North Carolina Funeral Law Practice Exam

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What percentage of assessments collected from members must burial associations place into a reserve account?

The correct answer is: 5%

The correct percentage of assessments collected from members that burial associations must place into a reserve account is 5%. This requirement is set to ensure that there are adequate funds available for future claims and obligations that the association may encounter. It helps to maintain the financial health and stability of the burial association, ensuring that they can meet their commitments to members and their families. This regulation is in place because burial associations often deal with various financial responsibilities related to funerals and burials, which can vary significantly in cost. By mandating a reserve fund, the state aims to protect both the members' interests and the association's operational integrity, preventing financial shortfalls that could arise from unexpected claims or economic downturns. Proper reserve management is essential for the long-term viability of burial associations and helps to build trust among members.