Current through Register Vol. 49, No. 9, September, 2024
SECTION
1. PURPOSE
The purpose of this Rule is to define funeral expense insurance
as required by Ark. Code Ann. §
23-64-206(g)
(8), and to set out the general requirements
that must be met in selling this form of life insurance.
SECTION 2. AUTHORITY
This Rule is promulgated pursuant to the Commissioner's authority
under Ark. Code Ann. §
23-61-108, and
§
23-63-106,
§
23-64-206
and §§
25-15-201, et
seq.
SECTION 3. DEFINITIONS
A. Funeral Expense Insurance
Funeral expense insurance is that form of life insurance as
defined in Ark. Code Ann. §
23-62-102 which
provides benefits for expenses incurred in connection with the death of the
insured and which does not exceed $7,500; and which term includes deferred
annuities which do not exceed total premiums of $7,500 for the same purposes,
excluding variable annuities.
B. Insurer
Insurer as used in this Rule is any authorized life insurer,
fraternal benefit society, stipulated premium insurer or mutual assessment life
insurer.
SECTION
4. GENERAL REQUIREMENTS
A. No
insurer doing business in this State shall write life insurance wherein the
proceeds of the policy after death are payable other than in cash. No insurer
doing business in this State shall write a policy which shall in any way,
directly or indirectly, undertake to limit the freedom of choice of the family
of the deceased insured or whoever is the proper person having charge of the
body of the deceased insured, in the selection of the funeral home, cemetery or
monument company to render either goods or services on behalf of the deceased
insured.
B. All funeral expenses
contracts must state either in the policy or in a separate endorsement that the
policy does not constitute a prepaid funeral contract as referenced in Ark.
Code Ann. §
23-40-101
to §
23-40-118.
C. No insurer doing business in this State
shall in any way, either in a policy itself or by simultaneous or subsequent
execution of power of attorney or assignment or by any other means whatsoever,
limit the payment of its death benefits to goods, services or merchandise
furnished by any funeral home, cemetery company or monument company.
D. An insurer may make payment to the
executor or administrator of the insured, or to any of the insured's relatives
by blood or legal adoption or connection by marriage, or to any person
appearing to the insurer to be equitably entitled thereto by reason of having
been named beneficiary, or by reason of having incurred expenses for the
maintenance, medical attention or burial of the insured. "Person" as used in
this section shall include a funeral provider.
E. In the event that an insurer desires to
reinsure burial association policies, the certificate of assumption must amend
the assumed policy to conform with the requirements of this
Regulation.
F. Ark. Code Ann.
§§
23-74-401 to
§
23-74-405
(Repl. 1992), relating to fraternal benefit societies, shall be interpreted to
require the payment in cash of the proceeds of such policies, without in any
way limiting or restricting those in charge of the body of the deceased insured
in the selection of a funeral home, a cemetery company or a monument
company.
G. Ark. Code Ann. §
23-71-111
shall be interpreted to require the payment in cash of the proceeds of any
policy issued by a stipulated premium insurer, without in any way limiting or
restricting those in charge of the body of the deceased insured in the
selection of a funeral home, a cemetery company or a monument
company.
H. Every funeral expense
policy or certificate shall be filed for approval with the Insurance
Commissioner for the State of Arkansas pursuant to Ark. Code Ann. §
23-79-109.
I. Nothing herein shall be construed to
prohibit the utilization of insurance contracts as funding vehicles for prepaid
funeral contracts referred to in Ark. Code Ann. §§
23-40-101
to
23-40-118.
SECTION 5. EFFECTIVE DATE
The effective date of this Rule is October 1, 1993.
SECTION 6. SEVERABILITY
Any section or provision of this Rule held by a court to be
invalid or unconstitutional will not affect the validity of any other section
or provision of this Rule.
