003.22.24 Ark. Code R. 003
All officials of burial associations must be members of the association of which they are officers. In the event a person holds office in more than one association, he or she is required to hold membership in each association of which he or she is an officer. Total benefits which may be paid to such officer shall not exceed two thousand five hundred dollars ($2,500).
Since burial associations are non-profit mutual benefit societies, all assessments, dues, or other funds of whatever kind or character, collected or received by them over and above necessary expenses [which in no event may exceed twenty-five percent (25%) of its receipts for any given period] shall be and remain the property of tire association for use and benefit of its members only.
Necessary expenses, including but not limited to printing, stationery, postage, office supplies, clerical work, and statutory fees may be paid by the association. No organization or promotional expense may be charged and in no event may expenses for any year exceed twenty-five percent (25%) of the gross receipts of dues or assessments, interest, and non-interest investment income of the association for such year.
Burial associations shall not be entitled to utilize any portion of twenty-five percent (25%) of gross receipts of dues, assessments, interest, or non-interest investment income, when such utilization would reduce the balance of monies available in the mortuary fund to such a level that the association would be unable to pay benefits which accrue to the members of the association.
In the event the entire sum equaling such twenty-five percent (25%) is not expended as aforesaid, then the amount remaining unexpended shall be converted into the mortuary fund at the end of such year and shall not thereafter be used for expenses. Statutory fees (annual license fees) are not considered operating expenses.
Should any association have on hand, at the end of any calendar year, funds over and above its legal obligations said funds shall be retained by the association for the purpose of meeting its future losses.
No money may be borrowed from an association, nor can the association borrow money. The assets of the association may not be pledged for any purpose. The treasurer will be held accountable under his or her bond for any violation of this rule.
Associations with money on hand will be required to have a bond with an approved corporate surety, on the secretary/treasurer and any other person(s) whose authorized signature is on the associations accounts. Bonds must be made in favor of the association, in the amount of the surplus of the association, less the monies invested as authorized, by Ark. Code Ann. § 23-78-101et seq. However, the bond shall not be less than two thousand five hundred dollars ($2,500).
In the event a burial association becomes liable for taxes; such taxes may be paid from the mortuary fund. Provided, however, that should penalties be imposed by the taxing authority, such penalties shall not be paid from the mortuary fund.
All books, accounts, and records must be kept at the main office of the association and in such manner as to accurately reflect the condition of the association, subject to inspection of any member of the association or representative of the Board. Books of an association may be closed not more than 30 days prior to an assessment, and all members receiving certificates more than 30 days prior to an assessment shall be included in the assessment.
Each burial association or society licensed in this state shall file an annual report showing the actual financial condition of the association as of December 31, of each year oil forms approved and provided by the Board. In addition to the accurate December annual report, other items, or documents to be filed shall include, but are not limited to, the following:
If the report is not received in the office by March 15th and 15th of the next calendar year, then the report is delinquent and a one hundred dollar per day ($100/day) delinquent fee for a maximum period of ten (10) days will be assessed.. Should it become necessary for the Board's auditor to travel to the association to procure the report, the Board's office shall recover expenses incurred as a result of the association's failure to file the report. These expenses shall be paid by the association from the allowable operating expenses, and not from the mortuary fund.
The Board may grant an extension of time to submit a report for good cause. A burial association or society shall file a request for an extension to the Board in writing before the due date of the report.
The by-laws of burial associations may provide that the secretary/treasurer, upon being notified of the death of a member shall designate a funeral director to prepare the body for internment according to the terms of the certificate held by the member at time of death.
If at any time the contract funeral home customarily employed by the association cannot provide the service, then the secretary/treasurer shall pay the servicing funeral home which provides the service according to the member's contract in accordance with Ark. Code § 23-78-112:
Minutes of the annual meeting shall be submitted to the Board's office with the annual report. Minutes of a special meeting called to address changes in officers, rates, or other matters pertaining to the operation of a burial association shall be submitted to the office for approval within thirty (30) days. An approved copy will be returned to the association for its records.
Advertisements, either in newspapers, by radio, by circulars or by any other method, must be submitted to the Board for approval before being published.
No association shall state in its certificate, or advertise, any particular type or make of merchandise, that will be furnished by the association.
Before new applications, forms, or certificates of membership are printed, the printer's copies should be submitted to the Board's office for approval.
Applications for membership must be kept on file in the office of the association in the order in which they are received and shall show the number of the certificate. A copy of the certificate of membership shall be kept with the application. The date of increase or an addition to the membership must be noted on permanent record cards in the files of the association and a copy of the new certificate of membership shall be kept with the application. All applications for membership must be signed by the applicant, or his or her parent, or legal representative and the soliciting agent.
In addition to the requirement of Article 12 of the Board by-laws, burial associations shall complete the following applications on each prospective burial association member and shall comply with the underwriting guidelines established by the Board. (Included) Violation of any rule may result in sanctions as provided for by Ark. Code § 23-78-101et seq. and the rules promulgated pursuant to its enforcement by the Board.
Only a burial association licensed by the Board may write certificates of membership up to a maximum of two thousand five hundred dollars ($2,500). All certificates must comply with the minimum rates, reserve requirements contained in the Section 45 and the underwriting guidelines established by the Section 42.
A minimum of four assessments must be collected each year (or the sum of four assessments) as required by the minimum rates established by the Board. For those associations which operate from the collection of dues, such dues must be collected at least four times during each year as required by the minimum rates established by the Board.
The following rates are the minimum rates which may be charged by a burial association in Arkansas per quarter:
Age | $100 | $500 | $1,000 | $1,500 | $2,000 | $2,500 |
0-1 | $ 0.25 | $ 1.25 | $ 2.50 | $ 3.75 | $ 5.00 | $ 6.25 |
2 | $ 0.25 | $ 1.25 | $ 2.50 | $ 3.75 | $ 5.00 | $ 6.25 |
3 | $ 0.25 | $ 1.25 | $ 2.50 | $ 3.75 | $ 5.00 | $ 6.25 |
4 | $ 0.25 | $ 1.25 | $ 2.50 | $ 3.75 | $ 5.00 | $ 6.25 |
5 | $ 0.25 | $ 1.25 | $ 2.50 | $ 3.75 | $ 5.00 | $ 6.25 |
6 | $ 0.25 | $ 1.25 | $ 2.50 | $ 3.75 | $ 5.00 | $ 6.25 |
7 | $ 0.25 | $ 1.25 | $ 2.50 | $ 3.75 | $ 5.00 | $ 6.25 |
8 | $ 0.25 | $ 1.25 | $ 2.50 | $ 3.75 | $ 5.00 | $ 6.25 |
9 | $ 0.25 | $ 1.25 | $ 2.50 | $ 3.75 | $ 5.00 | $ 6.25 |
10 | $ 0.30 | $ 1.50 | $ 3.00 | $ 4.50 | $ 6.00 | $ 7.50 |
11 | $ 0.30 | $ 1.50 | $ 3.00 | $ 4.50 | $ 6.00 | $ 7.50 |
12 | $ 0.30 | $ 1.50 | $ 3.00 | $ 4.50 | $ 6.00 | $ 7.50 |
13 | $ 0.30 | $ 1.50 | $ 3.00 | $ 4.50 | $ 6.00 | $ 7.50 |
14 | $ 0.30 | $ 1.50 | $ 3.00 | $ 4.50 | $ 6.00 | $ 7.50 |
15 | $ 0.30 | $ 1.50 | $ 3.00 | $ 4.50 | $ 6.00 | $ 7.50 |
16 | $ 0.30 | $ 1.50 | $ 3.00 | $ 4.50 | $ 6.00 | $ 7.50 |
17 | $ 0.30 | $ 1.50 | $ 3.00 | $ 4.50 | $ 6.00 | $ 7.50 |
18 | $ 0.30 | $ 1.50 | $ 3.00 | $ 4.50 | $ 6.00 | $ 7.50 |
19 | $ 0.30 | $ 1.50 | $ 3.00 | $ 4.50 | $ 6.00 | $ 7.50 |
20 | $ 0.30 | $ 1.50 | $ 3.00 | $ 4.50 | $ 6.00 | $ 7.50 |
21 | $ 0.30 | $ 1.50 | $ 3.00 | $ 4.50 | $ 6.00 | $ 7.50 |
22 | $ 0.30 | $ 1.50 | $ 3.00 | $ 4.50 | $ 6.00 | $ 7.50 |
23 | $ 0.30 | $ 1.50 | $ 3.00 | $ 4.50 | $ 6.00 | $ 7.50 |
24 | $ 0.30 | $ 1.50 | $ 3.00 | $ 4.50 | $ 6.00 | $ 7.50 |
25 | $ 0.40 | $ 2.00 | $ 4.00 | $ 6.00 | $ 8.00 | $ 10.00 |
26 | $ 0.40 | $ 2.00 | $ 4.00 | $ 6.00 | $ 8.00 | $ 10.00 |
27 | $ 0.40 | $ 2.00 | $ 4.00 | $ 6.00 | $ 8.00 | $ 10.00 |
28 | $ 0.40 | $ 2.00 | $ 4.00 | $ 6.00 | $ 8.00 | $ 10.00 |
29 | $ 0.40 | $ 2.00 | $ 4.00 | $ 6.00 | $ 8.00 | $ 10.00 |
30 | $ 0.40 | $ 2.00 | $ 4.00 | $ 6.00 | $ 8.00 | $ 10.00 |
31 | $ 0.40 | $ 2.00 | $ 4.00 | $ 6.00 | $ 8.00 | $ 10.00 |
32 | $ 0.40 | $ 2.00 | $ 4.00 | $ 6.00 | $ 8.00 | $ 10.00 |
33 | $ 0.40 | $ 2.00 | $ 4.00 | $ 6.00 | $ 8.00 | $ 10.00 |
34 | $ 0.40 | $ 2.00 | $ 4.00 | $ 6.00 | $ 8.00 | $ 10.00 |
35 | $ 0.60 | $ 3.00 | $ 6.00 | $ 9.00 | $ 12.00 | $ 15.00 |
36 | $ 0.60 | $ 3.00 | $ 6.00 | $ 9.00 | $ 12.00 | $ 15.00 |
37 | $ 0.60 | $ 3.00 | $ 6.00 | $ 9.00 | $ 12.00 | $ 15.00 |
38 | $ 0.60 | $ 3.00 | $ 6.00 | $ 9.00 | $ 12.00 | $ 15.00 |
3$ | $ 0.60 | $ 3.00 | $ 6.00 | $ 9.00 | $ 12.00 | $ 15.00 |
40 | $ 0.60 | $ 3.00 | $ 6.00 | $ 9.00 | $ 12.00 | $ 15.00 |
41 | $ 0.60 | $ 3.00 | $ 6.00 | $ 9.00 | $ 12.00 | $ 15.00 |
42 | $ 0.60 | $ 3.00 | $ 6.00 | $ 9.00 | $ 12.00 | $ 15.00 |
43 | $ 0.60 | $ 3.00 | $ 6.00 | $ 9.00 | $ 12.00 | $ 15.00 |
44 | $ 0.60 | $ 3.00 | $ 6.00 | $ 9.00 | $ 12.00 | $ 15.00 |
45 | $ 0.80 | $ 4.00 | $ 8.00 | $ 12.00 | $ 16.00 | $ 20.00 |
46 | $ 0.80 | $ 4.00 | $ 8.00 | $ 12.00 | $ 16.00 | $ 20.00 |
47 | $ 0.80 | $ 4.00 | $ 8.00 | $ 12.00 | $ 16.00 | $ 20.00 |
48 | $ 0.80 | $ 4.00 | $ 8.00 | $ 12.00 | $ 16.00 | $ 20.00 |
49 | $ 0.80 | $ 4.00 | $ 8.00 | $ 12.00 | $ 16.00 | $ 20.00 |
50 | $ 1.00 | $ 5.00 | $ 10.00 | $ 15.00 | $ 20.00 | $ 25.00 |
51 | $ 1.00 | $ 5.00 | $ 10.00 | $ 15.00 | $ 20.00 | $ 25.00 |
52 | $ 1.00 | $ 5.00 | $ 10.00 | $ 15.00 | $ 20.00 | $ 25.00 |
53 | $ 1.00 | $ 5.00 | $ 10.00 | $ 15.00 | $ 20.00 | $ 25.00 |
54 | $ 1.00 | $ 5.00 | $ 10.00 | $ 15.00 | $ 20.00 | $ 25.00 |
55 | $ 1.25 | $ 6.25 | $ 12.50 | $ 18.75 | $ 25.00 | $ 31.25 |
56 | $ 1.25 | $ 6.25 | $ 12.50 | $ 18.75 | $ 25.00 | $ 31.25 |
57 | $ 1.25 | $ 6.25 | $ 12.50 | $ 18.75 | $ 25.00 | $ 31.25 |
58 | $ 1.25 | $ 6.25 | $ 12.50 | $ 18.75 | $ 25.00 | $ 31.25 |
59 | $ 1.40 | $ 7.00 | $ 14.00 | $ 21.00 | $ 28.00 | $ 35.00 |
60 | $ 1.50 | $ 7.50 | $ 15.00 | $ 22.50 | $ 30.00 | $ 37.50 |
61 | $ 1.60 | $ 8.00 | $ 16.00 | $ 24.00 | $ 32.00 | $ 40.00 |
62 | $ 1.70 | $ 8.50 | $ 17.00 | $ 25.50 | $ 34.00 | $ 42.50 |
63 | $ 1.80 | $ 9.00 | $ 18.00 | $ 27.00 | $ 36.00 | $ 45.00 |
64 | $ 1.90 | $ 9.50 | $ 19.00 | $ 28.50 | $ 38.00 | $ 47.50 |
65 | $ 2.05 | $ 10.25 | $ 20.50 | $ 30.75 | $ 41.00 | $ 51.25 |
66 | $ 2.15 | $ 10.75 | $ 21.50 | $ 32.25 | $ 43.00 | |
67 | $ 2.30 | $ 11.50 | $ 23.00 | $ 34.50 | $ 46.00 | |
68 | $ 2.50 | $ 12.50 | $ 25.00 | $ 37.50 | $ 50.00 | |
69 | $ 2.65 | $ 13.25 | $ 26.50 | $ 39.75 | $ 53.00 | |
70 | $ 2.75 | $ 13.75 | $ 27.50 | $ 41.25 | $ 55.00 | |
71 | $ 2.90 | $ 14.50 | $ 29.00 | |||
72 | $ 3.00 | $ 15.50 | $ 31.00 | |||
73 | $ 3.30 | $ 16.50 | $ 33.00 | |||
74 | $ 3.50 | $ 17.50 | $ 35.00 | |||
75 | $ 3.70 | $ 18.50 | $ 37.00 | |||
76 | $ 3.95 | $ 19.25 | $ 39.00 | |||
77 | S 4.20 | $ 21.00 | $ 42.00 | |||
78 | $ 4.45 | $ 22.25 | $ 44.50 | |||
79 | $ 4.75 | $ 23.75 | $ 47.50 | |||
80 | $ 5.05 | $ 25.25 | $ 50.50 | |||
81 | $ 5.40 | $ 27.00 | $ 54.00 | |||
82 | $ 5.75 | $ 28.75 | $ 57.50 | |||
83 | $ 6.15 | $ 30.75 | $ 61.50 | |||
84 | $ 6.60 | $ 33.00 | $ 66.00 | |||
85 | $ 7.15 | $ 33.75 | $ 71.50 | |||
86 | $ 7.75 | $ 38.75 | $ 77.50 | |||
87 | $ 8.50 | $ 42.50 | $ 85.00 | |||
88 | $ 9.15 | $ 45.75 | $ 91.50 | |||
89 | $ 10.00 | $ 50.00 | $ 100.00 |
Any person who is a patient or resident of a state hospital or a nursing home must have a good health statement, signed by the attending physician, attached to and made a part of the application for membership.
Persons in state hospitals or mental institutions can have their benefits increased if they get a good health statement signed by their doctor.
Any increase in benefits on present members may be written on a regular application form or on a printed form for this purpose. Such applications must be kept on file by the association, in the order in which they are received, and must show the number of the certificate and the date must be noted on the permanent record card of the association. A copy of the certificate of membership shall be kept with said application.
No member may have more than five hundred dollars ($500) in benefits for certificates issued prior to or on July 19,1987, or two thousand five hundred dollars ($2,500). for certificates issued after July 19,1987.
Each member of a burial association shall be entitled to a thirty(30)-day grace period for payment of dues or assessments. The association shall be liable for payment of benefits for any member of the association, which dies during the thirty-(30)-day grace period.
A member who has permitted his or her membership to lapse, for no longer than a period of 48 months, may be reinstated for good cause as determined by the secretary/treasurer.. In such case, the assessments or dues in arrears must be paid. Otherwise, the member shall be written at the new rate at his or her attained age.
Should a person hold a certificate with two different associations not in the same service area, the association whose contract funeral home provides the services shall be the only one required to honor its policy. The non-servicing association shall refund one hundred percent (100%) of all dues paid. Further, should any burial association knowingly solicit memberships from persons holding a certificate in another association, the soliciting association may be subject to disciplinary action by the Board.
Applications to the Board for an agent's license must be filled out, signed before a notary public by the applicant, an officer of the association, and accompanied by the statutory fee.
The agent's license, regardless of the date issued, expires January 1, but may be renewed at any time before February 1, upon written request by the association and payment of the fee. After February 1, the Board may require that a formal application be filed with an accompanying affidavit to the effect that no solicitations have been made by the applicant since his or her license expired.
Any agent who solicits members for any association upon a misrepresentation of facts may have his or her license revoked. The certificate of authority of any burial association, which shall knowingly permit or condone such conduct on the part of its agents, may also be revoked.
Any certificate shall be incontestable, except for fraud, after the same has been in force for a period of one year.
Burial associations may use the terms "premiums" and "policy" in lieu of "dues" and "certificates".
In the event the secretary/treasurer of an association shall deem it advisable to refund a member, any sum of money claimed due by such member, then such amount of the refund claim that has been credited to the mortuary fund, shall be paid from such mortuary fund and treated as a benefit paid.
If at the end of any calendar year the funds in the treasury of the association are insufficient to meet the losses, then the secretary/treasurer may cause an extra assessment to be levied. The association shall charge off the benefits owing if not paid by the following annual report and the contract funeral home shall absorb the loss. Payments owing to a servicing funeral home, other than the contract funeral home, shall have priority and paid as funds are available.
All burial associations, upon notification of address change outside the service area, shall notify in writing that policy holder of changes in benefits, if any.
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 section. Additionally, a copy of the documents shall be submitted to the Arkansas Insurance Department for review regarding the petitioners' compliance with the Department rules. The secretary shall provide the Board with a copy of the documents at least twenty (20) business days prior to the next regularly scheduled Board meeting for consideration at that meeting.
All burial association memberships written on or after July 1,1987, shall be reserved based on the actuarial table approved by the Board. Collections and interest derived from Act 443 new business must not be used in any manner to pay claims on old business. The excess revenue or mortuary fund derived from old business shall likewise not be used to pay claims on Act 443 new business.
* Those associations with revenue insufficient to pay old business claims are required to conduct a fifth assessment each year, pay the contract funeral home a maximum of 50% of face amount of each certificate and take no expenses until the revenue reaches the point that no claims are written off and the Board determines that the extra assessment, 50% settlement, and forfeiture of expenses are no longer necessary.
There is hereby established a fund to ensure the solvency of "new business," as that term is used in these rules, which shall be known as the "New Business Emergency Guaranty Fund."
Each year following the annual reporter, any association having "surplus funds" from its new business, as that term is defined in this rule, may apply to the Board for authorization to transfer all or part of those surplus funds to its old business account if that old business, according to the association's annual report, has funds insufficient to meet the reserve requirements for its membership calculated according to the reserve table contained in Section 43 of this rule. Upon receipt of such a request, the Board shall approve or disapprove same within sixty (60) days, taking into consideration other remedial measures, if any, that have been invoked by the Board.
"Surplus funds," as that term is used in this rule, means those new business funds held by an association, as reflected by its annual report, in excess of:
Neither a funeral home nor any person employed by or otherwise associated with a funeral home may subsidize a member's benefit by paying all or a portion of any assessment.
If death occurs within 24 months of the date of issue from any reason other than an accident, the claim will be reviewed by the Board. If there has been a material misrepresentation prior to date of issue of the certificate, or if the death is due to suicide, the certificate will be ruled invalid, and a refund of all dues paid will be made.
The secretary/treasurer of the burial association shall file the December annual report by March 15* of the next calendar year. All other required documents, and the annual fee are due on or before March 15* of the next calendar year. Reports and fees not received in the Board's office by the due date will be delinquent and a $100.00 per day delinquent fee, for a maximum period of ten (10) days ($1,000) will be levied. If the report is not received within ten (10) days of the due date, the Board's auditor will be sent to procure the report. The Board shall recover the fees associated pursuant to Ark. Code Ann. 23-78-120. The association cannot pay the delinquent fees or the cost to procure the report from the mortuary fund.
Each year following the annual report required by Section 10 of this rule, any association having "surplus funds" from its old business, as that term is defined in this rule, may apply to the Board for authorization to transfer all or part of those surplus funds to its new business account if that new business account, according to the association's annual report has funds insufficient to meet the reserve requirements for its membership calculated according to the reserve table contained in Section 43 of this rule. Upon receipt of such request, the Board shall approve or disapprove it within sixty (60) days, taking into consideration other remedial measures, if any, that have been invoked by the Board.
"Surplus funds," as that term is used in this rule, means those old business funds held by an association, as reflected by its annual report, in excess of the total face value of outstanding policies.
Mergers and acquisitions are allowed with Board approval. Plans are required to be submitted to the Board before twenty (20) days prior to a regular Board meeting.
Dissolutions of burial associations are allowed with Board approval after submitting plans for making the members whole. Plans are required to be submitted to the Board before twenty (20) days prior to a regular Board meeting.
This rule is effective after review and approval by the Arkansas Legislative Council, thirty (30) days after filing of the approved Rule with the Arkansas Secretary of State.
003.22.24 Ark. Code R. 003