A case of funeral fund embezzlement has sparked new standards to prevent funeral home insurance fraud in Oklahoma.

The Oklahoma Insurance Department uncovered the fraud when investigating a former Oklahoma funeral director who misused funds in the amount of $10,000 from his customers’ prepaid funeral funds.

In the state of Oklahoma, over 350 funeral homes offer prepaid funeral accounts for end-of-life ceremonies and cremations. Since these accounts are overseen by the Insurance Commission, any misappropriation or embezzlement of funds may be treated as fraud.

There are specific rules governing these accounts. According to the Oklahoma Insurance Department, all prepaid funeral trusts must be kept separate from other accounts related to the funeral home, and are to be used only for the customer who purchased the premium. The funds are placed in interest-bearing accounts, but cannot be used as funds for high-stakes investments such as stocks.

To prevent future fraud cases, the Oklahoma Insurance Department’s Anti-Fraud Division has begun inspecting funeral home accounts to ensure good faith in all cases. Currently, the Department will review 100 accounts every year, so every Oklahoma funeral home with these accounts will be inspected at least every three years.

The inspection process will include: a review of all funeral home records and account files for prepaid services; examination of bank statements, including detailed explanations of transfers and withdrawals; and current pricing sheets of all products and services offered by the funeral home. If these records are suspect, investigators will make on-site visits to the home for further inspection.

Oklahoma Insurance Department believes that these measures will greatly reduce fraud cases. By catching accounting errors early, they will spare customers million-dollar fraud cases-and closing disreputable homes means that customers can be assured peace of mind in the ones that remain.