.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 apermit 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 bythis department. Wequote from your request as follows:

“I amenclosing letter received from

. . . asking the procedure to be employed for securing acharter Sromthe Board of Insurance Commissioners for aburial association and allow them to furnish merchandise consisting of atombstone, 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 25of Senate Bill 

### 135,Hcts of the Forty-sixth Legislature of Texas, read as follows:

“Sec. 

### 23. Burial Association. Anyindividual, individuals, firms, co-partnerships, corporations or associations doing the business of providing burial or funeral benefits, which under any circumstances maybe payable partly or wholly in merchandise or services, not in excess of OneHundred 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 andbe 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 theBoard of Insurance Commissioners, page 2 (O-2749)

business of providing burial or funeral benefits, ~which under any circumstances maybe 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 .asbeing 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 samepaid in cash. Thepolicy shall showyin 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 regulations to carry out the purposes o,fthis Acts.” 9Corpus 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 ade~ceased person, sepulture, interment, act of depositing~~a dead boty in the earth, in atomb or vault,~ or in the water; the act of interrin the human dead. s
. Brady v. Presnell, 169 S.E. 278, 20, 204 N.C. 659.”

as 1111;s ”

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

“Funeral.. The disposition of human bodies after death, with the accompanying rites and ceremonies.* 1Joyce on Insurance 7c defines burial insurance as “a contract based upon alegal consideration whereby’the obliger undertakes to furnish the obligee, or one of thenlatter’s near relatives,, at death, aburial reasonably worth a~fixed -.sum.ll Also see the cases ofSisson, 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 ~107N.,E. 758.

, Burial associat,ions are associations which provide for the burial of its members. See the case of,State exrel ColemanBoard of Insurance Commissioners, page 3 (O-2749)

vs. Wichita Mutual Burial Association, 73Kansas 179, 84Pacific 7579We GlobesCasket 978, and 979 quote from the case of State exrel Fishback vs.

and Unde’rtaking Company, 54L.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 ~offuneral direct or.t The other is similar in form, with the exception that it does not namethe value of the furnishings, and provides that the corporation will take charge of the funeral of the holder ‘on the surrender of this receipt,’ 2ndwill 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. 73Kan. 179, 84 Pac. 757, the organization in question wasone estensibly to secure to the members th,ereof adecent burial. The expenses were defrayed by assessments levied upon the members. Twoclasses of certificates were issued,. one entitling members to afuneral worth $100, and the other afuneral worth $50, accordingl,y as they paid the greater or lesser assessment. It was organized by anundertaker, 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: ‘Weconclude 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 ‘toeach 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 whoare relieved from paying the funeral expenses of the deceased member “beneficitiries,lT this association, both in general plan and phraseology, would be asubstan-

‘tial duplicate of the. ordinary mutual insurance company.Board of Insurance Commissioners, page 4 (O-2749)

The fact that nobeneficiary is specifically named deserves little consideration, since in reality one exists, and maybe ascertained with as much certainty as if directly and specifically mentioned. Whoever would otherwise pay the burial expenses of the deceased member is, bybeing 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, whowould otherwise have to furnish the expenses of his burial, will be benefited bybeing relieved of that burden.’ “Tothe same effect is the case of-State v. Wlllett, 

### 171Ind. 

### 296,23L.R.4. (N.S.) 

### 197,86N.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 asystem of mutual contribution, to each member of the association, at death, the specific benefit of 

### $75for application to his burial service. This was indemnity or security, the life of the member, that, at the cessation of acertain sumof money would be payable by the association for his burial, whether the deceased had paid one assessment or athousand. The controlling elements of the contract, as interpreted bythe by-laws, are in all material respects similar to those of anordinary mutual life insurance company , . . It is simply abusiness enterprise in which the contract holder is promised adefinite thing in consideration of his performance of adefinite undertaking onhis part.

. . .I1 Section 24of Senate Bill 

### 135of 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 beScheduled in he **~olicv** or certificatg and aonroved bv the Bar

o 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 samepaid in cash.” The statute also provides that the policy shall showthe 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.

Wehave been informed by the Board of Insurance Commissioners that they have aproved many policies of burial insurance as outlined by Section 2f: supra, providing for certain stipulated items of burial and funeril merchandise and services. TheBoardBoard of Insurance Commissioners, page 5 (O-2749)

furnished us with acopy of acertificate or policy of aburial 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~ieres,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 ofHearse Service to any point within aradius 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 arespectable burial for adeceased person. It is our opinion that aburial association which does not pay its benefits in cash must furnish such merchandise and services as would provide arespectable burial for its deceased member. Weare 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, wedonot think an association which agreed to furnish acasket alone, or a shroud alone, or clothing for the deceased alone, or hearse service alone, or embalming service alone, for aregular premium, would be aburial association and should not be granted acharter or licemse as aburial association.Board of.Insurance Commissioners, page 6 (O-2749)

Tombstones or monuments are erected at the grave of adeceased 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 atombstone or monument is nopart of aburial. However, our courts in Texas have frequently allowed as funeral expenses in the settlement of adecedent’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 aburial association and should not be aranted apermit as such. Very truly yours ATTORNEY

GENERAL

OFTEXAS

. /s/ ByWm.J, Fanning Sm.J. Fanning, Assistant

. APPROVED

OCT16, 1940 Is/ Grover Sellers FIRST ASSISTANTATTORNEY GENERAL APPROVED:OPiNIOECOMMITTEE BY: BWB,CHAIFLMAN~. WJF:ew:wb