Alabama Administrative Code › Title 395 - ALABAMA BOARD OF FUNERAL SERVICE › Chapter 395-X-11 - PRENEED CONTRACT FUNDING AND TRUSTS › Section 395-X-11-.09 - Endowment Care Fund

Current through Register Vol. 42, No. 9, June 28, 2024
(1) Each
			 endowment care cemetery must establish and maintain an irrevocable trust known
			 as an endowment care fund irrespective of whether the cemetery authority holds
			 a certificate of authority to sell preneed contracts. Each cemetery authority
			 that operated an endowment care cemetery and sold interment rights on or after
			 the effective date of the Act (May 1, 2002) and had an existing fund or trust
			 for endowment care shall transfer the assets of such fund or trust into an
			 endowment care fund to be administered according to the Act and this
			 Chapter.
(2) The endowment care
			 fund shall be placed with and held by a bank, trust company, savings and loan
			 association, or other financial institution authorized to provide trust
			 services under the provisions of Alabama Code or under the applicable laws of
			 the United States or any other state, or a board of trustees. The endowment
			 care fund trust agreement must be filed with and approved by the
			 Board.
(3) If used, a board of
			 trustees shall consist of at least three members, who shall each reside in
			 Alabama and at least one of whom is engaged in outside cemetery management.
			 Each such member shall be bonded to honestly perform the duties of trustee
			 under the trust agreement as approved by the Board. Effective July 1, 2014, a
			 person serving on a board of trustees for cemetery authority may not also serve
			 as a trustee of an endowment care fund for the cemetery authority.
(4) A board of trustees in existence as of
			 July 1, 2014, may thereafter continue to serve as the trustee of an endowment
			 care fund if, unless exempted by the Board as provided in paragraph (5), each
			 member of the board of trustees shall furnish a bond in the amount of $100,000
			 or the amount in each endowment care fund for which the board acts as trustee
			 as of December 31, 2014, whichever amount is greater. The amount of the bonds
			 shall be increased on January 1 of each succeeding year to equal the amount in
			 each endowment care fund as of the immediately preceding December 31. The bond,
			 its form, and amount must be approved by the Board prior to use and written
			 through an insurance company authorized to transact surety insurance in
			 Alabama.
(5) The Board shall exempt
			 a board of trustees from a bond requirement in paragraph (4) if the board of
			 trustees provides to the Board an annual audit that satisfies all the
			 following:
(a) The report is prepared by a
			 certified public accountant authorized to practice in Alabama.
(b) The report evidences that the review made
			 subject of the report by the accountant encompasses each endowment care fund
			 for which the board acts as trustee.
(c) The report notes relating to the
			 endowment care fund or funds are in a form that is reasonably acceptable to the
			 Board.
(d) The report does not
			 evidence any material violation of or noncompliance relating to an endowment
			 care fund.