| (i) The level of problems and risk exposure is excessive. Problems and risks are inadequately identified, measured, monitored, or controlled and require immediate action by management to preserve the soundness of the permit holder. Identified criticisms are not being addressed or resolved. (ii) Management practices and procedures are inadequate relative to the size of the permit holder and the nature and complexity of its activities. (iii) May demonstrate an unwillingness or inability to take all necessary steps to comply with applicable laws and regulations. (B) Compliance. (i) The level of compliance problems is significant. Contract administration may be notably deficient and in substantial noncompliance with governing instruments, and applicable laws. (ii) May fail to consistently adhere to sound fiduciary principles. (iii) Substantive violations exist and may remain uncorrected from previous examinations. (iv) May fail to correct violations in a timely manner. (C) Financial condition. (i) The overall financial condition of the permit holder is deficient or deteriorating in relation to the risks imposed by its size and the nature and complexity of its activities. (ii) Demonstrates insufficient financial resources available for the purpose of fulfilling the permit holder's responsibilities and obligations over the life of the prepaid funeral contracts under its control, including those currently outstanding and those reasonably anticipated to exist in the future. The permit holder's financial condition needs to be improved. (5) Rating "5" (Critically Deficient Overall Condition). Permit holders assigned a uniform risk rating of 5 exhibit performance or conditions which are critically deficient in numerous major respects. Permit holders in this group are of the greatest supervisory concern and as such, require ongoing supervisory attention. (A) Management. (i) Problems and risks are inadequately identified, measured, monitored, or controlled and now threaten the continued viability of the permit holder or the ability to perform as contracted. Incompetent or neglectful administration and inadequate resources may have contributed to existing problems. Management has not demonstrated the ability to promptly and successfully address existing and potential problems and risks. (ii) Management practices and procedures are critically deficient relative to the size of the permit holder and the nature and complexity of its activities, and may evidence a flagrant disregard for the interests of contract purchasers and beneficiaries. (iii) May demonstrate an unwillingness or inability to take all necessary steps to comply with applicable laws and regulations. (B) Compliance. (i) The level of compliance problems is critically deficient. Contract administration may be critically deficient or incompetent and there is a flagrant disregard for the terms of the governing instruments, and interests of contract beneficiaries. (ii) May frequently engage in transactions that compromise its duties and sound fiduciary principles. (iii) Numerous substantive violations exist and may be flagrant or repeated. (iv) Fails to correct violations in a timely manner. (C) Financial condition. (i) The overall financial condition of the permit holder is critically deficient in relation to the risks imposed by its size and the nature and complexity of its activities. (ii) Demonstrates insufficient financial resources available for the purpose of fulfilling the permit holder's responsibilities and obligations over the life of the prepaid funeral contracts under its control, including those currently outstanding and those reasonably anticipated to exist in the future. The continued viability of the permit holder is threatened. |
