What happens if the balance of the Preneed Recovery Fund exceeds $2 million?

When the balance of the Preneed Recovery Fund exceeds $2 million, the fee per contract is reduced by 50%. This reduction serves as an incentive and relief mechanism for preneed funeral contract providers, acknowledging that the fund is in a financially stable position. The purpose of the Preneed Recovery Fund is to ensure consumer protection in the event that a funeral home cannot fulfill its preneed agreements, so maintaining a healthy balance in the fund allows for a reduction in costs while still covering necessary claims.

The existing fee structure is thus adjusted to reflect the surplus in the fund, allowing funeral providers to operate with less financial burden as long as the fund remains above the specified threshold. This strategic adjustment is important in maintaining a balance between consumer protection and the financial viability of funeral homes offering preneed contracts.