State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_90 > GS_90-210_107

§ 90‑210.107. Acquisition, merger, dissolution, and liquidation of mutual burialassociations.

(a)        Any insurancecompany which desires to purchase the assets of or to merge with a burialassociation as provided in G.S. 90‑210.106 shall submit to the Board ofFuneral Service and to the secretary of the association a written proposalcontaining the terms and conditions of the proposed purchase or merger. Aproposal may be conditioned upon an increase in the assessments of anassociation in the manner set out in subsection (g) of this section. In such acase, the issues of purchase or merger and an increase in assessments may beconsidered at the same meeting of the association.

(b)        Upon receipt of awritten proposal:

(1)        The Board shallissue an order directing the association to hold a meeting of the membershipwithin 30 days following receipt of the order for the purpose of voting on theproposal.

(2)        Within 10 days ofreceiving the order from the Board, the association shall give at least 10days' written notice of the meeting to each of its members. The notice shall:

a.         State the date,time, and place of the meeting.

b.         State the purpose ofthe meeting.

c.         Contain or haveattached the proposal submitted by the insurance company.

d.         Contain a statementlimiting the time that each member will be permitted to speak to the proposal,if the association deems it advisable.

e.         Contain a writtenproxy form and instructions concerning the proxy prescribed by the Board.

(c)        A representative ofthe insurance company shall be permitted to attend the meeting held by theassociation for the purposes of explaining the proposal and answering anyquestions from the members. The officers of the association may present theirviews concerning the proposal. Any member of the association who wishes tospeak to the proposal shall be permitted to do so subject to any timelimitation stated in the notice of the meeting.

(d)        The secretary ofthe association shall record the name of every member who is present at themeeting or has issued a written proxy pursuant to G.S. 55A‑7‑24 andshall determine whether there is a quorum. The presence of 15 members or tenpercent (10%) of the membership, whichever is greater, shall constitute aquorum. Acceptance or rejection of the proposal shall be by majority vote ofthe members voting. Any member who is at least 18 years of age shall bepermitted to vote. A parent or guardian of any member who is under 18 years ofage may vote on behalf of his or her child or ward, but only one vote may becast on behalf of that member.

(e)        The secretary ofthe association shall certify the result of the vote and the presence of aquorum to the Board within five days following the meeting and shall includewith the certification a copy of the notice of the meeting that was sent to themembers of the association.

(f)         The Board shallimmediately review the certification, the notice, and any other records thatmay be necessary to determine the adequacy of notice, the presence of a quorum,and the validity of the vote. Upon determining that the meeting and vote wereregular and held following proper notice and that a majority of a quorum of themembers voted in favor of the proposal, the Board shall issue an orderapproving the purchase or merger and directing that the purchase or mergerproceed in accordance with the proposal.

(g)        Any burialassociation whose current assessments are not, or are unlikely to be within thenext three years, adequate to reach or maintain a reserve of at least twenty‑onedollars ($21.00) per member or are inadequate to meet the requirements of aproposal from an insurance company to acquire the assets of or to merge withthe association may increase its assessments by an amount necessary to reachand maintain the reserve or to meet the proposal. The increase shall beapproved by a vote of the members of the association at a regular meeting ofthe association or at a special meeting called for the purpose of increasingassessments.

(1)        Any officer ordirector of the association may call a special meeting for the purpose ofincreasing assessments, and the secretary shall call a special meeting for suchpurpose upon the request of at least ten percent (10%) of the members or uponreceipt of a proposal from an insurance company that is conditioned upon anincrease in assessments.

(2)        Written noticesetting out the date, time, place, and the purpose of the meeting shall be handdelivered or sent by first‑class mail, postage prepaid, to the last knownaddress of each member of the association at least 10 days in advance of themeeting.

(3)        No vote may be hadon the question of an increase in assessments unless a quorum of the members ofthe association is present at the meeting. A quorum shall be conclusivelypresumed if 15 members or ten percent (10%) of the membership of theassociation, whichever is greater, is present at the meeting.

(4)        The proposal toincrease the assessments shall be approved by an affirmative vote of a majorityof the members present and voting.

(5)        The secretary of theassociation within five days following the meeting shall certify the result ofthe vote and the presence of a quorum to the Board in the manner and for thepurposes set out in subsections (e) and (f) of this section.

(h)        Upon a writtenrequest from an association that has held a valid meeting and voted forvoluntary dissolution in accordance with G.S. 90‑210.81, the Board shallissue an order of liquidation for that association.

(i)         Upon receipt of arequest for voluntary dissolution under subsection (h) of this section or ifthe sponsoring funeral establishment has its permit revoked or ceases operationfor any reason, the Board shall issue an order of liquidation. The Board'sorder may direct that the agreements for members' benefits be transferred to afinancially sound mutual burial association, as well as all records, property,and unexpended balances of funds of the association to be liquidated, if thefinancially sound mutual burial association agrees in writing to accept thetransfer. The Board's order shall direct the burial association to complete theliquidation and to file a final report with the Board no later than December 31of the year of the liquidation. Upon receipt of the order of liquidation, theburial association shall:

(1)        Cease accepting newmembers.

(2)        Collect all debtsowed to the association and pay all debts owed by the association from monieson hand, including the reserve.

(3)        Distribute pro rataany remaining monies on hand and in the reserve among those who were members ofthe association and whose transfer could not be accomplished on the date thatthe liquidation order was issued by the Board. Each member's distributive shareshall be determined by dividing the amount of the member's benefit by theaggregate benefits of all members of the association and then multiplying thetotal amount of money available for distribution by the percentage so derived.Assessments owed by the members to the association at the time of distributionshall be taken into account and shall be offset against the members'distributive shares.

(4)        Issue a certificateto members in an amount that equals the difference between the distributiveshare issued in subdivision (3) of this subsection and the full amount of themember's association benefit. Any certificate issued shall supersede andsupplant any other certificate already issued by the association. Thecertificate shall be on a form prescribed by the Board and shall be preparedand distributed by the association at its expense.

(5)        File a final reportwith the Board on or before December 31 in the year in which the order ofliquidation was issued. This report shall show all receipts and disbursements,including the amount distributed to each member, since the last annual reportof the association was filed with the Board.

(j)         A certificateissued under subsection (i) of this section may be used as a credit toward thecost of funeral services, facilities, and merchandise at any funeralestablishment that agrees on forms prescribed by the Board to accept such certificates.A funeral establishment that agrees to accept certificates shall do so untilthe agreement with the Board expires. The Board shall maintain and distributeto the public a list of funeral establishments that will accept certificates.

(k)        Upon receipt of thefinal report of dissolution by the association, which is required by subsection(i) of this section, the Board shall immediately review the final report andshall notify the association whether the report is complete and has beenaccepted. Upon acceptance of the final report by the Board, all licenses issuedto soliciting agents of the association pursuant to G.S. 90‑210.84 areautomatically cancelled. (1999‑425, s. 3; 2003‑420, ss. 1, 17(b);2007‑531, s. 17.)