at (800) 422-2011 extension 4125.
Robert M. Hardy, Jr.
Executive Vice President & General Counsel