.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   tomb-
       Gentlemen8                                     stones  as merchandise?
                    Your request   for an opinion              has been    received  and care-
       fully   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    con-
              sisting     of a tombstone,      in an amount not to exceed
              $1.50.00.
                      “Please   check Senate Bill        135, &cts of the Forty-
              Sixty 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 asso-
              ciation     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,        in-
              dividuals,      firms,     co-partnerships,        corporations       or asso-
              ciations      doing the business          of providing     burial     or fun-
              eral benefits,        which under any circumstances               may be pay-
              able 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 pro-
              visions     of Chapter 2’74, Acts of the Forty-first                  Legisla-
              ture,    1929, and amendments thereto;               and shall     operate     un-
              der and be governed by Chapter 274, ,acts of the Forty-
              first    Legislature,       1929, and amendments thereto,              -and this
              act,     It shall     be unlawful       for any individual,         indivld-
              uals,    firms,    co-partnerships,         corporations,       or associa-
              tions,     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 bur-
        ial 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 pol-
        icy, 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 here-
        by authorized    to promulgate reasonable     rules  and regula-
        t 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 in-
          terrin      the human dead. s . Brady v. Presnell,        169                      S.E.
          278, 2 0, 204 N.C. 659.”
                 27 Corpus    Juris,    ‘Page 929,       defines      the, term       “funeral”
as 1111;s        :”
                 “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    un-
dertakes   to furnish     the obligee,         or one of then latter’s      near rela-
tives,,  at death,    a burial      reasonably      worth a~ fixed -.sum.ll Also
see the cases of Sisson,          et al.;      vs. Prata Undertaking      Company,
141’ A. 76; State ex rel Fishback              VS. 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 Pa-
cific 7579
            We quote from the case of State ex rel Fishback                                  vs.
Globes Casket and Unde’rtaking Company, 54 L.R.A.N.S.  pages                                 977,
978, and 979 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 pro-
        vide 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 out-
        side 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 sur-
        render     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 con-
          trol     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   cer-
          tificates       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 cer-
          tificate       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 de-
        serves    little     consideration,       since in reality       one exists,
        and may be ascertained            with as much certainty         as if di-
        rectly    and specifically          mentioned.     Whoever would other-
        wise 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 bene-
        fited   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 se-
        cure 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,       that,    at the cessation        of
        the life    of the member, 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 con-
        trolling    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 per-
        formance    of a definite      undertaking         on his part.      . . .I1
              Section      24 of Senate Bill 135 of the Forty-sixth‘Legis-
lature    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 serv-
ices provided        for in the policy         that the association          then must
pay the benefits         in cash.
             We have been informed      by the Board of Insurance      Commis-
sioners   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     merchan-
dise and servi,ce    are as follows:
                                        “BENEFITS
                                        .~, ~...
                “The funeral    service     and merchandise               covered     un-
        der   this policy    shall    consist    as follows:
               1. Casket and substantial      outside     box, casket
        to be octagon   end, oval top hinged cap, made of cy-
        press, 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’  Bouton-
        n~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 ra-
        dius 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 fun-
eral 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     serv-
ice alone,     or embalming service         alone,     for a regular       premium,
would be a burial      association       and should not be granted             a char-
ter 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 de-
ceased 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 set-
tlement  of a decedent’s          estate   expenses   for the erection    of
monuments and tombstones,            dependent    upon the condition    of de-
cedent’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
                                         ATTORNEYGENERALOF TEXAS
                                                                     .
                                 /s/     By Wm. J, Fanning
                                         Sm. J. Fanning,   Assistant
                                                   .
APPROVEDOCT 16, 1940
Is/ Grover Sellers
FIRST ASSISTANT ATTORNEYGENERAL
APPROVED: OPiNIOE COMMITTEE
BY:       BWB, CHAIFLMAN ~.
WJF:ew:wb
