The state has levied a $1.2 million fine against a company that offered prepaid cremation services, settling claims that the company inflated charges for funeral expenses at the time of use so it could reduce the up-front price.

By law, 75 percent of the price for preneed funeral services, including cremation, must be placed in trust until the services are used. A state investigation of the Neptune Society, which does business in 10 states and has its Colorado office in Arvada, found that the company did not place the required minimum in trust.

State Insurance Commissioner Marcy Morrison said half the fine will be waived if Neptune deposits $1.5 million into its trust accounts to bring them into compliance.

Heather Krasnow, a Neptune Society spokeswoman, promised “the company’s full cooperation.”

The Colorado Division of Insurance, which announced the settlement last week, said Neptune has more than 7,000 preneed funeral contracts in the state.

Holders of such contracts are entitled to a refund of the money placed in trust if they decide not to use Neptune’s services, which displeased Costas Rombocos, who filed the paperwork that prompted the state probe.

“The first thing that the insurance commissioner should have fought for and enforced is that the consumer has the right to cancel their contracts, get their money back 100 percent and go elsewhere if they so desire,” said Rombocos, director of the Shrine of Remembrance funeral home in Colorado Springs.

“We think we drove a very hard bargain,” said Morrison, a former Manitou Springs mayor.—Contact the writer at 476-1654

Lunch at Plate World Cuisine. Photo by Gazette File Photo