.c-.
THEA-JT~RNEY GENERAL
Board of Insurance Opinion No. O-2749
Commissioners Re: Would it be permissible
inaustin, Taxas for the Insurance Department
to issue a permit under the
Attention: Mr. J. J. Timmins burial association law and allow
the association to furnish tomb-
Gentlemen8 stones as merchandise?
Your request for an opinion has been received and care-
fully considered by this department. We quote from your request
as follows:
“I am enclosing letter received from . . . asking
the procedure to be employed for securing a charter
Srom the Board of Insurance Commissioners for a burial
association and allow them to furnish merchandise con-
sisting of a tombstone, in an amount not to exceed
$1.50.00.
“Please check Senate Bill 135, &cts of the Forty-
Sixty Legislature, particular, Sections 23 and 24
thereof, and advise this Department if, in your opinion,
it would be permissible for this Department to issue a
permit under the burial association law and the asso-
ciation to furnish tombstones as the merchandise.”
Sections 23, 24, and 25 of Senate Bill 135, Hcts of the
Forty-sixth Legislature of Texas, read as follows:
“Sec. 23. Burial Association. Any individual, in-
dividuals, firms, co-partnerships, corporations or asso-
ciations doing the business of providing burial or fun-
eral benefits, which under any circumstances may be pay-
able partly or wholly in merchandise or services, not in
excess of One Hundred and Fifty ($150.00) Dollars, or the
value thereof, are hereby declared to be-burial companies,
associations or societies, and shall organize under pro-
visions of Chapter 2’74, Acts of the Forty-first Legisla-
ture, 1929, and amendments thereto; and shall operate un-
der and be governed by Chapter 274, ,acts of the Forty-
first Legislature, 1929, and amendments thereto, -and this
act, It shall be unlawful for any individual, indivld-
uals, firms, co-partnerships, corporations, or associa-
tions, other than those defined above, to engage in the
Board of Insurance Commissioners, page 2 (O-2749)
business of providing burial or funeral benefits, ~which
under any circumstances may be paid wholly or partly in
merchandise or services .I1
Vet. 24. Policies or certificates issued by bur-
ial associations shall provide for payment of the benefit
in certain stipulated merchandise and burial service,
which shall be scheduled in the policy or c,ertificate and
approved by the Board of Insurance Commissioners .as being
of the reasonable value as stated in the face of. the pol-
icy, unless the insured shall at the time said’policy is
issued elect to have same paid in cash. The policy shall
showy in writing the election made. If the association
issuing said policy shall fail or refuse to furnish the
merchandise and services provided for in the policy, same
shall be paid in cash. II
“Sec. 25. Rules and Regulations. The Board. is here-
by authorized to promulgate reasonable rules and regula-
t ions to carry out the purposes o,f this Acts.”
9 Corpus Juris, Page 1100, define,s the term “burial” as
,follows:
“Burial. The act of .interring the dead.”
Words and Phrases, Vol. 5, Permanent Edition, Page 961,
defines the term llburialll as follows:
!‘Word ‘burial1 means act of burying a de~ceased person,
sepulture, interment, act of depositing~~a dead boty in the
earth, in a tomb or vault,~ or in the water; the act of in-
terrin the human dead. s . Brady v. Presnell, 169 S.E.
278, 2 0, 204 N.C. 659.”
27 Corpus Juris, ‘Page 929, defines the, term “funeral”
as 1111;s :”
“Funeral.. The disposition of human bodies after death,
with the accompanying rites and ceremonies.*
1 Joyce on Insurance 7c defines burial insurance as “a
contract based upon a legal consideration whereby’the obliger un-
dertakes to furnish the obligee, or one of then latter’s near rela-
tives,, at death, a burial reasonably worth a~ fixed -.sum.ll Also
see the cases of Sisson, et al.; vs. Prata Undertaking Company,
141’ A. 76; State ex rel Fishback VS. Globe;Casket and Undertaking
Company, 143 P.,,878; Renschler VS. State ~107 N.,E. 758.
,
Burial associat,ions are associations which provide for
the burial of its members. See the case of, State ex rel Coleman
Board of Insurance Commissioners, page 3 (O-2749)
vs. Wichita Mutual Burial Association, 73 Kansas 179, 84 Pa-
cific 7579
We quote from the case of State ex rel Fishback vs.
Globes Casket and Unde’rtaking Company, 54 L.R.A.N.S. pages 977,
978, and 979 as follows:
I,
. . . These certificates are in two forms. In the
one the corporation agrees, on the death of the holder,
( to take charge of the burial of said holder, and pro-
vide the necessary furnishing and materials therefor to
the value.of one hundreds ($100)~ dollars as follows: One
black broadcloth; white or colored plush casket; one out-
side box for. casket; one hearse two carriages; one burial
robe; necessary embalming; necessary accessories; and
services ~of funeral direct or. t The other is similar in
form, with the exception that it does not name the value
of the furnishings, and provides that the corporation
will take charge of the funeral of the holder ‘on the sur-
render of this receipt,’ 2nd will furnish the hearse and
two carriages in places~only where they are obtainable.
“That contracts of the nature of the contract here
in question are ,insurance contracts, and subject to con-
trol under the insurance statutes, is the general trend
of ,authority. In State, ex rel. Coleman v. Wichita Mut.
Burial iisso. 73 Kan. 179, 84 Pac. 757, the organization
in question was one estensibly to secure to the members
th,ereof a decent burial. The expenses were defrayed by
assessments levied upon the members. Two classes of cer-
tificates were issued,. one entitling members to a funeral
worth $100, and the other a funeral worth $50, accordingl,y
as they paid the greater or lesser assessment. It was
organized by an undertaker, through whom alone burials
could be had. The court held the association an insurance
company and subject to the insurance laws of the state.
Passing upon the question, the court said: ‘We conclude
from the foregoing facts that the ‘business designed to be
transacted under the’ plan of the ‘d\richita Mutual Burial
Association ,is, plain,, ordinary insurance e Membership in
this association insures ‘to each member above ten years
of age that which is equivalent to $100 cash, payable at
the death of such member to whomsoever would otherwise
defray the ~burial expense,s of such decedent. If the cer-
tificate of membership issued by this burial association
be designated a “policy,” the assessment a “premium,” and
those who are relieved from paying the funeral expenses
of the deceased member “beneficitiries,lT this association,
both in general plan and phraseology, would be a substan-
‘tial duplicate of the. ordinary mutual insurance company.
Board of Insurance Commissioners, page 4 (O-2749)
The fact that no beneficiary is specifically named de-
serves little consideration, since in reality one exists,
and may be ascertained with as much certainty as if di-
rectly and specifically mentioned. Whoever would other-
wise pay the burial expenses of the deceased member is,
by being relieved of that burden, as directly benefited
to the amount of such expenses as if the cash were paid
immediately to such person. If the deceased member leave
an estate, the whole thereof, undiminished by the burial
expenses, which would otherwise be paid therefrom, will
be received by his heirs. If he leave no estate, then
his Immediate relatives and friends, who would otherwise
have to furnish the expenses of his burial, will be bene-
fited by being relieved of that burden.’
“To the same effect is the case of-State v. Wlllett,
171 Ind. 296, 23 L.R.4. (N.S.) 197, 86 N.E. 68, in which
the court used the following language: ‘The contract was
issued by an association whose declared object was to se-
cure or make certain, by a system of mutual contribution,
to each member of the association, at death, the specific
benefit of $75 for application to his burial service.
This was indemnity or security, that, at the cessation of
the life of the member, a certain sum of money would be
payable by the association for his burial, whether the
deceased had paid one assessment or a thousand. The con-
trolling elements of the contract, as interpreted by the
by-laws, are in all material respects similar to those of
an ordinary mutual life insurance company , . . It is
simply a business enterprise in which the contract holder
is promised a definite thing in consideration of his per-
formance of a definite undertaking on his part. . . .I1
Section 24 of Senate Bill 135 of the Forty-sixth‘Legis-
lature of Texas, supra, provides that llpolicies -or certificates
issued by burial associations shall provide for payment of the
benefit in certain stiaulated merchandise and burial service,
which shall be Scheduled in he ~olicv or certificatg and
aonroved bv the B o ar f r as being of the
reasonable value as stated in the face of the policy, unless the
insured shall at the time said policy is issued elect to have
same paid in cash.” The statute also provides that the policy
shall show the election made, and provides that if the burial
association fails or refused to furnish the merchandise and serv-
ices provided for in the policy that the association then must
pay the benefits in cash.
We have been informed by the Board of Insurance Commis-
sioners that they have a proved many policies of burial insurance
as outlined by Section 2 f: supra, providing for certain stipulated
items of burial and funeril merchandise and services. The Board
Board of Insurance Commissioners, page 5 (O-2749)
furnished us with a copy of a certificate or policy of a burial
association which contains benefits usually listed by burial
associations and approved by the Board. Such stipulated merchan-
dise and servi,ce are as follows:
“BENEFITS
.~, ~...
“The funeral service and merchandise covered un-
der this policy shall consist as follows:
1. Casket and substantial outside box, casket
to be octagon end, oval top hinged cap, made of cy-
press, wood, covered with crepe, lined with silk,
trimmed with full length extension handles.
2. Care and Preparation of the remains.
3. Burial Garment, either suit or dress.
4. Door Badge Casket Veil, Pallbearers’ Bouton-
n~iere s , Press Notice;, Use of Funeral Chapel if desired,
or services conducted in home or church if preferred,
and Memorial Record Book.
5. Cemetery and Funeral Equipment. The above does
not include cemetery fees and expenses.
6. Transportation of flowers, metal grave markers,
and floral acknowledgment cards.
7. Use of Hearse Service to any point within a ra-
dius of seventy-five (75) miles of Austin, Texas, this
service to include transferring remains from the home,
hospital, or point of death to the Funeral Home; return to
the home, to the Church or Chapel and to the cemetery.”
The above listed items of burial merchandise and fun-
eral services would provide a respectable burial for a deceased
person. It is our opinion that a burial association which does
not pay its benefits in cash must furnish such merchandise and
services as would provide a respectable burial for its deceased
member.
We are also of the opinion that the various items of
burial merchandise and funeral services are not separately a
proper item of burial insurance, that is to say, we do not think
an association which agreed to furnish a casket alone, or a
shroud alone, or clothing for the deceased alone, or hearse serv-
ice alone, or embalming service alone, for a regular premium,
would be a burial association and should not be granted a char-
ter or licemse as a burial association.
Board of.Insurance Commissioners, page 6 (O-2749)
Tombstones or monuments are erected at the grave
of a deceased person for the purpose of marking his grave,
and for the purpose of perpetuating the memory of said de-
ceased person. Strictly speaking, the erection of a tombstone
or monument is no part of a burial. However, our courts in
Texas have frequently allowed as funeral expenses in the set-
tlement of a decedent’s estate expenses for the erection of
monuments and tombstones, dependent upon the condition of de-
cedent’s estate.
It is our opinion that the association you describe
in your letter which pays its benefits in tombstones alone is
not a burial association and should not be aranted a permit
as such.
Very truly yours
ATTORNEYGENERALOF TEXAS
.
/s/ By Wm. J, Fanning
Sm. J. Fanning, Assistant
.
APPROVEDOCT 16, 1940
Is/ Grover Sellers
FIRST ASSISTANT ATTORNEYGENERAL
APPROVED: OPiNIOE COMMITTEE
BY: BWB, CHAIFLMAN ~.
WJF:ew:wb