21 NCAC 34D .0203         SURETY BONDS

(a)  Any applicant for a new preneed funeral establishment license or any preneed licensee required to maintain a surety bond under G.S. 90-210.67(b) shall submit a copy of the bond with its initial application and with each renewal application.  The bond shall cover all insurance premiums paid under a preneed insurance policy and all trust payments under a preneed funeral trust.  The bond shall name the Board as trustee and shall be issued by a bonding company licensed to do business in this State.  The Board shall recognize all surety bond forms approved by the N.C. Department of Insurance.

(b)  Any preneed establishment licensee required to obtain a bond may petition the Board to repeal the requirement one year after obtaining the bond.  The preneed establishment licensee shall establish that the firm is solvent.  For purposes of this paragraph, solvency shall be defined as assets in excess of liabilities; provided, however, that goodwill shall not be considered an asset and that unperformed preneed funeral contracts shall be treated as both an asset and a liability of equal value.  A preneed establishment may demonstrate solvency by submitting a balance sheet prepared by a certified public accountant that is no more than 90 days old or through other financial evidence generally recognized as valid by certified public accountants.

(c)  All petitions must be filed on a form provided by the Board.  The petition form shall be verified before a notary public by the owner, a corporate officer, partner, or member of the limited liability company owning the preneed establishment and shall require the petitioner to furnish the following information:

(1)           the name of the preneed establishment;

(2)           certifications that the firm is solvent, has no unsatisfied civil judgments against it, and has not paid a claim on the bond; and

(3)           any other information that the Board deems necessary to determine solvency or to process the petition and that is required by law.

History Note:        Authority G.S. 90-210.67(b); 90-210.69(a);

Eff. October 1, 2010.