Could South Carolina’s preneed funeral loss fund reimburse a qualifying claim when the death occurred before the fund began?

Plain-English summary

South Carolina's banking commissioner asked whether the Preneed Funeral Loss Reimbursement Fund could cover an otherwise eligible loss if the person whose funeral was covered had died before the fund began. The Attorney General concluded in 2005 that it could. The fund's statute took effect March 17, 2004, but the AG read it as a remedial law that could operate retroactively for qualifying beneficiaries.

The opinion began with the usual presumption that statutes apply only prospectively. It then applied the exception for a remedial statute providing an additional remedy for an existing loss. The AG said reimbursement from a new source of funds did not impair existing contracts. He did not say that every earlier death automatically produced a payment: beneficiaries still had to otherwise qualify under the fund law.

Currency note

This opinion was issued in 2005. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Did a death before March 17, 2004 automatically bar reimbursement?
No. The AG concluded that an otherwise qualifying beneficiary could be reimbursed even when the decedent died before that date.

Why did the AG permit retroactive application?
He classified the fund law as remedial because it supplied an additional source of compensation for covered losses.

Did the opinion make every preneed funeral contract loss reimbursable?
No. Its conclusion was limited to beneficiaries who otherwise qualified for reimbursement under the statute.

Background and statutory framework

2004 Act No. 188 established the fund at § 32-7-60. The opinion applied South Carolina decisions on prospective statutes and the remedial-law exception to the fund's purpose of covering specified losses associated with South Carolina funeral homes and directors.

Citations and references

• 2004 Act No. 188: enactment establishing the fund.
• § 32-7-60: statutory fund provision quoted and interpreted by the AG.

Official title

Asking whether purchasers of preneed funeral contracts that have suffered a covered loss may be reimbursed from the Preneed Funeral Loss Reimbursement Fund (“Fund”) when the death triggering the reimbursement claim occurred prior to the effective date of the enabling legislation.

Requester

Louie A. Jacobs, Commissioner of Banking, Board of Financial Institutions

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/november-2-2005-1/
• Original PDF: https://www.scag.gov/wp-content/uploads/2011/03/05nov2jacobs.pdf

Original opinion text

HENRY M CM ASTER
ATTORJ\EY G E.'IERAL

November 2, 2005

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Mr. Louie A. Jacobs
Commissioner of Banking
Board of Financial Institutions
1015 Sumter Street, Room 309
Columbia, South Carolina 29201
Dear Mr. Jacobs:

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You asked for an opinion whether purchasers of preneed funeral con.tracts that have suffered a covered loss may be reimbursed from the Preneed Funeral Loss Reimbursement Fund ("Fund") when the death triggering the reimbursement claim occurred prior to the effective date of the enabling legislation. 2004 Act No. 188, codified at S.C. Code Ann. § 32-7-60 (Supp. 2004) ("Act"), established the Fund effective March 17, 2004 ("Effective Date"). The Fund reimburses losses by the beneficiaries ("Beneficiaries") of preneed funeral contracts that result from the misfeasance, fraud, default, failure, or insolvency of a South Carolina funeral home or South Carolina funeral director. The Act is silent about its application when the decedent died prior to the Effective Date. LawI Analysis The legal presumption is that legislation applies prospectively rather than retroactively unless the General Assembly expressed clear intent to the contrary. Thus, there is a question of whether coverage exists when the decedent died prior to the Effective Date. "(T]he primary purpose of statutory construction is to ascertain the intent of the legislature." State v. Martin, 293 S.C. 46, 48, 358 S.E.2d 697, 697 (1987). "In the construction of statutes, there is a presumption that statutory enactments are to be considered prospective rather than retroactive in their operation unless there is a specific

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Mr. Louie A. Jacobs
November 2, 2005
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provision in the enactment or clear legislative intent to the contrary." S.C. Dept. of Revenue v. Rosemary Coin Machines, Inc., 339 S.C. 25, 28, 528 S.E.2d 416, 418 (2000).

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Remedial or procedural statutes provide an exception to the rule of prospective application. "A principal exception to the ... presumption [of prospective effect] is that remedial or procedural statutes are generally held to operate retroactively." Hercules, Inc. v. South Carolina Tax Commission, 274 S.C. 137, 143, 262 S.E.2d 45, 48 (1980). In Smith v. Eagle Const. Co. Inc., 282 S.C. 140, 318 S.E.2d 8 (1984), the Supreme Court of South Carolina commented upon the "remedial" exception as follows: Statutes are remedial and [retroactive], in the absence of directions to the contrary, when they create new remedies for existing rights ... enlarge the rights of persons under disability, and the like, unless [they] violate some contract obligation... Statutes directed to the enforcement of contracts, or merely providing an additional remedy, or enlarging or making more efficient an existing remedy, for their enforcement, do not impair the obligation of the contracts." 282 S.C. at 143, 318 S.E.2d at 9, citing Byrd v. Johnson, 220 N.C. 184, 16 S.E.2d 843, 846 (1941). The Act states that:

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The purpose of the fund is to reimburse the estates, or in the absence of an estate filing, the purchaser or applicant with payment jointly to the funeral home providing services or merchandise or both, of beneficiaries of preneed funeral contracts who have suffered financial loss as a result of the misfeasance, fraud, default, failure, or insolvency of a South Carolina funeral home or South Carolina funeral director.
§ 32-7-60.

The Act is remedial in nature because it provides the additional remedy of reimbursement from the Fund. Therefore, the Act should be interpreted to have retroactive application. The Fund creates a new source of funds for compensation to the Beneficiaries and; therefore, does not impair the obligations of existing contracts.

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Mr. Louie A. Jacobs
November 2, 2005
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Conclusion
It is our opinion that the Act may be applied retroactively so that Beneficiaries who otherwise qualify for reimbursement from the Fund may be reimbursed when the decedent passed away prior to March 17, 2004.

With kind regards, I am
Very truly yours,

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J.{J__~
T. Parkin Hunter
Assistant Attorney General

REVIEWED AND APPROVED:

Assistant Deputy Attorney General

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