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Description |
The first mutual burial associations in North Carolina were formed primarily by undertakers for the purpose of providing a decent funeral for subscribers at a reasonable cost. Although these associations proliferated during the early twentieth century, they were not subject to outside regulation until the 1930s. In its first effort to bring burial associations under state control, the 1931 General Assembly established a single requirement--that if the benefits contracted for were over one hundred dollars, such benefits must be paid in legal currency or coin, not in merchandise or services. In 1933 the legislature stipulated that each mutual burial association should file semi-annual operational reports with the insurance commissioner. That official was empowered to revoke licenses for certain causes, including noncompliance with the law and operation under conditions hazardous to the interests of association members. The General Assembly of 1937 placed mutual burial associations under direct supervision and control of the insurance commissioner. The law established uniform bylaws for such associations and named various practices by officials as misdemeanors subject to fine or imprisonment. Each association was required to receive from the secretary of state a charter approved by the commissioner. In 1941 the legislature repealed previous statutes and placed these associations under the newly established position of burial association commissioner, also known as burial commissioner. The purpose of this office was to regulate all burial associations within the state and protect the interests of their members. The governor appointed the burial commissioner for four years and set his salary. The commissioner was empowered to inspect without prior notice all records and bank accounts of associations and, if necessary, employ auditors or bookkeepers to bring accounts up to date. Under the 1941 law, each mutual burial association was provided with a uniform set of rules and bylaws. Funeral benefits were to consist of merchandise and services only, not embalming, ambulance services, or cash. The General Assembly of 1943 extended the commissioner's responsibilities to include supervision of private cemeteries that offered perpetual care services for profit. In 1945 the commissioner was given the right to examine all extant records of any perpetual care cemetery. That legislature also authorized the commissioner, following notice and a hearing, to revoke the license of any burial association not in compliance with the laws, and to transfer memberships to an association in sound financial condition. In 1947 the legislature empowered the commissioner to hear and decide disputes over funeral benefits. In another act, each association was required to send each of its members an annual statement, or publish it in a newspaper accessible to the membership. Legislation during the decades of the 1950s and 1960s gave the commissioner supplementary powers, primarily relating to his authority to impose assessments on associations in order to cover regulatory expenses. In 1957 the commissioner's salary was made subject to approval by the Advisory Budget Commission. In 1967 the General Assembly established the North Carolina Mutual Burial Association Commission to provide more effective regulation of the state's mutual burial associations. The new body was composed of five members who served for five years, once initial staggered terms were completed. Three were elected through mail-in ballot by members of the North Carolina Funeral Directors Association from a field of nominees offered by the president and vice president of that association and the commissioner of the North Carolina Mutual Burial Association. One member was elected by mail-in ballot by members of the North Carolina Perpetual Care Cemetery Association from a field of nominees offered by the president and vice president of that association and the burial commissioner. The member appointed by the governor was required to be a citizen of the state with membership in one of the mutual burial associations. The commission was empowered to elect its own chairman, who voted only to break a tied vote. The burial commissioner served as secretary. The duties of the commission included advising the commissioner; assisting him in prosecuting those found in violation of established laws; protecting the interests of members of mutual burial associations; and adopting rules for the orderly transfer of membership and its corresponding benefits from one burial association to another. The commissioner was authorized, with the commission's approval and following a public hearing, to adopt rules and regulations to enforce all relevant laws and carry out the legislature's intent. In 1969 the General Assembly required each burial association to file with the burial commissioner an annual report of its financial condition. In a parallel action, the 1969 legislature also charged the State Banking Commission with licensing funeral homes and cemetery associations that sold pre-need burial contracts. That commission would furnish forms for such contracts to ensure that all payments would be held as trust funds in a financial institution. The licensee was required to make all books and records pertaining to the trust fund open to examination by the commission or the Banking Department. In 1971 the legislature required every burial association to make twelve assessments per year per member. The burial commissioner was authorized to order more than that number when the death loss in any association required action to protect the interests of remaining members. The Department of Commerce was established in 1971 under the Executive Organization Act. That department absorbed various regulatory offices and commissions, including the North Carolina Mutual Burial Association Commission, the office of the burial commissioner, and the State Banking Commission. These retained all previously granted statutory powers and were placed under the umbrella agency for administrative purposes. The General Assembly of 1973 repealed a requirement dating from 1941 that prohibited cash being paid as a funeral benefit. That legislature also empowered the burial commissioner, following a notice and hearing, to suspend or revoke the license of any perpetual care cemetery found in violation of established laws. In 1975 the legislature established the North Carolina Cemetery Commission and placed under it all responsibilities for the regulation of for-profit cemetery businesses. The 1975 General Assembly also abolished the position of burial commissioner and placed all mutual burial associations in the state under the supervision of the North Carolina Mutual Burial Association Commission. The commission assumed statutory powers previously conferred on the burial commissioner, and its composition remained virtually the same. A burial association administrator with powers designated by the commission would be appointed by the governor under the same terms as the former burial commissioner, although the salary would be approved by the Advisory Budget Commission. The General Assembly of 1977 granted the administrator the authority to examine all records relating to a burial association's financial condition, including those maintained by other state-regulated entities, such as savings institutions. The administrator was further authorized to freeze association funds, if necessary for members' protection. In 1979 the legislature established the Mutual Burial Association Study Commission and charged it with proposing ways to strengthen these associations financially through appropriate legislation. The General Assembly of 1981 authorized all burial associations to offer to members in good standing cash funeral benefits in excess of the legal limit of two hundred dollars, although such coverage would be subject to the state's insurance laws. Policies including benefits for two hundred dollars or less, would continue to be the responsibility of the administrator of the Mutual Burial Association Commission. That legislature also permitted out-of-state mutual burial associations and insurance companies to consolidate with or purchase the assets of an in-state mutual burial association, provided those entities complied with state laws. In 1991 the General Assembly granted the administrator of the Mutual Burial Association Commission the authority to liquidate an association with inadequate funds and transfer all members in good standing to a similar association or organization. The 1989 legislature changed the name of the commission's umbrella agency, the Department of Commerce, to the Department of Economic and Community Development. In 1992 it was renamed the Department of Commerce, effective 1 January 1993. REFERENCES: P.L., 1931, c. 71. P.L., 1933, c. 222. P.L., 1937, c. 237. P.L., 1941, c. 130. S.L., 1943, cc. 60, 272, 644. S.L., 1945, cc. 125, 351. S.L., 1947, c. 100. S.L., 1949, c. 201. S.L., 1951, c. 901. S.L., 1953, c. 1201. S.L., 1955, cc. 258, 259. S.L., 1957, cc. 541, s. 4; 820. S.L., 1967, cc. 985, 1197. S.L., 1969, cc. 187, 1006, 1041, 1083. S.L., 1971, cc. 650; 864, s. 17(14-15); 1151. S.L., 1973, cc. 688, 732, 1147, 1476. S.L., 1975, cc. 607, 768, 837. S.L., 1977, c. 748. S.L., 1979, c. 932. S.L., 1981, c. 989. S.L., 1983, cc. 717, s. 11; 766. S.L., 1989, c. 751. S.L., 1991, cc. 62; 959; 1007, s. 39. G.S. 143B-472.3 [1992]. |
