CHAPTER 888. BURIAL ASSOCIATIONS
INSURANCE CODE
TITLE 6. ORGANIZATION OF INSURERS AND RELATED ENTITIES
SUBTITLE E. MUTUAL AND FRATERNAL COMPANIES AND RELATED ENTITIES
CHAPTER 888. BURIAL ASSOCIATIONS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 888.001. DEFINITIONS. In this chapter:
(1) "Burial association" means an individual, firm, partnership,
association, or corporation engaged in the business of providing
burial or funeral benefits payable partly or wholly in
merchandise or services, not to exceed $150 or the value thereof.
The term includes a burial company and a burial society.
(2) "Insurance certificate" and "member" have the meanings
assigned by Section 887.001.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 888.002. LIBERAL CONSTRUCTION. Sections 888.051, 888.052,
888.102(b), 888.151, 888.152, 888.153, 888.154, 888.155, 888.156,
888.157, 888.202, 888.203, and 888.204 shall be liberally
construed.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 888.003. BYLAWS OF BURIAL ASSOCIATIONS. The bylaws of a
burial association may not contain any provision in conflict with
this chapter.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 888.004. RULES TO IMPLEMENT PURPOSES OF CHAPTER. The
commissioner may adopt reasonable rules to implement the purposes
of this chapter.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 888.005. APPLICABILITY OF TEXAS NON-PROFIT CORPORATION ACT.
(a) Except to the extent of any conflict with this code, the
Texas Non-Profit Corporation Act (Article 1396-1.01 et seq.,
Vernon's Texas Civil Statutes) applies to a burial association.
The commissioner has each power and duty of, and shall perform
each act to be performed by, the secretary of state under that
Act with respect to burial associations.
(b) On advance approval of the commissioner, a burial
association may pay dividends to its members.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 888.006. APPLICABILITY OF OTHER LAW. A burial association
is subject to Chapter 887.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
SUBCHAPTER B. ANNUAL ASSESSMENT
Sec. 888.051. IMPOSITION OF ANNUAL ASSESSMENT; AMOUNT. (a) An
annual assessment is imposed on each burial association that
holds a certificate of authority to engage in the business of
insurance in this state. The assessment is in addition to any
other fee that the association is required to pay.
(b) The amount of the assessment is equal to the greater of:
(1) the amount computed by multiplying one-half cent by the
number of members in the burial association on December 31 of the
applicable year; or
(2) $5.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 888.052. PAYMENT OF ANNUAL ASSESSMENT. (a) Each burial
association shall pay the annual assessment imposed by Section
888.051 to the department between January 1 and March 1 at the
same time the association files its annual statement with the
department.
(b) Annual assessments collected under this section shall be
deposited to the credit of the Texas Department of Insurance
operating account. Sections 201.001 and 201.002 apply to the
assessments.
(c) All assessments paid to the department under this section
are for the use and benefit of the department to:
(1) obtain advice, information, and knowledge relating to
adequate and reasonable rates for burial associations in this
state;
(2) compile records for purposes of Subdivision (1); and
(3) implement Sections 888.051, 888.052, 888.102(b), 888.151,
888.152, 888.153, 888.154, 888.155, 888.156, 888.157, 888.202,
888.203, and 888.204.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 2E.105, eff. April 1, 2009.
SUBCHAPTER C. INSURANCE CERTIFICATES; PAYMENT OF BENEFITS
Sec. 888.101. INSURANCE CERTIFICATES ISSUED BY BURIAL
ASSOCIATION. (a) Except as provided by Subsection (c), an
insurance certificate issued by a burial association must provide
for the payment of the benefit in specified merchandise or burial
services.
(b) The merchandise or services to be provided must be:
(1) stated in the insurance certificate; and
(2) approved by the department as being of the reasonable value
stated on the face of the certificate.
(c) Subsections (a) and (b) do not apply if, at the time the
insurance certificate is issued, the insured elects to have the
benefit paid in cash.
(d) An election under this section must be stated in the
insurance certificate.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 888.102. PAYMENT INSTEAD OF MERCHANDISE OR SERVICES. (a)
If a burial association that issues an insurance certificate
fails or refuses to provide the merchandise or services specified
by the certificate, the association shall pay the benefit in
cash.
(b) If a burial association that issues an insurance certificate
is not given the opportunity to provide the merchandise or
services specified by the certificate, instead of the specified
merchandise or services, the association shall pay the greater
of:
(1) the total amount paid into its mortuary fund to the credit
of that certificate's account; or
(2) the percentage of the certificate's face value specified by
the certificate.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 888.103. INSURANCE CERTIFICATE FORMS. An insurance
certificate form used by a burial association on or after May 12,
1939, must comply with this chapter.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
SUBCHAPTER D. RATES FOR BURIAL ASSOCIATIONS
Sec. 888.151. DATA COLLECTION RELATED TO RATES. (a) The
commissioner shall:
(1) collect data, statistics, and information on the death
rates, lapses, experiences, and other information relating to
burial association rates in and outside of this state that the
commissioner considers useful in determining reasonable and
adequate rates for burial associations; and
(2) study the statistics, rates, and experiences of burial
associations.
(b) The commissioner may distribute information collected under
Subsection (a)(1) to burial associations in this state.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 888.152. ADOPTION OF RATE SCHEDULE. (a) The commissioner
shall adopt a schedule of reasonable and adequate rates that a
burial association may charge its members. The schedule of rates
must be adopted in compliance with Chapter 2001, Government Code.
(b) The schedule must show the maximum and minimum rates that a
burial association may charge per week, per month, per quarter,
per six months, and per year, for the definite benefits at the
definite ages. The commissioner must designate the ages in
convenient groups.
(c) To ensure the adequacy and reasonableness of the rates, the
commissioner may consider information gathered from an area of
this state that is sufficiently large to include the varying
conditions of the risks involved and during a period sufficiently
long to ensure that the minimum and maximum rates authorized are:
(1) just and reasonable as they apply to members of the public
who become insured under this chapter; and
(2) adequate and non-confiscatory as they apply to the burial
associations.
(d) The commissioner may require:
(1) sworn statements from any burial association in this state
showing its experience in rates collected and claims paid over a
reasonable period; and
(2) any other information the commissioner considers necessary
or useful in adopting the rate schedule.
(e) The department shall mail a copy of the adopted rate
schedule to each burial association that holds a certificate of
authority to engage in the business of insurance in this state.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 888.153. NEW OR AMENDED RATE SCHEDULES. (a) At any time
the commissioner considers appropriate, the commissioner may
adopt:
(1) a new rate schedule for burial associations; or
(2) an amendment to an existing rate schedule.
(b) After the commissioner adopts a new rate schedule or an
amendment to an existing rate schedule and sends a copy to the
burial associations, each burial association shall use the new or
amended rate schedule for individuals who the association
subsequently accepts as members.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 888.154. CONTRACTS WITH EXPERTS AND CONSULTANTS. The
department may contract with experts and consultants to assist
the department in exercising the department's powers and
performing the department's duties under this subchapter.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 888.155. RETENTION OF BURIAL ASSOCIATION'S INITIAL RATE
SCHEDULE. Each burial association shall retain, as part of its
permanent records, the initial rate schedule adopted by the
association under former Article 14.45, Insurance Code, following
the amendment of that article by Chapter 593, Acts of the 66th
Legislature, Regular Session, 1979.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 888.156. CHANGE OF RATES BY BURIAL ASSOCIATION. (a) With
the department's consent, a burial association may change its
rates by adopting a new rate schedule and filing that schedule
with the department.
(b) The new rate schedule must be similar in all respects to the
initial schedule adopted by the burial association and each new
rate must be not less than the minimum or more than the maximum
rate adopted by the commissioner.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 888.157. CONTINUATION OF FORMER RATES. (a) A burial
association that had rates adopted and in use before June 12,
1947, may continue to apply those rates to individuals who were
members of the burial association on that date.
(b) With the department's approval, the burial association may:
(1) change the rates described by Subsection (a); and
(2) make the new rates correspond to the rate schedule most
recently filed by the burial association with the department.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 888.158. FAILURE TO COMPLY WITH COMMISSIONER RATE ORDERS.
If a burial association refuses to comply with an order of the
commissioner regarding rates under this subchapter, the
commissioner shall consider the association insolvent.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
SUBCHAPTER E. PROHIBITIONS
Sec. 888.201. UNAUTHORIZED PROVIDING OF BURIAL OR FUNERAL
BENEFITS. An individual, firm, partnership, corporation, or
association may not engage in the business of providing burial or
funeral benefits payable partly or wholly in merchandise or
services unless the individual, firm, partnership, corporation,
or association is authorized to engage in that business by this
chapter, Chapter 886, Chapter 887, or another law.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 888.202. RATE VIOLATIONS. (a) A burial association or an
officer, agent, or employee of a burial association may not
charge or collect any rate from a member of the association other
than the rate applicable for the age and benefit stated in the
association's rate schedule on file with the department and in
force at that time.
(b) An officer, agent, or employee of a burial association
commits an offense if the officer, agent, or employee violates
Subsection (a).
(c) An officer of a burial association commits an offense if the
officer knowingly permits a violation of Subsection (a).
(d) An offense under this section is a misdemeanor punishable by
a fine of not less than $50 or more than $200.
(e) The department may revoke the certificate of authority of a
burial association that violates this section.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 888.203. CONNECTION BETWEEN BURIAL ASSOCIATIONS. (a) A
burial association may not be directly or indirectly connected
with another burial association.
(b) A member, director, or officer of a burial association may
not be a member, director, or officer of another burial
association.
(c) A person whose spouse or employee is an officer or director
of a burial association may not be an officer or director of
another burial association.
(d) A funeral director or funeral home directly or indirectly
connected with a burial association or designated by a burial
association as its funeral director or funeral home may not be:
(1) connected in any manner with another burial association; or
(2) designated by another burial association as its funeral
director or funeral home to:
(A) provide its members with services or merchandise; or
(B) service its policies.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 888.204. CERTAIN AFFILIATIONS BETWEEN BURIAL ASSOCIATIONS
AND FUNERAL HOMES PROHIBITED. (a) It is against the public
policy of this state for a funeral home or an owner of an
interest in a funeral home to be directly or indirectly connected
or affiliated with more than one burial association.
(b) The commissioner shall adopt rules as necessary to implement
this section.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.
Sec. 888.205. VIOLATION OF CHAPTER; CRIMINAL PENALTY. (a) A
director, officer, agent, employee, attorney at law, or attorney
in fact of a burial association, or other person commits an
offense if the person violates a provision of this chapter other
than Section 888.202.
(b) An offense under this section is a misdemeanor punishable
by:
(1) a fine not to exceed $500;
(2) confinement in jail for a term not to exceed six months; or
(3) both the fine and confinement.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1,
2003.