Arkansas Administrative Code
Agency 024 - Burial Association Board
Rule 024.00.97-001 - Adopted Rule: #35) Assumption of Burial Associations by Insurance Companies. #46) Penalty Rule

a) A notarized copy of the minutes of the meeting at which the assumption was approved.

b) A copy of the Public notice announcing the meeting to discuss the assumption.

c) A notarized copy of the letter which will be sent to all of the association policy holders stating the date, time and place of the public meeting, as well as the particulars of the assumption.

a) The insurer must be a legal reserve or stipulated premium insurance company, actively engaged in business in the State of Arkansas, for at least two (2) years.

b) The assuming insurance company must conduct an independent actuarial study to determine the amount of money that is needed to reserve the policies of the Burial Association being assumed. This study is subject to Board approval.

c) The face amount of the policy issued by the insurance company, in lieu of the membership certificate, shall be in the same amount and at the same premium rate as the membership certificate.

d) The assuming insurance company must state in its Assumption agreement, that all claims, in behalf of a policyholder, will be paid in cash and in an amount not less than 100% of the face amount of the benefit that the member was entitled to under the certificate of membership in the burial association.

e) The owner of the policy shall have the exclusive right to name the beneficiary of his choice, and may change said beneficiary at his option in writing.

f) The insurance provider shall not require the policyholder to select either services or merchandise from a particular provider of such services or merchandise in order that 100% of the face amount of the policy, issued in lieu of membership certificates, be payable.

g) The funds in the mortuary reserve fund will be disbursed as follows:

h) All holders of membership certificates in a burial association shall be assumed by the insurance company, in the same amount and at the same premium rate as under the membership certificate, without being required to submit proof of insurability.

a) Petition for Assumption

b) The Plan of Liquidation

c) The Assumption Agreement

d) The Assumption Notice

Upon receipt of the documents from both the burial association and the assuming insurance company, the Executive Secretary shall review the documents submitted for compliance with this rule, Additionally, copies shall be submitted to the Arkansas Insurance Department for comment regarding the petitioners compliance with the Insurance Departments regulations. The Secretary shall provide each Board member with copies of the documents at the next regularly scheduled Board meeting. The Board will then table the petition and take the matter under advisement for consideration at its next regularly scheduled meeting.

a) The effective date of the planned liquidation.

b) The transfer of the rights held under the membership certificate to the insurance company and that the burial association shall have no liabilities as of the effective date of the liquidation.

c) A plan to transfer the assets of the association as provided for in 35.2 g.

d) The date of the closing of the burial association.

e) A statement that the insurance company accepts cession of the Burial association membership certificates and that it assumes all liabilities of the membership certificates, together with all debts and obligations of the association being assumed, and further that the liabilities, debts and obligations of the association shall not be greater then the association had prior to the assumption, except that there shall be no less than 100% of the face amount of the policy payable, in cash.

f) That policies shall be issued by the insurance company stating the name of the insurance company, the names of the insured, the amount of the coverage for each individual and the premium rates for each individual covered by the policy.

a) That the benefits formerly contemplated under the membership certificates are now payable through the insurance company and that such benefits are payable in cash only.

b) That the insurance company shall have the right to assume those assets of the burial association as provided for in 35.2g, in exchange for the liabilities of the association..

c) That if the holder of a membership certificate in a burial association does not desire to be assumed by the insurance company" wishes to opt out", he may, within 60 days, return the Assumption Notice and request his "opt" out pro rata share of the associations reserves as computed and certified by the assuming insurance company. Continued payment of premiums constitutes acceptance of the assumption.

d) That the coverage provided through the insurance company shall be in the same amount and at the same premium rate as that held under the certificate of membership in the association.

e) That those responsible for making funeral arrangements for the deceased policyholder shall have the freedom to choose a funeral home or other funeral service and or merchandise provider of their choice, and further that such choice shall not diminish the face amount of the policy of such.

a) Effective date of the Assumption.

b) Information regarding the assumption including:

c) Information regarding the opting out provisions, including: