Memorandum Number 636
Authority of Annual Conference to Require Local Church Participation in Conference Property and Liability Insurance Program.
The 1988 session of the Southern New Jersey Annual Conference adopted a Conference Insurance Plan to provide coverage for all local churches, effective January 1, 1989.
In the 1990 session, four resolutions bearing on that insurance plan were submitted to the Conference by a lay member. One was adopted and two were ruled out of order by the presiding bishop, Neil D. Irons. The member submitting the resolutions then made a written appeal for a decision of law from the bishop on two questions:
1. Does the Annual Conference have the right to force the local Board of Trustees to participate in a Conference Insurance Program when the local Board of Trustees has ruled the coverage inadequate for their church?
2. Can action of Annual Conference overrule the Book of the Discipline and reassign duties and obligations specifically given to the local Board of Trustees to a committee of the Annual Conference?
The bishop ruled that "the Annual Conference has both the right and the authority to require local churches to participate in the Annual Conference property and liability insurance program, but the local church may add coverage beyond that entailed in the Conference program."
The decision came to the Judicial Council for review under Par. 2612 of the 1988 Discipline.
The bishop's rationale for the decision states, in part:
Article II, Section VII of the Constitution of The United Methodist Church provides that "the Annual Conference is the basic body in the church and as such shall have reserved to it... rights as have not been delegated to the General Conference under the Constitution. . . ."
All real property acquired by a local church of The United Methodist Church is subject to a trust as provided generally in Paragraph 2501 of the 1988 edition of the Discipline, and as stated specifically in Paragraph 2503 with regard to use . . .
No active church can sell or mortgage its property without consent of the proper District Superintendent of the Annual Conference, representing The United Methodist Church (Para. 2538.3 [sic; 2538] and 2539.3) . . . The power of an Annual Conference to sell the property of an abandoned local church is set forth in Para. 2546 [sic; 2548] of the Discipline . . .
These Disciplinary . . . provisions make it clear that the Annual Conference, as the basic body of The United Methodist Church, has an ultimate interest in all property of all local churches; and has continuing authority over the disposition of such property in order to protect that ultimate interest. . . . It therefore seems abundantly clear that the Annual Conference has an identifiable interest in any plan or program relevant to providing proper and adequate protection and security for the property and activities of its local church[es], and can require its constituent local churches to participate in a conference-wide property and liability insurance program.
Bishop Irons has correctly interpreted the meaning and application of the relevant disciplinary provisions regarding insurance of local church property. The Discipline is silent on the question of who shall select and secure insurance for the local church. If the Annual Conference wishes to assume that authority and responsibility, it may do so. The bishop's decision is affirmed.