.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 tombGentlemen8 stones as merchandise? 

Your request for an opinion has been received and carefully 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 consisting of a tombstone, in an amount not to exceed 

$1.50.00. 

“Please check Senate Bill 135, &cts of the FortySixty 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 association 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, individuals, firms, co-partnerships, corporations or associations doing the business of providing burial or funeral benefits, which under any circumstances may be payable 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 provisions of Chapter 2’74, Acts of the Forty-first Legislature, 1929, and amendments thereto; and shall operate under and be governed by Chapter 274, ,acts of the Fortyfirst Legislature, 1929, and amendments thereto, -and this 

act, It shall be unlawful for any individual, indivlduals, firms, co-partnerships, corporations, or associations, 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 burial 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 policy, 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 hereby authorized to promulgate reasonable rules and regulat 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 interrin the human dead. s . Brady v. Presnell, 169 S.E. 

278, 2 0, 204 N.C. 659.” 

as 1111;s ” 

27 Corpus Juris, ‘Page 929, defines the, term “funeral” 

: 

“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 undertakes to furnish the obligee, or one of then latter’s near relatives,, at death, a burial reasonably worth a~ fixed -.sum.ll Also 

see the cases of Sisson, et al.; vs. 

141’ A. 76; State ex rel Fishback VS. 

Prata Undertaking Company, 

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 Pacific 7579 

We 

Globes Casket 

978, and 979 

quote from the case of State ex rel Fishback vs. 

and Unde’rtaking Company, 54 L.R.A.N.S. pages 977, 

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 provide 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 outside 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 surrender 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 control 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 certificates 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 certificate 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 deserves little consideration, since in reality one exists, 

and may be ascertained with as much certainty as if directly and specifically mentioned. Whoever would otherwise 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 benefited 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 secure 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, 

the life of the member, 

that, at the cessation of 

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 controlling 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 performance of a definite undertaking on his part. . . .I1 

Section 24 of Senate Bill 135 of the Forty-sixth‘Legislature 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 services provided for in the policy that the association then must 

pay the benefits in cash. 

We have been informed by the Board of Insurance Commissioners 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 merchandise and servi,ce are as follows: 

“BENEFITS 

.~, ~... 

“The funeral service and merchandise covered under this policy shall consist as follows: 

1. Casket and substantial outside box, casket 

to be octagon end, oval top hinged cap, made of cypress, 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’ Boutonn~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 radius 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 funeral 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 service alone, or embalming service alone, for a regular premium, 

would be a burial association and should not be granted a charter 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 deceased 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 settlement of a decedent’s estate expenses for the erection of 

monuments and tombstones, dependent upon the condition of decedent’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 

ATTORNEY GENERAL OF TEXAS 

. 

/s/ By Wm. J, Fanning 

Sm. J. Fanning, Assistant 

. 

APPROVED OCT 16, 1940 

Is/ Grover Sellers 

FIRST ASSISTANT ATTORNEY GENERAL 

APPROVED: OPiNIOE COMMITTEE 

BY: BWB, CHAIFLMAN ~. 

WJF:ew:wb