19 Miss. Code. R. § 2-3.04 - Supplement

TO: All Persons and Associations Operating Under the Burial Insurance

Laws ofthe State of Mississippi

FROM: Evelyn Gandy

Commissioner of Insurance

The Insurance Department has been asked by a number of burial association owners to give consideration to several changes and modifications which they desire and purpose to have made to the rules and regulations which were issued and mailed to you from this office on November 6, 1973. Careful study and thorough consideration have been given to these subjects which are more fully reviewed and discussed as follows:

A. Minimum Rate Schedule- Nothing contain in our regulation of November 6, 1973, was intended to convey the impression that the Commissioner of Insurance had established a mandatory standard rate to be used by any association whose policyholders services, funeral benefits and plan of operation under the revised law justify the charging of a higher premium. Instead, this schedule merely lists and sets forth the lowest or minimum rate which would be approved by the Insurance Department for any association.

Our study shows that a substantial number of associations are presently using this minimum rate and can justify its continued usage. Further, no advantage has been found for this or any other so-called minimum rate schedule except the doubtful value of possibly discouraging willful intent to twist business from one association to another. The Insurance Department holds the view that any such unethical practice can and will be properly dealt with under other related insurance statuses.

In view of the foregoing, notice is hereby given that no change has been approved or made in the afore-mentioned minimum rate schedule which has been long-established and accepted by both the Insurance Department and burial insurance industry for many years. However, we emphasize again that each association has the option of using this minimum rate or a higher rate provided that proper justification for whichever rate is proposed is submitted to the Insurance Department.

B. Standard Provisions- A large number of associations have submitted new policy forms which have completely failed to incorporate or include the new standard provisions which are an absolutely mandatory requirement of the revised burial law after January 1, 1974. For your information and guidance in this regard, we enclose a copy of the required standard provisions which must appear in every burial policy written on and after January 1, 1974.

There is only one exception or change which will be permitted in the Standard Provisions, and this relates to Section 8. If you wish your policy to provide for a 50% pay-off, Section 8 should read:

"If death and/or burial occurs more than fifty (50) miles from any location of the funeral home named herein and should the beneficiary therefore deem it impractical for the association to service this contract, the association shall pay in cash to the member not less than fifty percent (50%) of the face value of the certificate to which the member is entitled or the full return of the premium paid by the member, not to exceed three-fourths percent (3/4%) of the face value of the certificate, whichever amount is larger. If death and/or burial occurs within fifty (50) miles of any location of the funeral home named herein, and the member desires to use a funeral home other than the funeral home named in this contract, the association's liability shall be the full return of the premium paid by the member not to exceed the face value of the certificate."

If you wish your policy to provide for a 100% pay-off, then Section 8 should read:

"If death and/or burial occurs more than fifty (50) miles from any location of the funeral home named herein and should the member therefore deem it impractical for the association to service this contract, the association shall pay in cash to the member not less than one-hundred percent (100%) of the face value of the certificate to which the member is entitled, which shall be in full settlement of the claim. If death and/or burial occurs within fifty (50) miles of any location of the funeral home named herein, and the member desires to use a funeral home other than the funeral home named in this contract, the association's liability shall be the full return of the premiums paid by the member not to exceed the face value of the certificate."

No burial association will be authorized to issue a burial policy on and after January 1, 1974, unless and until it has previously submitted and received the approval of the Commissioner of Insurance of its policy forms and rates which conform and comply with the rules and regulations of our Order dated November 6, 1973, and the above-mentioned authorized changes.

Ordered this the 30th day of November, 1973.

Notes

19 Miss. Code. R. § 2-3.04

Miss. Code Ann. § 83-37-35 (Rev. 2011)