CurrentAlabama Department of InsurancePolicy 2009-02

Adjustments to endowment care fund deposits

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Governs how cemetery authorities in Alabama may adjust deposits to required endowment care funds when transactions are cancelled or excess deposits are discovered, and the recordkeeping and timing requirements for such credits.

Policy Summary

PayerAlabama Department of Insurance

PolicyAdjustments to endowment care fund deposits

Policy CodePolicy Policy 2009-02

Change TypeNo material changes

Effective DateFeb 19, 2009

Next Review Date

Key ActionA cemetery authority may apply a credit against future required deposits when a transaction was cancelled with a 100% refund or when an excess deposit was made due to error, and any credit must be recognized within four calendar months.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

4 monthscredit recognition deadline

100%refund requirement for cancellation

1 (net income)permissible withdrawal type

detailedrecordkeeping

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CurrentAlabama Department of InsurancePolicy 2009-02

Adjustments to endowment care fund deposits

Customize your policy alerts

Sign up for Alabama Department of Insurance Policy 2009-02 alerts

Get alerted when Policy 2009-02 changes without checking for updates manually.

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Policy Summary

PayerAlabama Department of Insurance

PolicyAdjustments to endowment care fund deposits

Policy CodePolicy Policy 2009-02

Change TypeNo material changes

Effective DateFeb 19, 2009

Next Review Date

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

4 monthscredit recognition deadline

100%refund requirement for cancellation

1 (net income)permissible withdrawal type

detailedrecordkeeping

Adjustment Conditions and Requirements

Adjustment conditions and requirements

Conditions under which a cemetery authority may adjust future endowment care fund deposits:

ANY of the following

If a purchaser cancels a transaction and the cemetery authority refunds 100% of the purchase price (including the portion allocated to endowment care), the cemetery authority may recognize a credit against future required deposits equal to the contribution actually made for the cancelled transaction.
If a calculation or other error resulted in an excess contribution to the endowment care fund for a transaction, the cemetery authority may recognize a credit against future required deposits equal to the excess amount deposited in error.

Recognition of a credit is permissive (at the option of the cemetery authority).

A recognized credit must be applied not later than four (4) calendar months after the date of the event (cancellation or discovery of the error).

Credits applied against future required deposits must not be recorded as withdrawals from the endowment care fund; cemetery authorities must maintain detailed records and, upon examination or request, provide a summary of all endowment care fund adjustments for the period under review.

Except as provided for payment of net income for endowment care costs under Ala. Code § 27-17A-50(b), amounts once deposited to an endowment care fund generally may not be withdrawn for other reasons.

Administrative Coding & Deadlines

Administrative (no medical codes)mixed

No billing/coding provisions in this administrative bulletin.

inv-03: Credit recognition deadline

Deadline to recognize creditCredits must be recognized not later than four (4) calendar months after the date of the event (cancellation or discovery of an error).

Optional recognitionRecognition of a credit is at the option of the cemetery authority (permitted but not mandatory).

Triggering eventsApplicable events include purchaser cancellation with full refund or discovery of an excess deposit due to calculation or other error.

Records requirementCredits must be supported by detailed records and a summary of adjustments must be provided upon examination or request.

Permissible Withdrawals and Credit Application

Documentation Required

Only permissible withdrawal: payment of net income

Payment of net income from the endowment care fund for covering the costs of the cemetery's endowment care is the only legally permissible form of asset withdrawal from an endowment care fund under Ala. Code § 27-17A-50(b).

Prior Authorization

Apply credit to future deposits for full refunds or excess deposits (4-month deadline)

A cemetery authority may apply a credit against future required endowment care deposits when a purchaser cancels and the cemetery authority refunds 100% of the purchase price (including the portion allocated to endowment care), or when an excess contribution was made due to error; recognition of the credit is optional but, if taken, must occur within four calendar months of the event.

Credit amount equals the contribution actually made for the cancelled transaction or the excess amount deposited in error.
Credits should not be recorded as withdrawals from the endowment care fund.

Terminology

inv-06: Payment of net income for endowment care costs

Permissible withdrawalPayment of net income from the endowment care fund to cover the cemetery's endowment care costs is the only legally permissible form of asset withdrawal from an endowment care fund (Ala. Code § 27-17A-50(b)).

Prohibited withdrawalsAmounts deposited for a transaction generally cannot be withdrawn for cancellations or later-discovered errors except as payment of net income under § 27-17A-50(b).

Statutory authorityPolicy interprets Ala. Code § 27-17A-50(b) regarding permissible withdrawals.

inv-07: Recognized reduction (credit) applied to subsequent required deposits

Nature of creditA recognized reduction (credit) is applied to subsequent required deposits equal to the refunded amount for a cancelled transaction or the excess amount deposited in error; such adjustments should not be recorded as withdrawals from the endowment care fund.