RELATING TO CONTINUING CARE RETIREMENT COMMUNITIES.

SB3198

THE SENATE

S.B. NO.

3198

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

relating
to continuing care retirement communities
.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

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SECTION 1.
�
The Hawaii
Revised Statutes is amended by adding a new chapter to be appropriately
designated and to read as follows:

"
Chapter

Continuing
care retirement communities

PART

I.
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G
eneral
P
rovisions

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� -1
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Definitions.
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As used in this chapter:

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"Accepted
actuarial standards of practice" means the standards of practice that
conform with Actuarial Standard of Practice No. 3 for Continuing Care
Retirement Communities and At Home Programs, Revised Edition, effective June 1,
2022, including subsequent amendments and editions.

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"Activity
of daily living" means at least bathing, dressing, personal hygiene,
ambulation or locomotion, transferring, toileting, and eating.

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"Actuarial opinion" means an
opinion issued by an actuary in accordance with accepted actuarial standards of
practice.

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"Actuarial study" means an
analysis that includes an actuary's opinion of whether the provider or
applicant is in satisfactory actuarial balance in accordance with accepted
actuarial standards of practice.

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"Actuary" means an individual
qualified to sign an actuarial opinion in accordance with the American Academy
of Actuaries' qualification standards and who is a member in good standing with
the American Academy of Actuaries.

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"Advertisement" means any
written, visual, or electronic information provided to potential residents, or
their representatives, to induce those persons to subscribe to or enter into a
nonbinding reservation agreement, binding reservation agreement, continuing
care contract, or continuing care at home contract.

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"Affiliate" means a person that,
directly or indirectly, through one or more other persons, controls, is
controlled by, or is under common control with a provider or applicant.

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"Annual debt service" means the
current year's capitalized interest cost plus interest expense and scheduled
principal payments, excluding any balloon principal payment amounts and any
portion of the annual debt service that has been or will be funded by debt for
the payment of debt service.

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"Applicant" means any person with
a pending application or other request for approval under this chapter.

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"Audited financial statement"
means a financial statement that has been prepared in accordance with generally
accepted accounting principles and examined by an independent certified public
accountant.

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"Binding reservation agreement"
means a binding contractual agreement between a provider and a depositor that
requires the payment of a deposit to reserve the right to purchase continuing
care, including the right to live in an independent living unit at a continuing
care retirement community.
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"Binding
reservation agreement" does not include purchase and sale agreement for an
independent living unit.

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"Cancel" means to terminate the
force and effect of an agreement or contract.

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"Commissioner" means the
insurance commissioner of the State.

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"Commissioner's website" means
the website maintained by the insurance division of the department of commerce
and consumer affairs.

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"Continuing care" means the
rendering to an individual other than an individual related by blood, marriage,
or adoption to the person rendering the care, of housing in an independent
living unit, together with related services, including access, when needed, to
progressive levels of health care, including but not limited to an assisted
living facility as defined in section 323D-2 and nursing facility, as defined
in section 346F-3, regardless of whether the health care is provided at the
continuing care retirement community where the individual resides or another
location, or through a contractual relationship with a third party, pursuant to
a contract effective for the life of the individual or for a period longer than
one year.

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"Continuing care at home" means a
program offered by a provider holding a permanent license under this chapter
that provides continuing care to an individual who is not yet receiving
housing, which may include programs that offer an individual an opportunity to
move to an independent living unit at a future date, if desired, according to
the provider's established priority and admissions policies at the continuing
care retirement community sponsoring the continuing care at home program.

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"Continuing care retirement community"
means a retirement community consisting of one or more structures where a
provider renders continuing care to residents.
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"Continuing care retirement
community" includes a distinct phase of development approved by the commissioner
when a project is being developed in successive distinct phases over a period
of time.

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"Control" means the direct or indirect
ability to direct or cause the direction of the management and policies of a
person, including the right to designate or elect not less than a majority of
the members of its board of directors or other governing board or body.

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"Controlling person" means the
person that controls an applicant or provider.

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"Debt service coverage ratio"
means a capital structure ratio that measures a provider's ability to pay
annual debt service with cash flow from net cash revenues and net entrance fee
receipts; provided that the quotient is calculated by dividing:

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(1)
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The
sum of:

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(A)
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Total
excess of revenues over or under expenses;

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(B)
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Interest
expense;

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(C)
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Depreciation
expense;

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(D)
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Amortization
expense;

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(E)
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Other
noncash operating losses or expenses; and

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(F)
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Net
cash proceeds from entrance fees;

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(2)
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Minus the sum of:

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(A)
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Entrance
fee amortization;

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(B)
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Entrance
fee refunds contractually past due; and

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(C)
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Other
noncash operating gains or revenues;

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(3)
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By
annual debt service;

provided
further that entrance fees received from the initial residents of independent
living units at a continuing care retirement community that have been financed
in whole or in part with the proceeds of indebtedness shall be excluded from
the net proceeds from entrance fees up to an amount equal to the aggregate of
the principal amount of the indebtedness.

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"Deposit" means any transfer of
consideration made by a depositor to a provider to reserve an independent
living unit at a continuing care retirement community.

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"Entrance fee" means the sum of
any initial, amortized, or deferred transfer of consideration made or to be
made by, or on behalf of, an individual entering into a continuing care or
continuing care at home contract.

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"Escrow agent" means any person
approved by the commissioner to hold entrance fees and deposits required to be
placed in escrow under this chapter.

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"Escrow agreement" means an
agreement between a provider and an escrow agent by which entrance fees and
deposits required to be held in escrow in accordance with this chapter are held
by the escrow agent until release is authorized in accordance with this chapter.

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"Hazardous condition" means a
present, or reasonably anticipated future condition, in which:

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(1)
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A
provider is unlikely to be able to meet its continuing care obligations or to
pay other obligations in the normal course of business; or

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(2)
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The
continued operation of a provider or continuing care retirement community in
its current condition is potentially harmful to depositors, residents,
creditors, or the public.

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"Housing" means a living unit set
forth in a continuing care contract.

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"Independent certified public
accountant" means a certified public accountant or accounting firm in good
standing with the American Institute of Certified Public Accountants and in all
states they are licensed to practice in, who is not employed by, or otherwise
affiliated with, an applicant or provider.

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"Independent living unit" means a
living unit in a continuing care retirement community for residents who are
routinely able to carry out activities of daily living, with minimal or no
assistance; provided that the accommodations may be in the form of apartments,
flats, houses, cottages, condominium units, or rooms; provided further that receiving
home care or similar services, regardless of whether the services are provided
by the provider or another person, does not preclude a living unit from being
considered an independent living unit.

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"Insolvent" means a provider is
unable to pay its obligations as they come due in the normal course of
business.

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"Living unit" means an
independent living unit, adult care home bed, nursing bed, or other area within
a continuing care retirement community set aside for the exclusive use or
control of one or more identified residents.

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"Long-term care facility" has the
same meaning as defined in section 349-21.

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"Manager" means a person who
administers the day-to-day business operations of a continuing care retirement
community for a provider, subject to the policies, directives, and oversight of
the provider.

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"Net cash proceeds from entrance fees"
means the total entrance fees received less entrance fees refunded, and less
initial entrance fees received for new independent living units.

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"Nonbinding reservation agreement"
means an agreement between a provider and a depositor, which may be canceled by
either party upon written notice at any time, confirming a person's desire to
reserve an independent living unit at a continuing care retirement community on
a nonbinding basis.

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"Obligated group" means one or
more persons that agree to be jointly and severally bound by a financing
structure containing security provisions and covenants applicable to the group.

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"Occupancy rate" means a ratio
used to show the actual occupancy or utilization of living units, calculated by
living unit type, at a continuing care retirement community for a given time
period expressed as a per cent; provided that the occupancy rate is a rolling
average that is equal to one hundred times the quotient obtained by dividing
occupied living unit days by living unit days available.
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For the purposes of this definition,
"living unit days available" means the maximum number of living unit
days that would have been provided if all available living units were filled
during the given time period.
�

The total
shall equal the sum of all living units, minus any living units that are
unavailable for occupancy, on each day for the given time period.
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For the purposes of this definition,
"occupied living unit days" is the sum of each daily living unit
census at the continuing care retirement community for a given time period,
excluding any second person occupants.
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The
total shall equal the sum of each daily census for the given time period.

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"Periodic fee" means the fee
charged to a resident on a monthly or other periodic basis for housing,
services, or both.

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"Person" means an individual,
partnership, firm, association, corporation, joint-stock company, trust, any
similar entity, or any combination of the foregoing acting in concert.

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"Presale" means entering into an
agreement or contract with a depositor for an independent living unit that is
not yet constructed or available for occupancy.

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"Primary market area" means the
area from which a continuing care retirement community will likely draw the
majority of its residents.

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"Prospective financial statements"
means financial forecasts or financial projections, including the summaries of
significant assumptions and accounting policies prepared by an independent
certified public accountant.

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"Provider" means a person that
offers or undertakes to provide continuing care under a continuing care or
continuing care at home contract, or that represents as themselves as providing
continuing care.
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"Provider"
includes a person who has been issued a permit to accept deposits, a start-up
certificate, or a preliminary certificate.

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"Related party" means a person that
has common interests with a provider because of ownership, control, or by
contract, including affiliates, principal owners, management, or their
affiliates and their management and members of the immediate family of the
principal owners, management, or their affiliates and their management.

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"Resident" means an individual
who enters a continuing care or continuing care at home contract with a
provider, or who is designated to be the individual to receive care under the
contract.

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"Satisfactory actuarial balance" means
meeting all the required conditions, as of a specified valuation date, as set
forth in accordance with accepted actuarial standards of practice.

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� -2
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Continuing care; commissioner approval
required.
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No person shall engage in
the business of offering or providing continuing care without a certification,
license, permit, or other approval from the commissioner as provided in this chapter.

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Engaging in the business of offering or
providing continuing care includes:

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(1)
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Accepting
any deposit or any other payment that is related to continuing care;

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(2)
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Entering
into any nonbinding reservation agreement, binding reservation agreement,
continuing care contract, or continuing care at home contract;

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(3)
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Commencing
construction of a prospective continuing care retirement community;

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(4)
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Converting
an existing building or buildings to a continuing care retirement community;

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(5)
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Executing
new nonbinding reservation agreements, binding reservation agreements,
continuing care contracts, or continuing care at home contracts after a permit,
certificate, or license issued pursuant to this chapter has been inactivated,
surrendered, or forfeited;

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(6)
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Assuming
responsibility for continuing care and continuing care at home contracts; or

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(7)
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Advertising
or marketing to the public any product similar to continuing care through the
use of such terms as "life care," "life plan,"
"continuing care," or "guaranteed care for life," or
similar terms, words, or phrases.

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� -3
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Dividends and distributions.
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No dividend or other distribution of equity
or net assets shall be paid by any provider after the commissioner has
determined that the provider is in a hazardous condition or has been determined
to not be in satisfactory actuarial balance in an actuarial study filed with
the commissioner pursuant to section -93, or when the payment
would have the effect of creating a hazardous condition in the provider or
cause the provider to not be in satisfactory actuarial balance.

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� -4
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Leasing real property.
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(a)
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An
applicant or provider who intends to collect or does collect entrance fees
shall not lease any land or other real property from another person if the land
or other real property is to be used as a material part of a continuing care
retirement community operated by the applicant or provider without first
obtaining approval from the commissioner.

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(b)
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When considering whether to allow an
applicant or provider to lease any of the real property of a continuing care
retirement community under this section, the commissioner shall consider all
relevant factors, including the following:

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(1)
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The
terms of the proposed lease, including the proposed length of the lease and any
proposed purchase options;

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(2)
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The
owner of the real property and the owner's relationship to the applicant or
provider; and

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(3)
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The
distance from any existing real property owned by the applicant or provider.

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� -5
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Electronic filings and submissions;
required.
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Except when required by
the commissioner to submit a hard copy, all applicants and providers shall
submit all filings required by this chapter electronically, in a form and
manner prescribed by the commissioner and in compliance with chapter 489E.

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� -6
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Waiver or modification.
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The commissioner may waive or modify any
provision of this chapter if the commissioner determines a waiver or
modification is justified based on any of the following:

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(1)
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A
state of emergency or disaster being proclaimed in the State or for an area
within the State under section 127A-14 or whenever the President of the United
States has issued a major disaster declaration for the State or for an area
within the State under the Stafford Act, title 42 United States Code section 5121
et seq.; or

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(2)
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An
incident beyond a provider's reasonable control, including an act of God,
insurrection, strike, fire, pandemic, epidemic, power outage, or systemic
technological failure that substantially affects the daily business operations
of a provider or a continuing care retirement community.

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� -7
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Confidential treatment.
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(a)
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All
of the following shall be confidential and privileged, shall not be considered
a public record under chapter 92F, shall not be subject to subpoena, and shall
not be subject to discovery or admissible in evidence in any private civil
action:

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(1)
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Any
third-party management contract or proposed management contract provided to the
commissioner pursuant to section
-21
(a)(3)
or
section -112
(a);

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(2)
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Any
lease agreement or proposed lease agreement provided to the commissioner
pursuant to section -4 or section -21(a)(4);

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(3)
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Any
request for approval provided to the commissioner pursuant to section
-110
(d)
or section -111(a);

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(4)
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The
actuarial study, other than the statement of actuarial opinion, provided to the
commissioner pursuant to section -22(a)(3), -31(b)(3),
-81 (a)(4), or -93;

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(5)
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Any
market study provided to the commissioner pursuant to section -21(a)(9)
or -81(a)(5);

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(6)
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Any
feasibility study provided to the commissioner
�

pursuant to section -22(a)(2) or -31(b)(2);

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(7)
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Documents,
materials, or other information in the possession or control of the commissioner
that are obtained by or disclosed to the commissioner or any other person during
an investigation or examination made pursuant to section -134
or -173; and

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(8)
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All
working papers, information, documents, and copies of those materials produced
by, obtained by, or disclosed to the commissioner in connection with the
financial analysis of a provider by the commissioner.

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(b)
�
Notwithstanding subsection (a), the commissioner
may use these documents, materials, or other information in the furtherance of
any regulatory or legal action brought as a part of the commissioner's official
duties.
�
The commissioner shall not
otherwise make these documents, materials, or other information public without
the prior written consent of the provider to which it pertains unless the commissioner,
after giving the provider and its related parties who would be affected thereby
notice and opportunity to be heard, determines that the interest of residents
or the public will be served by their publication, in which event the commissioner
may publish all or any part of the information in a manner deemed appropriate
by the commissioner.

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(c)
�
Neither the commissioner nor any person who
received any documents, materials, or other information while acting under the
authority of the commissioner pursuant to this chapter or with whom any
documents, materials, or other information are shared pursuant to this chapter
shall be authorized or required to testify in any private civil action
concerning any confidential documents, materials, or information subject to
subsection (a).

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(d)
�
Any document, material, or other information
that is shared with the commissioner that is not covered under subsection (a)
that an applicant, provider, or other person believes is confidential or a
trade secret should be marked as confidential or as a trade secret before
submitting to the commissioner.
�
Any
document, material, or other information that is not marked as confidential is
not eligible for confidential treatment pursuant chapter 92F.

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(e)
�
To assist in the performance of the duties
imposed by this chapter, the commissioner may:

����
(1)
�
Share
documents, materials, or other information, including the confidential and
privileged documents, materials, or information subject to subsection (a) or
(d), with other state, federal, and international regulatory agencies, and with
state, federal, and international law enforcement authorities; provided that
the recipient agrees in writing to maintain the confidentiality and privileged
status of the document, material, or other information and has verified in
writing the legal authority to maintain confidentiality; and

����
(2)
�
Receive
documents, materials, or information, including otherwise confidential and
privileged documents, materials, or information from regulatory and law
enforcement officials of other foreign or domestic jurisdictions, and shall
maintain as confidential or privileged any document, material, or information
received with notice or the understanding that it is confidential or privileged
under the laws of the jurisdiction that is the source of the document,
material, or information.

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(f)
�
The sharing of information by the commissioner
pursuant to this section shall not constitute a delegation of regulatory
authority or rulemaking, and the commissioner shall be solely responsible for
the administration, execution, and enforcement of the provisions of this chapter.

����
(g)
�
No waiver of any applicable privilege or
claim of confidentiality in the documents, materials, or information shall
occur as a result of disclosure to the commissioner under this section or as a
result of sharing as authorized in subsection (e).

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� -8
�
Advertisement in conflict with disclosures
and contracts.
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A provider shall not
engage in any type of advertisement for a continuing care retirement community
if the advertisement contains a statement or representation which materially
conflicts with the disclosures required under this chapter or materially
conflicts with any continuing care or continuing care at home contract offered
by the provider.

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� -9
�
Rules.
�

The commissioner may adopt rules pursuant to chapter 91 to necessary for
the purposes of this chapter.

PART
II.
�
Approval, Certification, Licensure, and
Permitting Process

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� -20
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Permit to accept deposits.
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(a)
�
No
person shall market a proposed continuing care retirement community without a
permit from the commissioner.
�
A person
may apply for a permit by paying an application fee of $200 and filing an
application on a form prescribed by the commissioner.
�
The application form shall include:

����
(1)
�
The
name, business address, and telephone number of the applicant;

����
(2)
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The
name and business address of the applicant's controlling person, if control of
the applicant does not reside with the applicant;

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(3)
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A
proposed nonbinding reservation agreement;

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(4)
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A
proposed escrow agreement that meets the requirements of section -41;
and

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(5)
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A
description of the proposed continuing care retirement community that shall
include:

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(A)
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The
location of the proposed continuing care retirement community;

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(B)
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The
types of living units to be offered;

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(C)
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The
types of continuing care contracts to be offered;

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(D)
�
A
description of the services that will be provided to residents, including an
indication if any services will be provided by any related parties or third
parties; and

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(E)
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A
description of the applicant's corporate structure and experience in developing
or operating continuing care retirement communities, including the experience
of any related party of the applicant.

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(b)
�
The commissioner shall comply with the review
schedule in section -24 in response to an application for a
permit to accept deposits.

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(c)
�
The commissioner shall approve an application
for a permit to accept deposits if the following requirements are met:

����
(1)
�
The
application complies with this section;

����
(2)
�
None
of the grounds for denial listed in section -131 apply to the
applicant;

����
(3)
�
The
proposed escrow agreement meets the requirements of section -41;
and

����
(4)
�
The
proposed escrow agent and depository are acceptable in accordance with section -40.

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(d)
�
After the issuance of a permit to accept
deposits, the applicant may:

����
(1)
�
Disseminate
materials describing the intent to develop a continuing care retirement
community;

����
(2)
�
Enter
into nonbinding reservation agreements; and

����
(3)
�
Collect
deposits in an amount not to exceed $5,000; provided that all deposits
collected shall be placed in escrow and shall only be released in accordance
with part IV of this chapter.

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(e)
�
After the issuance of a permit to accept
deposits, the commissioner shall require the provider to file periodic status
reports in a form prescribed by the commissioner.

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� -21
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Start up certificate.
�
(a)
�
A
person may apply for a start-up certificate by paying an application fee of
$2,000 and submitting the following to the commissioner for review:

����
(1)
�
A
statement signed by the applicant, under penalty of perjury, certifying that to
the best of the applicant's knowledge and belief, the items submitted in the
application are correct; provided that if the applicant is a corporation, the
chief executive officer or other authorized individual shall sign the statement;
provided further that if there are multiple applicants, these requirements
shall apply to each applicant;

����
(2)
�
A
statement disclosing any revocation or other disciplinary action taken, or in
the process of being taken, against a license, permit, or certificate held or
previously held by the applicant, any current or former related party, or any
person included or to be included in a current or proposed obligated group;

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(3)
�
If
the applicant intends to employ a third-party management company to manage the
continuing care retirement community, a copy of the management contract or
proposed management contract, if available, along with a narrative describing
the proposed third-party management company's experience managing continuing
care retirement communities;

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(4)
�
If
the applicant intends to lease any land or other real property to be used as
part or all of the proposed continuing care retirement community, the name of
the person from whom the land or other real property will be leased along with
a copy of the lease agreement, or proposed lease agreement, if available, or a
statement describing the applicant's intentions, including the intended length
of the lease, if a lease agreement or proposed lease agreement is not available;
provided that if the applicant intends to lease any of the real property of the
continuing care retirement community and to collect entrance fees, commissioner
approval shall be received pursuant to section -4;

����
(5)
�
If
the applicant is not the owner of the proposed site, a statement identifying
the current owner and any plans the applicant has for acquiring the proposed
site, including details of any purchase option and requirements for a purchase
option deposit. If a purchase option requires a purchase option deposit, the
purchase option deposit shall be placed in escrow or secured in a manner
acceptable to the commissioner;

����
(6)
�
A
list of all continuing care retirement communities currently or previously
owned, operated, managed, or developed by the applicant or any related party of
the applicant.
�
The list shall:

���������
(A)
�
Furnish
the name, address, city, and state of each continuing care retirement community
listed, and explain the existing or past relationship to the applicant; and

���������
(B)
�
Specify
the current status of each continuing care retirement community listed and
include any administrative actions or financial problems that currently exist,
or have existed, within three years after any relationship was terminated;

����
(7)
�
A
disclosure statement that meets the requirements of section -61;

����
(8)
�
If
the applicant intends to enter into binding reservation agreements, a copy of
the binding reservation agreement that the applicant intends to use;

����
(9)
�
A
market study prepared by a person experienced in the preparation of continuing
care retirement community market studies;

���
(10)
�
Any
other data, financial statements, and pertinent information as the commissioner
may reasonably require with respect to the applicant, the applicant's
controlling person, or the proposed continuing care retirement community to
assist in determining the market and financial viability of the proposed
continuing care retirement community and the competency, experience, and
integrity of the applicant's and, if applicable, the applicant's controlling
person's, governing body, officers, and management.

����
(b)
�
The commissioner shall comply with the review
schedule in section -24 in response to an application for a
start-up certificate.

����
(c)
�
The commissioner shall approve an application
for a start-up certificate if the following requirements are met:

����
(1)
�
The
application complies with this section;

����
(2)
�
None
of the grounds for denial listed in section -131 apply to the
applicant;

����
(3)
�
The
disclosure statement meets the requirements of section -61;

����
(4)
�
A
market for the proposed continuing care retirement community appears to exist
and the continuing care retirement community appears to be financially viable,
as evidenced by the market study and the five-year prospective financial
statements included in the applicant's disclosure statement; and

����
(5)
�
The
applicant's and, if applicable, the applicant's controlling person's, governing
body, officers, and management are, in the commissioner's opinion, competent,
experienced, and of good integrity.

����
(d)
�
After issuing a start-up certificate, the commissioner
shall:

����
(1)
�
Require
the provider to submit periodic sales, development, and unaudited financial
statements in a form prescribed by the commissioner; and

����
(2)
�
Post
the disclosure statement of the continuing care retirement community on the commissioner's
website.

����
(e)
�
After receiving a start-up certificate from
the commissioner, the provider may:

����
(1)
�
Enter
into binding reservation agreements and continuing care contracts;

����
(2)
�
Accept
entrance fees and deposits greater than $5,000; provided that all or any part
of an entrance fee or deposit collected shall be placed in escrow and shall
only be released in accordance with part IV of this chapter;

����
(3)
�
Begin
site preparation work; and

����
(4)
�
Construct
model independent living units for marketing.

����
� -22
�
Preliminary certificate.
�
(a)
�
A
person may apply for a preliminary certificate by submitting to the commissioner
for review:

����
(1)
�
A
statement signed by the applicant, under penalty of perjury, certifying that to
the best of the applicant's knowledge and belief, the items submitted in the
application are correct; provided that if the applicant is a corporation, the
chief executive officer or other authorized individual shall sign the statement;
provided further that if there are multiple applicants, these requirements
shall apply to each applicant;

����
(2)
�
A
feasibility study, prepared by an independent person experienced in preparing
feasibility studies for continuing care retirement communities, with financial,
marketing, and actuarial assumptions that projects the market and financial
viability of the proposed continuing care retirement community; provided that the
study shall include:

���������
(A)
�
A
description of the proposed continuing care retirement community, its service
package, the number and type of living units, fee structure, and anticipated
opening date, including a detailed schedule of projected periodic fees and a
description of how the projected periodic fees were computed;

���������
(B)
�
A
description of any proposed construction plans, construction financing, and
permanent financing for the proposed continuing care retirement community;

���������
(C)
�
A
description of the anticipated source, cost, terms, and uses of all funds to be
used in the real property acquisition, construction, marketing, and operation
for the proposed continuing care retirement community, including the following:

��������������
(i)
�
A description of all debt to be incurred by the applicant,
including the source, anticipated terms, and costs of financing;

�������������
(ii)
�
A description of the source and amount of equity to be contributed
by the applicant or any other person;

������������
(iii)
�
A description of the source and amount of all other funds,
including entrance fees, that will be necessary to complete and operate the
proposed continuing care retirement community;

�������������
(iv)
�
A statement itemizing all estimated project costs, including the
real property costs, the cost of acquiring or designing and constructing the
proposed continuing care retirement community, and all similar costs that the
applicant expects to incur prior to the commencement of operation; provided
that this itemization shall identify all costs related to the proposed
continuing care retirement community, including financing expenses, resident
acquisition costs, marketing costs, and furniture and equipment;

��������������
(v)
�
An estimate of any reserves required by financing and the operating
reserve required pursuant to part XI of this chapter; and

�������������
(vi)
�
An estimate of the amount of funds, if any, that will be necessary
to fund start-up losses and to otherwise provide additional financial resources
in an amount sufficient to ensure full performance by the applicant of its
continuing care contract obligations;

���������
(D)
�
An
analysis of the potential market for the applicant's proposed continuing care
retirement community, addressing the following:

��������������
(i)
�
The population, household growth, age distribution, household
income, household tenure, and resale housing values within the primary market
area;

�������������
(ii)
�
A demand analysis of the range of likely target consumers within
the primary market area as well as estimated penetration rates;

������������
(iii)
�
An economic analysis of current market conditions and trends that
can impact the feasibility of the proposed continuing care retirement
community, positively or negatively, including real estate, income, employment,
and the general economic outlook for the primary market area and surrounding
areas;

�������������
(iv)
�
An analysis of the project location and immediate area in
relationship to key variables, including accessibility, employment, and
proximity to health care, retail, and other services;

��������������
(v)
�
The types of services and amenities desired and the forms of
ownership or interest in real property preferred; and

�������������
(vi)
�
Existing and planned competition in the primary market area;

���������
(E)
�
A
description of the sales and marketing plan, including:

��������������
(i)
�
Marketing projections, anticipated sales, and cancellation rates;

�������������
(ii)
�
Month-by-month projections of independent living unit sales through
stabilized occupancy;

������������
(iii)
�
A description of the marketing methods, staffing, and advertising
media to be used by the applicant; and

�������������
(iv)
�
An estimate of the total entrance fees to be received prior to
opening the proposed continuing care retirement community;

���������
(F)
�
Projected
move-in rates and resident profiles, including couple mix by living unit type,
age distribution, adult care home bed and nursing bed utilization, and living
unit turnover or resale rates;

���������
(G)
�
A
description or analysis of costs and revenues throughout the development and
resident fill-up period of the proposed continuing care retirement community;

���������
(H)
�
Prospective
financial statements for the period commencing on the first day of the
applicant's current fiscal year through at least the fifth year of operation
which shall be prepared in accordance with standards adopted by the American
Institute of Certified Public Accountants;

���������
(I)
�
Any
other factors that, in the opinion of the preparer, will affect the feasibility
of the proposed continuing care retirement community;

���������
(J)
�
The
name of the person who prepared the feasibility study and the experience of the
person in preparing similar studies or otherwise consulting in the field of
continuing care; and

���������
(K)
�
An
evaluation and opinion by the person who prepared the feasibility study of the
underlying assumptions used as a basis for the study, including a statement on
whether the assumptions are reasonable and proper;

����
(3)
�
An
actuarial study prepared in accordance with accepted actuarial standards of
practice which estimates the earliest year that the proposed continuing care
retirement community is projected to be in satisfactory actuarial balance;
provided that applicants who do not or will not collect entrance fees or some
other prepayment of costs are exempt from this requirement and shall only be
required to submit an actuarial projection of future population flows and adult
care home bed and nursing bed needs; provided further that an actuarial
projection of future population flows and adult care home bed and nursing bed
needs shall use:

���������
(A)
�
Appropriate
mortality, morbidity, withdrawal, occupancy, and other demographic assumptions;
and

���������
(B)
�
A
projection period that extends to a point at which, in the actuary's
professional judgment, the use of a longer period would not materially affect
the results and conclusions;

����
(4)
�
An
updated disclosure statement that meets the requirements of section
-61;

����
(5)
�
At
least one of the following:

���������
(A)
�
Confirmation
of signed binding reservation agreements or continuing care contracts for at
least fifty per cent of the new independent living units, reserved by a deposit
equal to at least ten per cent of the entrance fee;

���������
(B)
�
Confirmation
of signed binding reservation agreements or continuing care contracts for at
least fifty per cent of the new independent living units, reserved by a
nonrefundable deposit equal to the periodic fee for at least two months for
proposed continuing care retirement communities that have no entrance fee; or

���������
(C)
�
Confirmation
of $100,000 placed on deposit with the commissioner, if the applicant does not
collect presale entrance fees or deposits in an amount equal to at least ten per
cent of the entrance fee or does not collect presale entrance fees or deposits
and does not collect nonrefundable deposits equal to the periodic fee of at
least two months; provided that this deposit is subject to the following
requirements:

��������������
(i)
�
The deposit shall only be returned to the applicant upon issuance
of a permanent license;

�������������
(ii)
�
The deposit shall be made in a form and amount determined by the
commissioner; and

������������
(iii)
�
The deposit shall automatically be forfeited if the applicant does
not obtain a permanent license within five years after the issuance of a
preliminary certificate; provided further that forfeited deposits shall be
remitted to the general fund; and

����
(6)
�
If
applicable, confirmation that commitments have been secured for construction
financing and long-term financing or that a documented plan acceptable to the commissioner
has been adopted by the applicant for long-term financing.

����
(b)
�
The commissioner shall comply with the review
schedule in section -24 in response to an application for a
preliminary certificate.

����
(c)
�
The commissioner shall approve an application
for a preliminary certificate if the following requirements are met:

����
(1)
�
The
application complies with this section;

����
(2)
�
None
of the grounds for denial listed in section -131 apply to the
applicant;

����
(3)
�
The
feasibility study meets the following requirements:

���������
(A)
�
Includes
in the prospective financial statements all obligations and liabilities to be
undertaken by the applicant pursuant to the terms of the proposed continuing
care contracts;

���������
(B)
�
Demonstrates
that the anticipated sources of funds to finance and operate the proposed
continuing care retirement community are equal to or greater than the
anticipated uses of funds to construct or acquire the proposed continuing care
retirement community and fund start-up losses and provide sufficient resources
to ensure full performance of the applicant's continuing care contract
obligations; and

���������
(C)
�
Demonstrates
that the continuing care retirement community is financially feasible;

����
(4)
�
A
market for the continuing care retirement community appears to exist, based on
data that meets the following requirements:

���������
(A)
�
Is
specific to the proposed continuing care retirement community;

���������
(B)
�
Considers
existing and proposed competition in the primary market area;

���������
(C)
�
Demonstrates
the existence of a market for the age, marital status, number, population
trends, net worth, home values, and income of the potential residents; and

���������
(D)
�
Demonstrates
that the rate of penetration in the proposed market area is within acceptable
industry ranges;

����
(5)
�
The
actuarial study, if applicable, projects that the proposed continuing care
retirement community will be in satisfactory actuarial balance within a
reasonable period of time after achieving stabilized occupancy, as determined
by the commissioner, or if no actuarial study is required, the actuarial
projection of future population flows demonstrates a sufficient number of adult
care home beds and nursing beds to meet the future needs of residents and the
future contractual obligations of the applicant, as determined by the commissioner;

����
(6)
�
The
applicant has met one of the requirements in paragraph (5);

����
(7)
�
If
applicable, the applicant has secured commitments for construction financing
and long-term financing or that a documented plan acceptable to the commissioner
has been adopted by the applicant for long-term financing; and

����
(8)
�
The
applicant demonstrates an ability to comply with this chapter and to provide
continuing care as proposed and meet all financial obligations related to its
operations.

����
(d)
�
After issuing a preliminary certificate, the commissioner
shall:

����
(1)
�
Require
the provider to submit periodic sales, development, and unaudited financial
statements in a form prescribed by the commissioner; and

����
(2)
�
Post
the disclosure statement of the continuing care retirement community on the commissioner's
website.

����
(e)
�
After receiving a preliminary certificate
from the commissioner, the provider may:

����
(1)
�
Construct
a continuing care retirement community; and

����
(2)
�
Convert
an existing structure or structures into a continuing care retirement
community.

����
� -23
�
Permanent license.
�
(a)
�
A
person may apply for a permanent license by submitting the following to the commissioner
for review:

����
(1)
�
A
statement signed by the applicant, under penalty of perjury, certifying that to
the best of the applicant's knowledge and belief, the items submitted in the
application are correct; provided that if the applicant is a corporation, the
chief executive officer or other authorized individual shall sign the statement;
provided further that if there are multiple applicants, these requirements
shall apply to each applicant;

����
(2)
�
An
updated disclosure statement that meets the requirements of section
-61;

����
(3)
�
Confirmation
that the applicant has established a plan to have health care available to
residents promised in continuing care contracts upon opening, either by the
applicant directly, or through contractual agreements;

����
(4)
�
At
least one of the following:

���������
(A)
�
Confirmation
of signed binding reservation agreements or continuing care contracts for at
least seventy per cent of the new independent living units, reserved by a
deposit equal to at least ten per cent of the entrance fee;

���������
(B)
�
Confirmation
of signed binding reservation agreements or continuing care contracts for at
least seventy per cent of the new independent living units, reserved by a
nonrefundable deposit equal to the periodic fee for at least two months for
proposed continuing care retirement communities that have no entrance fee; or

���������
(C)
�
Confirmation
of the $100,000 deposit required pursuant to section -22(a)(5)(C);

����
(5)
�
Confirmation
that the applicant has long-term financing in place, and if the applicant is
leasing the land or other real property of the continuing care retirement
community, confirmation that the lease is in place and, if applicable, that the
lease has been approved by the commissioner pursuant to section
-2;

����
(6)
�
Confirmation
that the applicant is in compliance with all other state, federal, municipal,
and county laws and regulations; provided that if the applicant is not in
compliance, the applicant shall include a statement that describes the nature
of the deficiency;

����
(7)
�
A
statement concerning any litigation, orders, judgments, or decrees which may
involve or impact the applicant or proposed continuing care retirement
community; and

����
(8)
�
Evidence
that the applicant has in place the operating reserve required by part XI of
this chapter.

����
(b)
�
The commissioner shall comply with the review
schedule in section -24 in response to an application for a
permanent license.

����
(c)
�
The commissioner shall approve an application
for a permanent license if the following requirements are met:

����
(1)
�
The
application complies with this section; and

����
(2)
�
None
of the grounds for denial listed in section -131 apply to the
applicant.

����
(d)
�
After receiving a permanent license from the commissioner,
the provider may:

����
(1)
�
Open
the continuing care retirement community; and

����
(2)
�
Provide
continuing care.

����
(e)
�
If the commissioner determines that the
requirements of subsection (c) are not met, the commissioner may:

����
(1)
�
Deny
the application; or

����
(2)
�
Issue
a restricted permanent license with an explanation of:

���������
(A)
�
The
restrictions established by the commissioner under subsection (f); and

���������
(B)
�
Conditions
the provider shall satisfy to qualify for a permanent license.

����
(f)
�
After receiving a restricted permanent
license from the commissioner, the provider may operate a continuing care
retirement community under restrictions established by the commissioner until
the commissioner issues a permanent license. When the commissioner issues a
restricted permanent license, the provider shall inform all depositors and
residents within ten business days of all restrictions imposed by the
restricted permanent license and all conditions that the provider shall satisfy
to qualify for a permanent license.

����
(g)
�
After issuing a permanent license or
restricted permanent license, the commissioner shall:

����
(1)
�
Require
the provider to submit periodic occupancy reports and financial statements in a
form prescribed by the commissioner; and

����
(2)
�
Post
the disclosure statement of the continuing care retirement community on the commissioner's
website.

����
(h)
�
A permanent license or restricted permanent
license shall be valid for as long as the commissioner determines that the
provider continues to meet the requirements of this chapter.

����
� -24
�
Review schedule.
�
The commissioner shall comply with the
following schedule in response to an application for a permit to accept
deposits, a start-up certificate, a preliminary certificate, a permanent
license, an expansion, a continuing care at home license, an expansion
notification, and a request for approval pursuant to section -110,
-111, and -112:

����
(1)
�
Within
five business days after receipt of an application, a notification, a request
for approval, or of materials intended to supplement an incomplete application,
notification, or request for approval, the commissioner shall acknowledge
receipt in writing;

����
(2)
�
Within
ten business days after receipt of an application for a permit to accept
deposits, permanent license, and an expansion notification, or of materials
intended to supplement an incomplete application or expansion notification, and
within thirty days after receipt of an application for a start-up certificate,
a preliminary certificate, a continuing care at home license, and an expansion,
or a request for approval, or of materials intended to supplement an incomplete
application or request for approval, the commissioner shall determine if the
application, notification, or request for approval is complete and inform the
applicant in writing of the determination; provided that if the commissioner
determines that the application, notification, or request for approval is
incomplete, the notice to the applicant shall specifically set forth and
request any additional information the commissioner determines is necessary to
complete the application, notification, or request for approval; and

����
(3)
�
When
the commissioner determines an application, notification, or request for
approval is complete, the commissioner shall approve or deny the application,
notification, or request for approval as follows:

���������
(A)
�
Within
five business days for a permit to accept deposits and an expansion
notification;

���������
(B)
�
Within
thirty days for a start-up certificate, permanent license, continuing care at
home license, expansion, and a request for approval; and

���������
(C)
�
Within
forty-five days for a preliminary certificate.

����
� -25
�
Expiration of a permit to accept deposits
and start-up certificate.
�
(a)
�
A permit to accept deposits and a start-up
certificate issued pursuant to this chapter shall expire thirty-six months
after issuance.

����
(b)
�
A provider issued a permit to accept deposits
or a start-up certificate may request an extension of the permit or
certificate.
�
The request for extension
shall be made in writing and include:

����
(1)
�
The
reasons why the provider has not applied for a start-up certificate or
preliminary certificate, as applicable; and

����
(2)
�
The
estimated date the provider expects to file the start-up certificate
application or the preliminary certificate application, as applicable.

����
(c)
�
In response to a request for an extension,
the commissioner shall, if the commissioner determines that:

����
(1)
�
There
is satisfactory cause for the delay, the commissioner shall extend the permit
to accept deposits or a start-up certificate for up to one year and may, in the
commissioner's discretion, require the provider to update information
previously filed pursuant to section -20 or section -21
before approving any extension.
�
There shall
not be a limit to the number of extensions that may be granted by the commissioner;
or

����
(2)
�
There
is no satisfactory cause for the delay, the commissioner shall instruct the
escrow agent to refund to depositors all deposits held in escrow, plus any
interest that may be due under the terms of any nonbinding reservation
agreement, binding reservation agreement, or continuing care contract.

����
(d)
�
Within ten business days of the commissioner's
denial of an extension, the provider shall notify each depositor of the commissioner's
denial of the extension, of the expiration of the permit to accept deposits or
a start-up certificate, and of any right to a refund of their deposits.

����
� -26
�
Denial of an application, notification, or
other request for approval.
�
(a)
�
If the commissioner denies an application,
notification, or any other request for approval pursuant to this chapter, the commissioner
shall notify the applicant in writing of the denial.
�
The notification shall state the grounds for
the denial.
�
To obtain a review of the commissioner's
denial, the applicant shall make written demand upon the commissioner within thirty
days after service upon the applicant of notification of the denial.
�
The review shall be completed without undue
delay, and the applicant shall be notified promptly in writing as to the
outcome of the review.
�
If the applicant
disagrees with the outcome of the review and seeks a hearing under chapter 91,
the applicant shall make a written demand upon the commissioner for the hearing
within thirty days after service upon the applicant of the notification of the
outcome.

����
(b)
�
If the commissioner denies an application,
notification, or other request for approval pursuant to this chapter, no
portion of the fee associated with the application, notification, or request
for approval shall be refunded.

PART

III.
�
E
xpansion

����
� -30
�
Expansion notification.
�
(a)
�
Before
marketing and collecting deposits for a proposed expansion of a continuing care
retirement community that is twenty per cent or more of existing independent
living units, a provider shall:

����
(1)
�
Notify
and obtain written approval from the commissioner; and

����
(2)
�
Notify
all residents in writing of the provider's intent to expand the number of
independent living units at the continuing care retirement community; provided
that this notification shall include the description required by paragraph
(b)(1).

����
(b)
�
The expansion notification to the commissioner
required by this section shall include:

����
(1)
�
A
description of the proposed expansion project, including the number of
independent living units to be added;

����
(2)
�
If
the provider intends to enter into nonbinding reservation agreements, binding
reservation agreements, or both, a copy of the proposed agreements that the
provider intends to use;

����
(3)
�
A
proposed escrow agreement that meets the requirements of section -41;
and

����
(4)
�
An
updated disclosure statement that meets the requirements of section
-61.

����
(c)
�
The commissioner shall comply with the review
schedule in section -24 in response to an expansion
notification.

����
(d)
�
The commissioner shall approve the expansion
notification if the following requirements are met:

����
(1)
�
The
expansion notification complies with this section;

����
(2)
�
None
of the grounds for denial listed in section -131 apply to the
provider;

����
(3)
�
The
proposed escrow agreement meets the requirements of section -41;
and

����
(4)
�
The
proposed escrow agent and depository are acceptable in accordance with section -40.

����
(e)
�
After the commissioner approves the expansion
notification, the provider shall submit periodic sales and development reports
to the commissioner in a form prescribed by the commissioner.

����
(f)
�
After the commissioner approves the expansion
notification, the provider may:

����
(1)
�
Disseminate
materials, including advertisements, describing the intent to expand the number
of independent living units at the continuing care retirement community;

����
(2)
�
Enter
into nonbinding reservation agreements, binding reservation agreements, and
continuing care contracts for the proposed independent living units; and

����
(3)
�
Collect
entrance fees and deposits for the proposed independent living units; provided
that all deposits collected shall be placed in escrow and shall only be
released in accordance with part IV of this chapter, unless otherwise exempted
by the commissioner.

����
� -31
�
Expansion application.
�
(a)
�
Before
commencing construction of an expansion of a continuing care retirement
community that is twenty per cent or more of existing independent living units,
a provider shall:

����
(1)
�
Receive
commissioner approval of an expansion notification pursuant to section
-30; and

����
(2)
�
Apply
to the commissioner for approval to commence construction.

����
(b)
�
The application required by this section
shall include:

����
(1)
�
An
application fee of $1,000;

����
(2)
�
A
feasibility study, prepared by an independent person experienced in preparing
feasibility studies for continuing care retirement communities, with financial,
marketing, and actuarial assumptions that projects the market and financial
viability of the proposed expansion; provided that the study shall include:

���������
(A)
�
A
description of the applicant's proposed expansion project, including the number
of independent living units being added, fee structure, a description of how
the projected fees were computed, and the anticipated project time line; and

���������
(B)
�
A
description of the construction plans, construction financing, and permanent
financing for the proposed expansion project, including:

��������������
(i)
�
A description of all debt to be incurred by the applicant,
including the source, anticipated terms, and costs of financing;

�������������
(ii)
�
A description of the source and amount of any equity to be
contributed by the applicant;

������������
(iii)
�
A description of the source and amount of all other funds,
including entrance fees, that will be necessary to complete and operate the
proposed expansion;

�������������
(iv)
�
A statement itemizing all estimated project costs, including the
real property costs, the cost of designing and constructing the proposed
expansion, and all similar costs that the applicant expects to incur prior to
the opening of the expansion; provided that this itemization shall identify all
costs related to the proposed expansion, including financing expenses, resident
acquisition costs, marketing costs, and furniture, fixtures, and equipment; and

��������������
(v)
�
An estimate of any reserves required by financing and the operating
reserve required pursuant to part XI of this chapter;

���������
(C)
�
An
analysis of the potential market for the proposed expansion, addressing:

��������������
(i)
�
The population, household growth, age distribution, household
income, household tenure, and resale housing values within the primary market
area;

�������������
(ii)
�
A demand analysis of the range of likely target consumers within
the primary market area as well as estimated penetration rates;

������������
(iii)
�
An economic analysis of current market conditions and trends that
can impact the feasibility of the proposed expansion, positively or negatively,
including real estate, income, employment, and the general economic outlook for
the primary market area and surrounding areas; and

�������������
(iv)
�
Existing and planned competition in the primary market area;

���������
(D)
�
A
description of the sales and marketing plan, including:

��������������
(i)
�
Marketing projections, anticipated sales, and cancellation rates;

�������������
(ii)
�
Month-by-month projections of independent living unit sales through
stabilized occupancy;

������������
(iii)
�
A description of the marketing methods, staffing, and advertising
media to be used by the applicant; and

�������������
(iv)
�
An estimate of the total entrance fees to be received;

���������
(E)
�
Projected
move-in rates and resident profiles, adult care home bed and nursing bed
utilization, and living unit turnover or resale rates;

���������
(F)
�
A
description or analysis of costs and revenues throughout the development and
resident fill-up period of the proposed expansion;

���������
(G)
�
Five-year
prospective financial statements of the applicant which shall be prepared in
accordance with standards adopted by the American Institute of Certified Public
Accountants;

���������
(H)
�
Any
other factors that, in the opinion of the preparer, will affect the feasibility
of the expansion;

���������
(I)
�
The
name of the person who prepared the feasibility study and their experience in
preparing similar studies or otherwise consulting in the field of continuing
care; and

���������
(J)
�
An
evaluation and opinion by the person who prepared the feasibility study of the
underlying assumptions used as a basis for the study, including a statement
whether the assumptions are reasonable and proper;

����
(3)
�
An
actuarial study prepared in accordance with accepted actuarial standards of
practice which estimates when the continuing care retirement community is
projected to be in satisfactory actuarial balance once stabilized occupancy of
the expansion is achieved; provided that applicants who do not collect entrance
fees or some other type of up-front prepayment of costs are exempt from this
requirement and shall only be required to submit an actuarial projection of
future population flows and adult care home bed and nursing bed needs; provided
further that an actuarial projection of future population flows and adult home
care bed and nursing bed needs shall use appropriate mortality, morbidity,
withdrawal, occupancy, and other demographic assumptions and a projection
period that extends to a point at which, in the actuary's professional
judgment, the use of a longer period would not materially affect the results
and conclusions;

����
(4)
�
An
updated disclosure statement that meets the requirements of section
-61;

����
(5)
�
If
applicable, confirmation that the applicant has secured commitments for
construction financing and long-term financing or that a documented plan
acceptable to the commissioner has been adopted by the applicant for long-term
financing;

����
(6)
�
If
the expansion includes any land or other real property that is to be leased,
confirmation, if applicable, that the lease has been approved by the commissioner
pursuant to section -4; and

����
(7)
�
Any
other data and pertinent information as the commissioner may reasonably require
with respect to the applicant or the continuing care retirement community to
determine the feasibility of the expansion.

����
(c)
�
The commissioner shall comply with the review
schedule in section -24 in response to an expansion
application.

����
(d)
�
The commissioner shall approve the expansion
application if the following requirements are met:

����
(1)
�
The
expansion application complies with this section;

����
(2)
�
None
of the grounds for denial listed in section -131 apply to the
applicant;

����
(3)
�
The
feasibility study meets the following requirements:

���������
(A)
�
Includes
in the prospective financial statements all current obligations and liabilities
of the applicant as well as those to be undertaken by the applicant;

���������
(B)
�
Demonstrates
that the expansion is financially viable and will not have an unreasonably
adverse effect on the financial ability of the applicant to furnish continuing
care; and

���������
(C)
�
Demonstrates
the existence of a market for the proposed expansion based on reliable data,
which meets the following requirements:

��������������
(i)
�
Is specific to the continuing care retirement community;

�������������
(ii)
�
Considers existing and proposed competition in the primary market
area; and

������������
(iii)
�
Demonstrates that the rate of penetration in the proposed market
area is within acceptable industry ranges;

����
(4)
�
The
applicant demonstrates the ability to provide continuing care and meet all
financial and contractual obligations related to its operations, including the
financial requirements of this chapter;

����
(5)
�
The
applicant, if applicable, has secured commitments for construction financing
and long-term financing or that a documented plan acceptable to the commissioner
has been adopted by the applicant for long-term financing; and

����
(6)
�
The
actuarial study, if applicable, projects that the continuing care retirement
community will be in satisfactory actuarial balance within a reasonable period
of time once stabilized occupancy of the expansion is achieved, or if no
actuarial study is required, the actuarial projection of future population
flows demonstrates a sufficient number of adult care home beds and nursing beds
to meet the needs of residents and the contractual obligations of the
applicant.

����
(e)
�
After the commissioner approves the expansion
application, the provider shall submit periodic sales and development reports
to the commissioner in a form prescribed by the commissioner to monitor the
expansion project.

����
(f)
�
After the commissioner approves the expansion
application, the provider may commence construction of the new independent
living units at the continuing care retirement community as proposed and, upon
completion of construction and the satisfaction of all other legal requirements,
open the expansion and provide continuing care to the residents of the new
independent living units.

����
� -32
�
Expansion entrance fees and deposits.
�
All entrance fees and deposits collected for
independent living units in an expansion requiring commissioner approval under
this part shall be placed in an escrow account in accordance with part IV of
this chapter unless otherwise exempted by the commissioner.

PART

IV.
�
Escrow
A
ccount

����
� -40
�
Escrow account required.
�
All entrance fees and deposits, when required
by this chapter, shall be deposited by the provider in an escrow account and
shall be maintained in a segregated account without any commingling with other
funds, including any funds or accounts owned by the provider.
�
The escrow agent and all terms governing an
escrow account shall be approved in advance by the commissioner.

����
� -41
�
Escrow agreement requirements.
�
The escrow agreement between an applicant or
a provider and the escrow agent shall be in writing and include, in addition to
any other provisions required by law, the following:

����
(1)
�
A
provision requiring that all funds received shall be placed into the escrow
account in accordance with section -43;

����
(2)
�
A
provision for investment of escrow account funds in a manner consistent with section
-44;

����
(3)
�
A
provision regarding the payment of interest earned on the funds held in the
escrow account in the manner specified in section -45;

����
(4)
�
A
provision for refunds to depositors in the manner specified by section
-47;

����
(5)
�
A
provision that any refund or release of escrow account funds be performed in
the manner specified in section -47 and -48,
including a statement as to whom payment of interest earned on the funds will
be made;

����
(6)
�
A
statement that the purpose of the escrow agreement is to protect residents and
prospective residents;

����
(7)
�
The
amount of the escrow agent fee;

����
(8)
�
A
provision that funds deposited shall not be subject to any liens or charges by
the escrow agent;

����
(9)
�
A
provision requiring the escrow agent to furnish the provider with a monthly
statement indicating the amount of any disbursements from or deposits to the
escrow account and the condition of the account during the monthly period
covered by the statement;

���
(10)
�
A
provision requiring the escrow agent to furnish to the commissioner, upon the
request of the commissioner, periodic reports, including the monthly statement
required pursuant to paragraph (9), certifying the amount of funds held on
deposit;

���
(11)
�
A
provision requiring the escrow agent to furnish to a depositor, upon the
request of a depositor, a statement indicating the depositor's portion of the
escrow account; and

���
(12)
�
Representations
by the escrow agent that it is not and shall not be during the term of the
escrow agreement, a related party of the provider, a lender to the provider, or
a fiduciary for any lender or bondholder for the provider, unless approved by
the commissioner.

����
� -42
�
Changes to escrow agreement.
�
All changes to an escrow agreement shall be
submitted to, and approved by, the commissioner before use by a provider.

����
� -43
�
Entrance fee and deposit delivery to the
escrow agent.
�
(a)
�
The provider shall deliver to the escrow
agent any entrance fees or deposits required to be maintained in an escrow
account pursuant to this chapter within ten business days after receipt by the
provider.

����
(b)
�
Any deposit delivery to an escrow agent
pursuant to this chapter shall be accompanied with a copy of the executed
nonbinding reservation agreement, binding reservation agreement, or continuing
care contract, a copy of the receipt given to the depositor, a summary of all
deposits made on that date, and any other materials required by the escrow
agent.

����
� -44
�
Investment of funds in escrow.
�
(a)
�
All
entrance fees and deposits subject to an escrow agreement under this chapter
shall be maintained by the escrow agent in one of the following manners:

����
(1)
�
Investment
in an interest-bearing account;

����
(2)
�
Investment
in instruments guaranteed by the federal government or an agency of the federal
government; or

����
(3)
�
Investment
in investment funds secured by federally guaranteed instruments.

����
(b)
�
Any investment shall not diminish the funds
held in escrow below the amounts required by this chapter.

����
� -45
�
Earnings from funds in escrow.
�
(a)
�
Interest,
income, and other gains derived from funds held in an escrow account shall not
be released or distributed from the escrow account except upon written approval
of the commissioner.

����
(b)
�
Approval by the commissioner for the release
of earnings generated from funds held in escrow shall be based upon an
assessment that funds remaining in the escrow account meet the requirements of
this chapter and, if applicable, will be sufficient to pay refunds and any
interest promised to all depositors.

����
(c)
�
When release of earnings is approved by the commissioner,
interest earned by the funds in the escrow account shall be distributed to the
provider or depositors in accordance with the terms of the continuing care
contract, binding reservation agreement, or nonbinding reservation agreement.

����
� -46
�
Escrowed funds not to be used as
collateral.
�
No funds held in an
escrow account shall be encumbered or used as collateral for any obligation of
the provider, or any other person, unless the provider obtains prior written
approval from the commissioner for the encumbrance or use as collateral.
�
The commissioner shall not approve any
encumbrance or use as collateral under this section unless the encumbrance or
use as collateral is expressly subordinated to the rights of depositors under
this chapter to refunds of their entrance fees or deposits.

����
� -47
�
Refunds of escrowed entrance fees and
deposits.
�
(a)
�
An escrow agent shall refund to a depositor,
or their legal representative, all amounts required by the depositor's
nonbinding reservation agreement, binding reservation agreement, or continuing
care contract upon receiving written notice from the provider of any of the
following:

����
(1)
�
The
death of a depositor;

����
(2)
�
Nonacceptance
by the provider;

����
(3)
�
Voluntary
cancellation;

����
(4)
�
The
denial of an application pursuant to this chapter; or

����
(5)
�
Written
notice from the commissioner.

����
(b)
�
Refunds required in subsection (a) shall be
paid within ten business days after the escrow agent receives the written
notice described in subsection (a).

����
(c)
�
If voluntary cancellation of a continuing
care contract or a binding reservation agreement occurs after construction of
the continuing care retirement community or expansion of a continuing care
retirement community has begun, but before the independent living unit's
initial occupancy, the refund may be delayed until another depositor has
reserved a similar independent living unit and paid the necessary entrance fee
or deposit.
�
This delay shall not exceed
one year, unless the time period is extended by the commissioner upon a showing
of good cause by the provider.

����
� -48
�
Release of escrowed entrance fees and
deposits.
�
(a)
�
To request a release of the first twenty-five
per cent of each escrowed entrance fee and deposit, a provider shall petition
in writing to the commissioner and certify that:

����
(1)
�
The
provider has presold at least fifty per cent of the proposed independent living
units, having received a minimum ten per cent deposit of the total of each
applicable entrance fee and placed it in escrow. Any independent living unit
for which a refund is pending shall not be counted toward the fifty per cent
requirement;

����
(2)
�
The
provider has long-term financing in place for the proposed continuing care
retirement community or expansion, or if the provider is leasing the land or
other real property of the continuing care retirement community, certification
that the lease is in place and, if applicable, that the lease has been approved
by the commissioner pursuant to section -4; and

����
(3)
�
For
a proposed continuing care retirement community, the aggregate entrance fees
received or receivable by the provider pursuant to binding reservation
agreements and continuing care contracts, plus the anticipated proceeds of any
first mortgage loan or other long-term financing commitment, plus any equity
being contributed by the provider or a related party, are equal to not less
than ninety per cent of the following amount:

���������
(A)
�
The
aggregate cost of constructing or purchasing, equipping, and furnishing the
proposed continuing care retirement community;

���������
(B)
�
Plus
not less than ninety per cent of the funds estimated to be necessary to fund
start-up losses and to reasonably assure full performance of the provider's
future continuing care obligations, as reported in the statement of cash flows
required by section -61(a)(37).

����
(b)
�
To request a release of the remaining
seventy-five per cent of escrowed entrance fees and deposits, a provider shall
petition in writing to the commissioner and certify that:

����
(1)
�
The
provider has presold at least seventy per cent of the proposed independent
living units, having received a minimum ten per cent deposit of each applicable
entrance fee and maintains at least seventy-five per cent of each entrance fee
or deposit received in escrow, or has maintained an independent living unit
occupancy minimum of seventy per cent for at least sixty days; provided that any
independent living unit for which a refund is pending shall not be counted
toward the seventy per cent requirement;

����
(2)
�
Construction
or purchase of the independent living units has been completed and an occupancy
permit, if applicable, has been issued by the local government having authority
to issue those permits; and

����
(3)
�
The
independent living units are available for occupancy by the new residents.

����
(c)
�
The commissioner shall instruct the escrow
agent in writing to release to the provider entrance fees and deposits in the
escrow account only when the commissioner has confirmed the information
provided by the provider pursuant to subsection (a) or (b).

����
(d)
�
The escrow agent shall release the entrance
fees and deposits held in the escrow account to the provider only when the commissioner
has instructed it to do so in writing.

����
(e)
�
When a provider discloses in an application
that construction will be completed and commence operating in different phases,
the commissioner shall apply the requirements in subsections (a) and (b) to any
one or group of phases requested by the provider, provided the provider
demonstrates in the prospective financial statements filed with the application
that the phase or group of phases is financially viable without the need for
any additional phases.

����
(f)
�
For the purposes of this section, a refund is
pending if a depositor has canceled a continuing care contract or a binding
reservation agreement but has not yet received a refund, either because of
timing or because another depositor has not reserved a similar independent
living unit and paid the necessary entrance fee or deposit to trigger a refund
to the canceling depositor.

PART V.
�
Disclosure
Statement

����
� -60
�
Definitions.
�
As used in this part:

����
"Adjusted
net operating margin ratio" means a profitability ratio that measures the
margin generated from the core operations of a provider and net cash proceeds
from entrance fees; provided that the quotient is calculated by dividing the
sum of resident operating income and net proceeds from entrance fees by the sum
of resident revenue and net cash proceeds from entrance fees.

����
"Average
daily cash operating expenses" means the total expenses of a provider
incurred in the conduct of the provider's business over a defined period of
time, divided by the number of days in that period.
�
For the purposes of this definition,
"total expenses" includes interest expense, but excludes depreciation
expense, amortization expense, realized or unrealized nonoperating losses or
expenses, bad debt expense, and other noncash expenses.

����
"Capital
expenditures as a percentage of depreciation ratio" means a capital
structure ratio that indicates the level of capital reinvestment by a provider;
provided that the quotient is computed by dividing total purchases of property,
plant, and equipment by total depreciation expense.

����
"Cushion
ratio" means a liquidity ratio that measures a provider's ability to pay
its annual debt service using its unrestricted cash and investments; provided
that the quotient is computed by dividing unrestricted cash and investments by
annual debt service.

����
"Days
cash on hand ratio" means a liquidity ratio that measures the number of
days of cash operating expenses a provider could cover using its existing
unrestricted cash and investments; provided that the quotient is computed by
dividing unrestricted cash and investments by average daily cash operating
expenses.

����
"Multi-entity
organization" means a collection of distinct legal entities that are under
common control.

����
"Net
operating margin ratio" means a profitability ratio that measures the
margin generated from the core operations of a provider; provided that the
quotient is calculated by dividing resident operating income by resident
revenue.

����
"Operating
ratio" means a profitability ratio that measures whether current year cash
operating revenues are sufficient to cover current year cash operating expenses
without the inclusion of cash from entrance fee receipts; provided that the
quotient is computed by dividing total operating expenses, excluding
depreciation expense and amortization expense, by total operating revenues,
excluding amortization of entrance fees and other deferred revenue.

����
"Resale
fee" means a contractual assessment by the provider against the proceeds
from the sale of an independent living unit.

����
"Resident
expense" means total operating expenses excluding interest expense,
depreciation expense, amortization expense, and income taxes.

����
"Resident
revenue" means total operating revenue excluding interest and dividend
income, entrance fee amortization, and contributions.

����
"Unrestricted
cash and investments" means the sum of the provider's unrestricted cash,
cash equivalents and investments, and any provider restricted funds that are
available to pay debt or to pay operating expenses.
�
For the purposes of this definition, the
assets serving as the operating reserve required by section
-120 shall be considered unrestricted.

����
"Unrestricted
cash and investments to long-term debt ratio" means a capital structure
ratio that measures:

����
(1)
�
A
provider's position in available cash and marketable securities in relation to
its long-term debt; and

����
(2)
�
A
provider's ability to withstand annual fluctuations in cash;

provided that the quotient is
calculated by dividing unrestricted cash and investments by total long-term
debt, less the current portion of long-term debt.

����
� -61
�
Disclosure statement.
�
(a)
�
A
provider shall prepare a disclosure statement for each continuing care
retirement community operated or to be operated in the State that includes:

����
(1)
�
The
name, business address, and telephone number of the provider and a statement of
whether the provider is a partnership, corporation, or other type of legal
entity;

����
(2)
�
A
statement disclosing whether the provider is for-profit or nonprofit, and if
nonprofit, the provision of the federal Internal Revenue Code under which the
provider is exempt from the payment of income tax, and a statement disclosing
whether the provider is current on all tax filings;

����
(3)
�
A
statement disclosing whether the provider is privately owned or publicly owned;

����
(4)
�
A
statement disclosing whether the provider is part of a multi-entity
organization, and if so, both of the following:

���������
(A)
�
A
statement indicating whether the audited financial statements required by paragraph
(36) are prepared on a consolidated basis with all entities included and, if
not, a statement indicating how the audited financial statements are prepared;
and

���������
(B)
�
A
company structure chart showing the provider's relationship with the other
entities in the multi-entity organization;

����
(5)
�
A
statement identifying the controlling person of the provider, if control does
not exist with the provider, including the controlling person's business
address;

����
(6)
�
The
name, business address, education, work experience, and length of service with
the provider or the provider's controlling person of:

���������
(A)
�
All
officers, directors, trustees, managers, managing or general partners of the
provider and, if applicable, the provider's controlling person, and any person
having a ten per cent or greater equity or beneficial interest in the provider
or the provider's controlling person; and

���������
(B)
�
Any
person who will be managing the continuing care retirement community on a
day-to-day basis, and a description of the person's interest in or occupation
with the provider or controlling person; provided that if any person required
to be named pursuant to this paragraph does not have a business address or uses
this person's home address as the person's business address, the provider shall
list the address of the provider as the person's business address; provided
further that a provider shall not disclose the personal address of any person
required to be named pursuant to this paragraph, unless required to do so by
another provision of law or a court order;

����
(7)
�
The
following information on all persons named in response to paragraphs (1), (5),
and (6):

���������
(A)
�
A
description of the person's business experience, if any, in the operation or
management of a continuing care retirement community;

���������
(B)
�
The
name and address of any professional service firm, association, trust,
partnership, or corporation in which this person has, or which has in this
person, a ten per cent or greater interest and which it is presently intended
shall currently or in the future provide goods, leases, or services to the
provider of an aggregate value of $5,000 or more within any fiscal year,
including a description of the goods, leases, or services and the actual or
probable cost to the provider, or a statement that this cost cannot presently
be estimated and the reason why it cannot be presently estimated; and

���������
(C)
�
A
description of any matter in which the person:

��������������
(i)
�
Has been convicted of any felony or pleaded nolo contendere to a
felony charge;

�������������
(ii)
�
Has been held liable or enjoined in a civil action by final
judgment involving fraud, embezzlement, fraudulent conversion, or
misappropriation of property; or

������������
(iii)
�
Is subject to a currently effective injunctive or restrictive court
order, or within the past five years, had any state or federal license or
permit suspended or revoked as a result of an action brought by a governmental
agency or department;

����
(8)
�
A
summary of the role and responsibilities of the board of directors or other
governing body of the provider and, if applicable, the provider's controlling
person, including how the members of the board of directors or other governing
body are selected and their responsibilities;

����
(9)
�
A
statement disclosing whether any related party provides, or will provide in the
case of a continuing care retirement community under development, goods,
leases, or services to the provider of an aggregate value of $5,000 or more
within any fiscal year, not already disclosed pursuant to paragraph (7) or
(15), and a description of the goods, leases, or services and the actual or
probable cost to the provider, or a statement that this cost cannot presently
be estimated and the reason why it cannot be presently estimated;

���
(10)
�
A
statement indicating whether the provider has a relationship with any
religious, charitable, or other organization or person, along with the nature
and extent of that relationship;

���
(11)
�
The
name of any other person who will be responsible for the financial and
contractual obligations of the provider not already disclosed and the extent of
their responsibility;

���
(12)
�
A
statement as to whether the provider is, or will be, a part of an obligated
group and, if so, the names of the other persons in, or to be in, the obligated
group;

���
(13)
�
A
statement as to whether the provider, or any obligated group that the provider
is a part of, is not in compliance with any covenant contained in any debt
agreement and, if not in compliance, specifying each failure to comply and the
steps being taken to cure the noncompliance;

���
(14)
�
A
statement indicating whether the provider currently employs or will employ a
third-party manager for the continuing care retirement community and, if so,
the name of the third-party manager employed and their experience in providing
management services within the continuing care retirement community industry;

���
(15)
�
If
the provider is leasing or intends to lease from another person any part of the
real property of the continuing care retirement community, a statement
disclosing the parties to the lease, the original lease term, and the remaining
term of the lease;

���
(16)
�
A
statement as to whether the provider has endowment funds or has endowment funds
available through a related party, that are available to provide financial aid
to residents, including a description of the funds and any restrictions on
their use;

���
(17)
�
The
name, address, and description of the physical property or properties of the
continuing care retirement community, existing or proposed, and to the extent
proposed, the estimated completion date or dates, whether construction has
begun, and the contingencies subject to which construction may be deferred;

���
(18)
�
The
number of existing living units, or the number of living units to be
constructed, at the continuing care retirement community;

���
(19)
�
If
the provider is licensed to provide continuing care at home, a description of
the continuing care at home program, including the primary market area served;

���
(20)
�
The
number or estimated number of residents of the continuing care retirement
community to be provided services by the provider pursuant to a continuing care
or continuing care at home contract;

���
(21)
�
The
twelve-month daily average occupancy rate at the continuing care retirement
community, by living unit type, as of the provider's fiscal year-end for the
past five years or for each year of the continuing care retirement community's
operation if it has been in operation for less than five years;

���
(22)
�
A
statement indicating whether the provider held the semiannual meetings required
by section -162 during the previous fiscal year, including
the dates held;

���
(23)
�
A
description of any property rights of residents in the real property of the
continuing care retirement community;

���
(24)
�
The
services provided or proposed to be provided pursuant to continuing care and
continuing care at home contracts, including the extent to which health care is
furnished, and a clear statement of which services are included for specified
periodic fees and which services are or will be made available for an extra
charge; provided that the description shall include a statement describing what
health care services are or will be provided by the provider directly and what
health care services are or will be provided through a contract with a third
party;

���
(25)
�
A
description of all nonancillary fees required of residents, including entrance
fees, periodic fees, transfer fees, and resale fees, if any.
�
The description shall include:

���������
(A)
�
A
statement of the fees that will be charged if a resident marries or otherwise
increases the number of persons residing in the resident's living unit while a
resident of the continuing care retirement community, and a statement of the
terms concerning the entry of a spouse or other person to the continuing care
retirement community and the consequences if the spouse or other person does
not meet the requirements for entry;

���������
(B)
�
The
manner by which the provider may adjust periodic fees and the limitations on
the adjustments, if any; and, if the continuing care retirement community is
already in operation, a table showing the frequency, average per cent increase,
and average dollar amount of each increase in periodic fees for the previous
five years, or for each year of the continuing care retirement community's and,
if applicable, continuing care at home program's operation if it has been in
operation for less than five years; provided that if the continuing care
retirement community is not yet in operation, the provider shall include a
table showing the expected frequency, average per cent increase, and average
dollar amount of each increase in periodic fees utilized in the five-year
prospective financial statements required pursuant to paragraph (37); and

���������
(C)
�
A
table showing the current entrance fee charges as well as the frequency,
average per cent increase, and average dollar amount of each increase in
entrance fees for the previous five years, or for each year of the continuing
care retirement community and, if applicable, continuing care at home program's
operation if it has been in operation for less than five years; provided that if
the continuing care retirement community is not yet in operation, the provider
shall include a table showing the expected frequency, average per cent
increase, and average dollar amount of each increase in entrance fees utilized
in the five-year prospective financial statements required pursuant to paragraph
(37);

���
(26)
�
For
providers who offer refundable entrance fee continuing care or continuing care
at home contracts, a statement disclosing:

���������
(A)
�
The
conditions that shall be met before all or any portion of an entrance fee will
be refunded; and

���������
(B)
�
The
number and aggregate dollar amount of refundable entrance fee refunds that, as
of the provider's most recent fiscal year-end:

��������������
(i)
�
Will be due once all contractual conditions are met;

�������������
(ii)
�
Are currently due, including a disclosure of the number and
aggregate dollar amount of refunds that are thirty or more days past due;

������������
(iii)
�
Will be due, once all conditions are met, to residents who have
permanently vacated their independent living unit and now reside in a
non-independent living unit provided by the provider; or

�������������
(iv)
�
Will be due to residents who have permanently vacated their
independent living unit and now reside in a non-independent living unit
provided by the provider whose former independent living unit has already been
resold;

���
(27)
�
The
circumstances under which a resident will be authorized to remain a resident at
the continuing care retirement community in the event of possible financial
difficulties of the resident;

���
(28)
�
The
terms and conditions under which a continuing care and continuing care at home
contract may be canceled by the provider, or by the resident, and the
conditions, if any, under which all or any portion of the entrance fee or any
other fee will be refunded in the event of cancellation of the continuing care
or continuing care at home contract by the provider, or by the resident, or in
the event of the death of the resident, prior to, or following, occupancy of a
living unit or the start of services not already disclosed in paragraph (26);

���
(29)
�
The
conditions under which a living unit occupied by a resident may be made
available by the provider to a different or new resident other than on the
death of the prior resident;

���
(30)
�
The
conditions or circumstances under which a provider may require a resident to
move from the resident's living unit to another living unit for the safety of
the resident or for the good of the provider;

���
(31)
�
The
health and financial condition required for an individual to be accepted as a
resident and to continue as a resident once accepted, including the effect of
any change in the health or financial condition of a person between the date of
entering into a continuing care or continuing care at home contract and the
date of initial occupancy of a living unit or the start of services;

���
(32)
�
Any
age and insurance requirements for admission;

���
(33)
�
The
provisions that have been made or will be made, including the requirements of section
-40 and section -120, to provide reserve
funding or security to enable the provider to refund entrance fees and deposits
when due and to fulfill all of its other obligations under binding reservation
agreements, continuing care contracts, and continuing care at home contracts,
including the establishment of escrow accounts, trusts, or reserve funds,
together with the manner in which these funds will be invested, and the names
and experience of any person or persons who will make the investment decisions;
provided that the information provided shall also include a schedule detailing
how the operating reserve for the continuing care retirement community has been
calculated which shall agree with the amount calculated and reported to the commissioner
pursuant to section -125;

���
(34)
�
A
description of any expansion, renovation, or planned expansion or renovation of
the continuing care retirement community;

���
(35)
�
An
explanation if the provider's most recent audited financial statements were not
prepared within on hundred fifty days or if an audit opinion was received other
than an unqualified opinion;

���
(36)
�
Audited
financial statements meeting the requirements of section -91;

���
(37)
�
Five-year
prospective financial statements of the provider that are either compiled or
examined by an independent certified public accountant, that can be prepared on
a stand-alone basis, or consolidated or combined with the same persons as the
annual audited financial statements filed with the commissioner pursuant to section
-91, and that includes:

���������
(A)
�
A
summary of significant assumptions and a summary of significant accounting
policies;

���������
(B)
�
If
financial projections, an identification of the hypothetical assumptions and a
description of the limitations on the usefulness of the presentation;

���������
(C)
�
As
supplemental information, if prepared on a consolidated or combined basis, a
consolidating or combining:

��������������
(i)
�
Balance sheet;

�������������
(ii)
�
Statement of operations and changes in net assets or equity; and

������������
(iii)
�
Statement of cash flows;

���������
(D)
�
A
statement of operations as supplemental information for each continuing care
retirement community operated under this chapter if the provider operates more
than one continuing care retirement community or has operations that are
separate and distinct from the operation of a continuing care retirement
community operating under this chapter;

���������
(E)
�
Contains
the same line items and categories as the annual audited financial statements
filed with the commissioner pursuant to section -90; and

���������
(F)
�
For
continuing care retirement communities that are under development, the
prospective financial statements required by this paragraph shall include
narrative disclosure detailing all significant assumptions used in the
preparation of the prospective financial statements, including:

��������������
(i)
�
Details of any long-term financing for the purchase or construction
of the continuing care retirement community, including interest rate, repayment
terms, loan covenants, and assets pledged;

�������������
(ii)
�
Details of any leasing agreements where the provider is leasing
from another person any part of the real property of the continuing care
retirement community, including the length of the lease and the remaining term;

������������
(iii)
�
Details of any other funding sources that the provider anticipates
using to fund any start-up losses or to provide reserve funds to assure full
performance of the obligations of the provider under continuing care contracts;

�������������
(iv)
�
The total entrance fees to be received from or on behalf of,
residents at, or prior to, commencement of operations along with anticipated
accounting methods used in the recognition of revenues from and expected
refunds of entrance fees;

��������������
(v)
�
A description of any equity capital to be received by the provider;

�������������
(vi)
�
The cost of the acquisition of the continuing care retirement
community or, if the continuing care retirement community is to be constructed,
the estimated construction cost and cost to acquire the land;

������������
(vii)
�
Related costs, including financing and development costs, that the
provider expects to incur or become obligated for prior to the commencement of
operations;

�����������
(viii)
�
The marketing and resident acquisition costs to be incurred prior
to commencement of operations; and

�������������
(ix)
�
A description of the assumptions used for calculating the estimated
occupancy rate of the continuing care retirement community and the effect on
the income of the provider of government subsidies for health care services;

���
(38)
�
A
narrative describing the reasons for any material differences between:

���������
(A)
�
The
five-year prospective financial statements included as a part of the disclosure
statement recorded most immediately subsequent to the start of the provider's
most recently completed fiscal year; and

���������
(B)
�
The
actual results of operations of the provider's most recently completed fiscal
year;

���
(39)
�
A
table detailing the following key financial metrics for the past three fiscal
years, including the most recent fiscal year, or for each year the provider has
been in operation if the provider has been in operation for less than three
years, plus the next three fiscal years, based on the provider's current and
prior annual audited financial statements and current five-year prospective
financial statements; provided that if there is a material year over year
change in any of the key financial metrics, the provider shall include a
narrative describing the reasons for the material change; provided further that
for providers who are part of an obligated group, the ratios shall be computed
for the provider alone and for the obligated group:

���������
(A)
�
Liquidity
ratios:

��������������
(i)
�
Days cash on hand ratio; and

�������������
(ii)
�
Cushion ratio;

���������
(B)
�
Profitability
ratios:

��������������
(i)
�
Operating ratio;

�������������
(ii)
�
Net operating margin ratio; and

������������
(iii)
�
Adjusted net operating margin ratio;

���������
(C)
�
Capital
structure ratios:

��������������
(i)
�
Debt service coverage ratio;

�������������
(ii)
�
Unrestricted cash and investments to long-term debt ratio; and

������������
(iii)
�
Capital expenditures as a per centage of depreciation expense ratio;

���
(40)
�
If
the provider has had an actuarial study prepared within the prior three years,
a statement of actuarial opinion which includes a description of the key
assumptions used to prepare the actuarial study and an opinion on satisfactory
actuarial balance;

���
(41)
�
A
summary of the last examination report issued by the commissioner, if any, with
references to the page numbers of the examination report noting any
deficiencies found by the commissioner, and the actions taken by the provider
to rectify those deficiencies, indicating in the summary where the full examination
report may be inspected at the continuing care retirement community; provided
that the summary required by this paragraph shall not be required if the last
examination report is more than three years old; and

���
(42)
�
Any
other material information concerning the continuing care retirement community,
the provider, or any related party of the provider, which, if omitted, would
lead a reasonable person not to enter a continuing care or continuing care at
home contract with the provider.

����
(b)
�
A copy of the most common continuing care and
continuing care at home contract used by the provider shall be attached to each
disclosure statement.
�
To the extent
multiple continuing care or continuing care at home contracts are utilized by
the provider for the continuing care retirement community, a narrative shall be
included within the disclosure statement listing each contract type offered and
the material differences of each.

����
(c)
�
The cover page of the disclosure statement
shall, in a prominent location and in boldface type, include:

����
(1)
�
The
date of the disclosure statement;

����
(2)
�
The
last date through which the disclosure statement may be delivered;

����
(3)
�
That
the delivery of the disclosure statement to a contracting party before the
execution of a binding reservation agreement, continuing care contract, or
continuing care at home contract is required by this chapter;

����
(4)
�
That
the disclosure statement has not been reviewed or approved by any government
agency or representative to ensure accuracy of the information set out;

����
(5)
�
That
the disclosure statement has been filed with, and recorded by, the commissioner
in accordance with this chapter; and

����
(6)
�
That
the disclosure statement contains the information required by this chapter,
that it is correct, in all material respects, and that knowingly delivering a
disclosure statement that contains an untrue statement or omits a material fact
may subject the provider to penalties as set forth in this chapter.

����
(d)
�
The date on the cover page of the disclosure
statement shall coincide with the last day of the provider's fiscal year
covered by the information contained within the disclosure statement.

����
(e)
�
The disclosure statement shall be in plain English
and in language understandable by a layperson and combine conciseness,
simplicity, and accuracy to fully advise residents and potential residents of
the items required by this section.

����
(f)
�
The commissioner shall review the disclosure
statement for completeness but is not required to review the disclosure
statement for accuracy.

����
(g)
�
The commissioner may require a provider to
alter or amend a disclosure statement to provide full and fair disclosure to
residents and prospective residents, and the commissioner may require the
revision of a disclosure statement which the commissioner finds to be
incomplete, unnecessarily complex, voluminous, confusing, or illegible.

����
(h)
�
The commissioner may prescribe a standardized
format for the disclosure statement required by this section.

����
(i)
�
The commissioner shall post the current
disclosure statement for each continuing care retirement community on the commissioner's
website in accordance with this chapter.

����
� -62
�
Required delivery of disclosure statement.
�
(a)
�
A
provider shall deliver a current disclosure statement meeting the requirements
of section -61 to the person or the person's legal
representative with whom a binding reservation agreement, continuing care
contract, or continuing care at home contract is to be entered into.
�
The disclosure statement shall be delivered no
later than the earliest of the following occurrences:

����
(1)
�
The
execution of a binding reservation agreement, continuing care contract, or
continuing care at home contract; or

����
(2)
�
The
transfer of any money or other consideration, other than a nonbinding
reservation agreement deposit, to a provider by or on behalf of a prospective resident.

����
For
the purposes of this subsection, a disclosure statement is current if it is
dated within one year plus one hundred sixty days before the date of delivery
and is the most recently recorded disclosure statement on file with the commissioner.

����
(b)
�
The delivery required by this section may be
by electronic means if the provider obtains the written consent of the person
with whom the binding reservation agreement, continuing care contract, or
continuing care at home contract is to be entered into.
�
For the purposes of this subsection, delivery
by electronic means shall mean delivery by either of the following methods:

����
(1)
�
Delivery
to an electronic mail address at which the person has consented to receive the
disclosure statement; or

����
(2)
�
Both
of the following:

���������
(A)
�
Posting
the disclosure statement on an electronic network or site accessible by the Internet
through use of a mobile application, computer, mobile device, tablet, or any
other electronic device; and

���������
(B)
�
Sending
separate notice of the posting described in subparagraph (A) to the electronic
mail address at which the person consented to receive notice of the disclosure
statement posting.

����
(c)
�
After receiving delivery of a disclosure
statement pursuant to this section, a prospective resident shall sign an
acknowledgement of receipt.
�
The
acknowledgement shall include:

����
(1)
�
The
date;

����
(2)
�
The
name of the person signing; and

����
(3)
�
The
date of the disclosure statement received, including date revised, if any.

The provider shall provide a copy of
the acknowledgement of receipt to the person signing and shall maintain the
original.
�
The acknowledgement of receipt
required by this subsection may be received, given, and maintained in either an
electronic or paper form.

����
(d)
�
A copy of all disclosure statements,
including all amendments, filed with and recorded by the commissioner shall be
maintained by the provider, in either electronic or paper form, for at least
five years.

����
� -63
�
Annual revised disclosure statements.
�
(a)
�
Within
one hundred fifty days following the end of each fiscal year, a provider shall
file with the commissioner a revised disclosure statement setting forth current
information required pursuant to section -61.
�
The annual disclosure statement revision shall
be accompanied by an annual filing fee of $2,000.

����
(b)
�
Within five business days of receipt of an
annual revised disclosure statement and the annual filing fee, the commissioner
shall notify the provider in writing that:

����
(1)
�
The
revised disclosure statement has been received and recorded;

����
(2)
�
The
provider has met the filing requirements of this section; and

����
(3)
�
The
annual revised disclosure statement is now considered to be the current
disclosure statement f
or the purposes of this chapter.

After sending the notice, the commissioner
shall post the annual revised disclosure statement on the commissioner's
website within five business days.
�
After
receiving the commissioner's notice, the provider shall make the annual revised
disclosure statement available to all residents and depositors either in
electronic or paper form.

����
(c)
�
The commissioner may, upon a showing of good
cause by the provider, extend the due date of the annual disclosure statement
revision for a reasonable period of time not to exceed thirty days.

����
(d)
�
If the annual disclosure statement revision
is not received by the due date and no extension has been granted, a $1,000
late fee shall accompany submission of the annual disclosure statement
revision.
�
The commissioner may waive the
late fee upon a showing of good cause by the provider.

����
� -64
�
Other revisions to disclosure statement.
�
(a)
�
A
provider may revise its disclosure statement at any time if, in the opinion of
the provider, revision is necessary to prevent an otherwise current disclosure
statement from containing a material misstatement of fact or omitting a
material fact required to be stated therein.
�
A provider that revises its disclosure
statement for this purpose shall submit the revised disclosure statement to the
commissioner before delivery of the disclosure statement to any resident or
prospective resident.

����
(b)
�
If a disclosure statement is revised in
accordance
�
with this section or section
-61(g), the cover page shall additionally be revised to
reflect the revision date.

����
(c)
�
Within five business days of receipt of a
revised disclosure statement pursuant to this section, the commissioner shall
notify the provider in writing that the revised disclosure statement has been
received and recorded and is the current disclosure statement for the purposes
of this chapter.
�
After sending this
notification, the commissioner shall post the revised disclosure statement on
the commissioner's website within five business days.
�
After receiving the commissioner's
notification, a provider revising its disclosure statement pursuant to this
section shall make the revised disclosure statement available to all residents
either in electronic or paper form.

PART

VI
.
�
B
inding
R
eservation

A
greement
a
nd
C
ontinuing

C
are
C
ontract

����
� -70
�
Binding reservation agreement.
�
A binding reservation agreement shall include
the following:

����
(1)
�
A
provision that the person entering into the agreement may rescind the agreement
within thirty days following the later of the following occurrences:

���������
(A)
�
The
execution of the agreement; or

���������
(B)
�
The
receipt of a disclosure statement that meets the requirements of section
-61;

����
(2)
�
A
provision that the agreement shall be automatically canceled if either of the
following occurs:

���������
(A)
�
Depositor
dies before signing a continuing care contract; or

���������
(B)
�
A
depositor would be precluded from signing a continuing care contract and
occupying a living unit in the continuing care retirement community under the
terms of a continuing care contract due to illness, injury, or incapacity;

����
(3)
�
A
provision that, if an agreement is rescinded, automatically canceled, or
otherwise canceled by the depositor, the depositor shall receive a refund of
all money or other consideration transferred to the provider.
�
The following shall be deducted from the
depositor's refund:

���������
(A)
�
Nonstandard
costs specifically incurred by the provider at the request of the depositor and
described in the agreement;

���������
(B)
�
Any
nonrefundable fees specifically set forth in the agreement;

���������
(C)
�
Any
service charge specifically set forth in the agreement that shall not exceed
the greater of $3,000 or two per cent of the entrance fee; provided that in no
event shall the service charge exceed the amount of consideration transferred
to the provider by the depositor or a service charge be assessed due to the
termination of the agreement because of the failure of the provider to meet its
obligations under the agreement, or upon the failure of the provider to obtain
a permanent license in accordance with this chapter; and

����
(4)
�
A
provision that any refund due to a depositor for a cancellation or termination
for reasons not provided for in this section shall be computed in accordance
with the terms of the agreement.

����
� -71
�
Continuing care contract.
�
(a)
�
A
continuing care contract shall include the following:

����
(1)
�
A
provision that the person contracting with the provider may rescind the
contract within thirty days following the later of:

���������
(A)
�
The
execution of the contract; or

���������
(B)
�
The
receipt of a disclosure statement that meets the requirements of section
-61;

���������
and a resident to whom the contract
pertains is not required to move into the continuing care retirement community
before the expiration of the thirty-day period.

����
(2)
�
A
provision that, if a resident dies before occupying a living unit in the
continuing care retirement community, or if, on account of illness, injury, or
incapacity, a resident would be precluded from occupying a living unit in the
continuing care retirement community under the terms of the contract, the
contract is automatically canceled;

����
(3)
�
A
provision that, for rescinded or canceled contracts under this subsection and
contracts canceled before a living unit is initially available for occupancy by
the first resident of a living unit, the resident or the resident's legal
representative, shall receive a refund of all money or other consideration
transferred to the provider, less:

���������
(A)
�
Periodic
fees specified in the contract and applicable only to the period a living unit
was actually occupied by the resident;

���������
(B)
�
Those
nonstandard costs specifically incurred by the provider at the request of the
resident and described in the contract or any contract amendment signed by the
resident;

���������
(C)
�
Nonrefundable
fees, if set out in the contract; and

���������
(D)
�
A
reasonable service charge, if set out in the contract, not to exceed the
greater of $3,000 or two per cent of the entrance fee; provided that in no
event shall the service charge exceed the amount of consideration transferred
to the provider by the resident, or a service charge be assessed due to the
termination of the contract because of the failure of the provider to meet its
obligations under the contract, or upon the failure of the provider to obtain a
permanent license in accordance with this chapter; and

����
(4)
�
A
provision that any refund due to a resident for a cancellation or termination
for reasons not provided for in this section shall be computed in accordance
with the terms of the contract.

����
(b)
�
A continuing care contract shall specify:

����
(1)
�
All
fees required of residents, including any entrance fee and any ongoing periodic
fees;

����
(2)
�
The
services to be provided;

����
(3)
�
The
policy regarding changing the resident's living unit, if necessary, for the
protection of the health or safety of the resident or the general and economic
welfare of other residents;

����
(4)
�
The
policies to be implemented if the resident cannot pay the periodic fees;

����
(5)
�
The
terms governing the refund of any portion of the entrance fee in the event of
death or cancellation by the resident or provider;

����
(6)
�
The
policy regarding increasing the periodic fees;

����
(7)
�
A
description of the living unit;

����
(8)
�
Any
property rights of the resident;

����
(9)
�
The
policy, if any, regarding periodic fee adjustments if the resident is absent
from the continuing care retirement community; and

���
(10)
�
Any
requirement that the resident maintain long-term care insurance or apply for medicaid
benefits or any other public assistance program.

����
(c)
�
A continuing care contract shall include the
following notice immediately above the contract signature line and be in type
that is boldfaced, capitalized, underlined, or otherwise set out from the
surrounding written material to be conspicuous:

"NOTICE

Because the authority to enter into
continuing care contracts granted by the Insurance Commissioner is neither a
guarantee of performance by the provider nor an endorsement of any continuing
care contract provision, prospective residents shall carefully consider the
risks, benefits, and costs before signing a continuing care contract and are
strongly encouraged to seek financial and legal advice before doing so.".

PART
V
II
.
�
C
ontinuing
C
are
a
t
H
ome

����
� -80
�
Home care services defined.
�
As used is this part, "home care
services" has the same meaning as defined in section 321-14.8.

����
� -81
�
Application.
�
(a)
�
No
person shall arrange or provide continuing care at home unless licensed by the commissioner
pursuant to this chapter.
�
Only a
provider who has obtained a permanent license or a restricted permanent license
pursuant to this chapter may apply to the commissioner for a continuing care at
home license.
�
The application shall
include:

����
(1)
�
An
application fee of $500;

����
(2)
�
A
draft amended disclosure statement containing a description of the proposed
continuing care at home program, including the primary market area to be
served, the types of services to be provided, and the fees to be charged;

����
(3)
�
A
copy of the proposed continuing care at home contract;

����
(4)
�
An
actuarial study prepared in accordance with accepted actuarial standards of
practice which estimates when the continuing care at home program is projected
to be in satisfactory actuarial balance; provided that providers who do not
collect entrance fees or some other type of up-front prepayment of costs are
exempt from this requirement and shall only be required to submit an actuarial
projection of future population flows and adult care home bed and nursing bed
needs using appropriate mortality, morbidity, withdrawal, occupancy, and other
demographic assumptions, and using a projection period that extends to a point
at which, in the actuary's professional judgment, the use of a longer period
would not materially affect the results and conclusions;

����
(5)
�
A
market study prepared by a person experienced in the preparation of market
studies for continuing care at home or similar programs that demonstrates
sufficient interest in a continuing care at home program;

����
(6)
�
Prospective
financial statements prepared by an independent certified public accountant
that show the financial impact of providing continuing care at home on the
provider and the continuing care retirement community.
�
The prospective financial statements shall
include a statement of activities reporting the revenue and expense details for
providing continuing care at home, as well as the impact the program will have
on the operations of the provider and the continuing care retirement community,
including the operating reserve; and

����
(7)
�
Evidence
of the license required under chapter 321 to provide home care services, or a
contract with a licensed home care agency for the provision of home care
services to be provided to residents under the continuing care at home program.

����
(b)
�
The commissioner shall comply with the review
schedule in section -24 in response to an application for a
continuing care at home license.

����
(c)
�
The commissioner shall approve an application
for a continuing care at home license if the following requirements are met:

����
(1)
�
The
application complies with this section;

����
(2)
�
None
of the grounds for denial listed in section -131 apply to the
applicant;

����
(3)
�
The
applicant is able to provide continuing care at home as proposed;

����
(4)
�
There
is sufficient consumer interest in the continuing care at home program proposed
by the applicant, as evidenced by the market study; and

����
(5)
�
The
program proposed by the applicant will not have a detrimental financial impact
on the applicant and continuing care retirement community, as determined by the
commissioner.

����
(d)
�
After receiving a continuing care at home
license, the provider may arrange or provide continuing care at home and shall
file an amended disclosure statement with the commissioner which contains the
information regarding continuing care at home required by section
-61.

����
(e)
�
After the issuance of a continuing care at
home license, the commissioner shall require a provider to submit periodic
reports in a form prescribed by the commissioner to monitor the status of the
continuing care at home program.

����
� -82
�
Continuing care at home contract.
�
(a)
�
A
continuing care at home contract shall include the following provisions:

����
(1)
�
A
provision that the individual contracting with the provider may rescind the
contract within thirty days following the later of:

���������
(A)
�
The
execution of the contract; or

���������
(B)
�
The
receipt of a disclosure statement that meets the requirements of section
-61;

����
(2)
�
A
provision that, if a resident dies before the effective start date of services,
or if, on account of illness, injury, or incapacity, a resident would be
precluded from meeting the eligibility terms of the contract, the contract is
automatically canceled;

����
(3)
�
A
provision that, for rescinded or canceled contracts under this subsection, the
resident, or the resident's legal representative, shall receive a refund of all
money or other consideration transferred to the provider,

less:

���������
(A)
�
Periodic
fees specified in the contract and applicable only to the period when services
were provided to the resident;

���������
(B)
�
Nonrefundable
fees, if set out in the contract; and

���������
(C)
�
A
reasonable service charge, if set out in the contract, not to exceed the
greater of $3,000 or two per cent of the entrance fee, if any; and

����
(4)
�
A
provision that any refund due to a resident for any other cancellation or
termination not provided for in paragraphs (1) and (2) shall be computed in
accordance with the terms of the contract.

����
(b)
�
A continuing care at home contract shall
specify:

����
(1)
�
All
fees required, including any entrance fee and any ongoing periodic fees;

����
(2)
�
The
services to be provided;

����
(3)
�
The
policies to be implemented if the resident cannot pay the periodic fees;

����
(4)
�
The
terms governing the refund of any portion of the entrance fee in the event of
death or cancellation by the resident or provider;

����
(5)
�
The
policy regarding the adjustment of periodic fees;

����
(6)
�
Whether
transportation will be provided to residents, including travel to and from the
continuing care retirement community for services;

����
(7)
�
The
mechanism for monitoring residents who live outside the continuing care
retirement community;

����
(8)
�
The
process that will be followed to establish priority if a resident wishes to
exercise the resident's right to move into an independent living unit at a
continuing care retirement community operated by the provider;

����
(9)
�
The
process the provider will follow if it becomes necessary for the resident to
move into a long-term care facility;

���
(10)
�
The
policy that will be followed if a resident chooses not to move to a long-term
care facility when recommended by the provider;

���
(11)
�
The
policy, if any, that would entitle a resident to select placement in a
long-term care facility that is not owned and operated by the provider or by a
related party of the provider; and

���
(12)
�
A
statement describing any applicable geographical limits of the continuing care
at home program, and the policy that will be followed in the event that a
resident relocates to a different residence outside the geographical limits
covered by the continuing care at home program.

����
(c)
�
A continuing care at home contract shall
include the following notice immediately above the contract signature line and
be in type that is boldfaced, capitalized, underlined, or otherwise set out
from the surrounding written material to be conspicuous:

"NOTICE

Because the authority to enter into
continuing care at home contracts granted by the Insurance Commissioner is
neither a guarantee of performance by the provider nor an endorsement of any
continuing care at home contract provision, prospective residents shall
carefully consider the risks, benefits, and costs before signing a continuing
care at home contract and are strongly encouraged to seek financial and legal
advice before doing so.".

PART

VIII
.
�
F
inancial
R
eporting

a
nd
M
onitoring

����
� -90
�
General requirements related to filing and
extensions for filing of annual audited financial statements.
�
(a)
�
All
providers shall have an annual audit by an independent certified public
accountant and shall file audited financial statements with the commissioner
within one hundred fifty days following the end of each fiscal year.

����
(b)
�
Extensions of the filing date may be granted
by the commissioner for thirty-day periods upon a showing by the provider and
its independent certified public accountant of the reasons for requesting an
extension and determination by the commissioner of good cause for an extension;
provided that the request for extension shall be received in writing not less
than ten days before the due date and in sufficient detail to permit the commissioner
to make an informed decision with respect to the requested extension.

����
(c)
�
If an initial extension is granted in
accordance with subsection (b), a similar extension of thirty days shall be
granted for the filing of the provider's annual disclosure statement.

����
� -91
�
Contents of annual audited financial
statements.
�
(a)
�
The annual audited financial statements shall
report the financial position of the provider as of the end of the most recent
fiscal year and the results of its operations, cash flows, and changes in
equity or net assets for the year then ended.
�
The audited financial statements shall be
comparative, presenting the amounts as of the end of the most current year-end
and the amounts as of the immediately preceding year-end; provided that in the
first year in which a provider is required to file audited financial
statements, the comparative data may be omitted.

����
(b)
�
The audited financial statements shall
include:

����
(1)
�
Report
of independent certified public accountant;

����
(2)
�
Balance
sheet reporting assets, liabilities, and net assets or equity;

����
(3)
�
Statement
of operations;

����
(4)
�
Statement
of cash flows;

����
(5)
�
Statement
of changes in net assets or equity; and

����
(6)
�
Notes
to financial statements.

����
(c)
�
The audited financial statements shall be
prepared in accordance with one of the following requirements:

����
(1)
�
If
a provider is required by generally accepted accounting principles to have
their financial statements consolidated with other persons, the audited
consolidated financial statements shall include a consolidating balance sheet,
a consolidating statement of operations and changes in net assets or equity,
and a consolidating statement of cash flows as supplemental information to the
audited consolidated financial statements.
�
This supplemental information shall also include
a statement of operations for each continuing care retirement community
operated by the provider under this chapter;

����
(2)
�
If
the provider includes one or more persons acting in concert to offer and
provide continuing care, the audited financial statements shall be combined and
shall include a combining balance sheet, a combining statement of operations
and changes in net assets or equity, and a combining statement of cash flows as
supplemental information to the audited combined financial statements.
�
This supplemental information shall also include
a statement of operations for each continuing care retirement community
operated by the provider under this chapter;

����
(3)
�
If
a provider is part of an obligated group, the audited financial statements
shall be either consolidated or combined with the other members of the
obligated group and shall include a combining or consolidating balance sheet, a
combining or consolidating statement of operations and changes in net assets or
equity, and a combining or consolidating statement of cash flows as
supplemental information to the audited combined or consolidated financial
statements. This supplemental information shall also include a statement of
operations for each continuing care retirement community operated by the
provider under this chapter; and

����
(4)
�
If
the provider is not required by generally accepted accounting principles to
have their financial statements consolidated with other persons, does not
include one or more persons acting in concert to offer and provide continuing
care, and is not part of an obligated group, then the audited financial
statements shall be a stand-alone financial audit of the provider.
�
The audited financial statements shall include
as supplemental information, if the provider operates more than one continuing
care retirement community or has operations that are separate and distinct from
the operation of a continuing care retirement community or communities under
this chapter, a statement of operations for each continuing care retirement
community operated by the provider under this chapter.

����
(d)
�
If a provider is also licensed to provide
continuing care at home, the audited financial statements shall account for the
related revenue and expenses generated from the continuing care at home program
separate from the provider's other operations when providing the information
required by this section.

����
� -92
�
Quarterly reporting.
�
Within forty-five days after the end of each
fiscal quarter, a provider shall file with the commissioner the following:

����
(1)
�
Quarterly
unaudited financial statements of the provider and any obligated group of which
the provider is a member, which shall include a balance sheet, a statement of
operations, and a statement of cash flows, which shall contain the same
categories and line items as the annual audited financial statements filed with
the commissioner pursuant to section -90;

����
(2)
�
The
twelve-month daily average occupancy rate by living unit type at each
continuing care retirement community operated by the provider in the State in a
form prescribed by the commissioner; and

����
(3)
�
Notice
of the following:

���������
(A)
�
Any
change in the provider's or the provider's controlling person's board of
directors or other governing body, president, chief executive officer, and
chief financial officer.
�
Notice shall
include the name of the provider, the name of the controlling person, if
applicable, the name of the person previously holding the position, the name of
the person currently holding the position, a brief biography of the person
currently holding the position, and the date the position change took place;
and

���������
(B)
�
Any
change in the organizational documents of the provider, including changes in
the provider's articles of incorporation and bylaws.
�
Copies of the changed documents shall be
submitted with the notification to the commissioner.

����
� -93
�
Actuarial study.
�
(a)
�
A
provider shall submit to the commissioner, at least once every three years, an
actuarial study prepared in accordance with accepted actuarial standards of
practice for each continuing care retirement community operated by the provider
in the State and any continuing care at home program that the provider is
licensed for pursuant to this chapter.

����
(b)
�
If the actuary is unable to form an opinion,
or if the opinion is adverse or qualified, the statement of actuarial opinion
and the actuarial study shall specifically state the reason.

����
(c)
�
The commissioner may request the information
required in this section more frequently to assist in the determination of a
possible hazardous condition.

����
(d)
�
A provider required to file an actuarial
study under this section that held a license on the effective date of this
section shall file an actuarial study with the commissioner before the
expiration of three years following the effective date of this section;
provided that each provider shall file its required actuarial study before the
expiration of three years following the date it last filed an actuarial study
with the commissioner.

����
(e)
�
A provider required to file an actuarial
study under this section that did not hold a license on the effective date of
this section shall file its first actuarial study within forty-five days
following the due date for the provider's annual audited financial statements
for the fiscal year in which the provider obtained its permanent license;
provided that the provider shall file its required actuarial study before the
expiration of three years following the date it last filed an actuarial study
with the commissioner.

����
(f)
�
A provider that only offers health care on a
fee-for-service basis or only provides a limited discount or limited number of
free days in a long-term care facility shall be exempt, unless otherwise
required by the commissioner, from the actuarial study requirement in this
section.
�
Providers exempt pursuant to
this subsection shall submit to the commissioner, at least once every five
years, an actuarial projection of future population flows and adult care home
bed and nursing bed needs using appropriate mortality, morbidity, withdrawal,
occupancy, and other demographic assumptions and using a projection period that
extends to a point at which, in the actuary's professional judgment, the use of
a longer period would not materially affect the results and conclusions.
�
The commissioner may require an actuarial
projection of future population flows and adult care home bed and nursing bed
needs sooner if there has been an increase or decrease of twenty per cent or
more of one or more types of living units at a continuing care retirement
community during the provider's most recent fiscal year.

����
� -94
�
Additional reporting.
�
If the commissioner determines that
additional information is needed to properly monitor the financial condition or
operations of a provider or continuing care retirement community or is
otherwise needed to protect the interests of residents and the public, the commissioner
may require a provider licensed under this chapter to file any of the
following:

����
(1)
�
Monthly
unaudited financial statements in the format required by section
-92 which shall be due no later than forty-five days after
the end of each month; or

����
(2)
�
Any
other data, financial statements, and pertinent information as the commissioner
may reasonably require regarding the provider, the provider's obligated group,
the continuing care retirement community, or any related party, if the provider
relies on a contractual or financial relationship with the related party in
order to meet the financial requirements of this chapter, or has a material
amount invested in, or has a material amount of receivables due from, the
related party.

PART

IX
.
�
N
otification
R
equirements

����
� -100
�
Notifications to commissioner and
residents.
�
A provider shall notify
the commissioner and all residents in writing within ten business days whenever
any of the following apply:

����
(1)
�
The
provider fails to maintain the operating reserve required pursuant to part XI
of this chapter;

����
(2)
�
The
provider, or any obligated group of which the provider is a member, violates or
seeks modification, waiver, or extension of any material covenant or material
payment terms contained in any debt agreement;

����
(3)
�
The
provider has any entrance fee refunds that become more than thirty days
contractually past due;

����
(4)
�
The
provider plans to reduce the number of any type of living unit by twenty per
cent or more.
�
The notification shall
include a statement describing the reasons for the reduction and the effect, if
any, on residents and the financial condition of the provider.
�
For the purposes of this paragraph, the percentage
shall be based on the type of living unit being reduced;

����
(5)
�
The
provider makes any change to its name, or the name of a continuing care
retirement community operated by the provider in the State, including the
adoption of an assumed business name; or

����
(6)
�
Any
proceeding for denial, suspension, or revocation of any license or permit
needed to operate all or part of a continuing care retirement community in the
State.

����
� -101
�
Material changes or deviations in
information.
�
(a)
�
An applicant or provider shall notify the commissioner
of material changes or deviations in any information submitted to the commissioner
pursuant to this chapter within ten business days after the applicant or
provider becomes aware of the change or deviation.

����
(b)
�
Within thirty days after receiving notice of
a material change or deviation, the commissioner shall advise the applicant or
provider in writing whether any additional action needs to be taken as a result
of the material change or deviation.

����
(c)
�
The commissioner may suspend any approval,
certification, license, or permit issued pursuant to this chapter if the
applicant or provider fails to give written notice of material changes or
deviations required by this section.
�
The
suspension shall remain in effect until the commissioner has:

����
(1)
�
Assessed
the potential impact of the material changes or deviations on the applicant or
provider and the interests of residents and depositors; and

����
(2)
�
Taken
any action necessary under this chapter to protect the interests of any
residents and depositors.

����
(d)
�
For the purposes of this section, material
changes or deviations mean any change or extraordinary occurrence which creates
or causes, or could create or cause, an applicant or provider to be in a
hazardous condition or, for a proposed continuing care retirement community or
proposed expansion of a continuing care retirement community, to no longer be
financially viable.

PART

X
.
�
Other Transactions and Changes

����
� -110
�
Purchase, sale, or transfer of ownership
interest in the real property of a continuing care retirement community.
�
(a)
�
No
permit, certificate, or license issued pursuant to this chapter is
transferable, and no permit, certificate, or license issued pursuant to this chapter
has value for sale or exchange as property.

����
(b)
�
A provider or any other person who owns the
real property used in the operations of a continuing care retirement community
shall obtain approval from the commissioner before consummating any sale or
transfer of any real property used in the operations of a continuing care
retirement community, including a sale-leaseback transaction, or any interest
in a continuing care retirement community, other than the sale of an independent
living unit to a resident or other transferee.

����
(c)
�
A provider shall obtain approval from the commissioner
before consummating any purchase of real property currently leased and used by
the provider in the operations of a continuing care retirement community;
provided that any purchase option to be entered into by the provider that
requires a purchase option deposit shall only be entered into if the deposit is
placed in an escrow account or secured in another method acceptable to the commissioner.

����
(d)
�
A provider shall request approval of any
transaction listed in subsection (b) or (c) by filing a request for approval
with the commissioner, made under oath or affirmation, at least forty-five days
before consummating the transaction.
�
The
request for approval required by this subsection shall include:

����
(1)
�
The
identity and description of the persons involved in the transaction;

����
(2)
�
A
description of the transaction and the terms of the transaction;

����
(3)
�
A
description of the financial impact on the applicant;

����
(4)
�
If
applicable, a plan for ensuring performance of existing continuing care and
continuing care at home contract obligations; and

����
(5)
�
Any
other information reasonably required by the commissioner.

����
(e)
�
The commissioner shall comply with the review
schedule in section -24 in response to a request for approval
pursuant to this section.

����
(f)
�
The commissioner shall approve a request for
approval if the following requirements are met:

����
(1)
�
The
request complies with this section;

����
(2)
�
None
of the grounds for denial listed in section -131 apply to the
applicant; and

����
(3)
�
The
transaction does not jeopardize the financial stability of the applicant or
prejudice the interest of residents.

����
(g)
�
A provider shall give written notice to all
affected residents and depositors of the proposed transaction within ten
business days after receiving approval from the commissioner.

����
(h)
�
The commissioner may revoke or restrict the
certificate or license of a provider or take other administrative action
pursuant to part XII of this chapter if a provider violates the provisions of
this section.

����
� -111
�
Change of control of a provider.
�
(a)
�
No
person shall enter into an agreement to merge with, or to otherwise acquire
control of, a provider holding a certificate or license under this chapter
unless the transaction is approved by the commissioner.
�
To obtain the commissioner's approval, the
acquiring person shall file a request for approval with the commissioner.

����
(b)
�
The request for approval required by this
section shall be in a form prescribed by the commissioner, made under oath or
affirmation, and shall contain:

����
(1)
�
The
name and address of each acquiring person and the following additional
information regarding those persons:

���������
(A)
�
If
the person is not an individual, a report of the nature of its business
operations during the past five years or for a lesser period as the person and
any predecessors have been in existence;

���������
(B)
�
A
description of the business intended to be done by the person and the person's
related parties;

���������
(C)
�
A
list of all individuals who are or who have been selected to become directors
or executive officers of the person, or who perform or will perform functions
appropriate to those positions; and

���������
(D)
�
For
each individual listed pursuant to this paragraph, the person's principal
occupation and all offices and positions held during the past five years and
any conviction of crimes other than minor traffic violations during the past ten
years;

����
(2)
�
The
source, nature, and amount of the consideration used or to be used in effecting
the merger or other acquisition of control; a description of any transaction
wherein funds were or are to be obtained for that purpose, including any pledge
of the provider's stock, or the stock of any of its subsidiaries or controlling
persons; and the identity of persons providing the consideration;

����
(3)
�
Fully
audited financial information as to the earnings and financial condition of
each acquiring person for the preceding five fiscal years, or for a lesser
period as the acquiring person and any predecessors have been in existence, and
similar unaudited information as of a date not earlier than ninety days before
the filing of the written notice;

����
(4)
�
Any
plans or proposals that each acquiring person may have to liquidate the
provider, or any continuing care retirement community operated by the provider
in the State, to sell its assets or merge or consolidate it with any person, or
to make any other material change in its business or corporate structure or
management;

����
(5)
�
A
description of the effect, if any, that the merger or other acquisition of
control will have on the financial condition of the provider;

����
(6)
�
A
description of any change in the provision of goods and services to the
provider and residents;

����
(7)
�
A
description of any agreements made or to be made with residents which will
amend any continuing care or continuing care at home contract at the time of
the transfer of control;

����
(8)
�
A
description of any service or contractual obligation with residents which will
change as a result of the change in control; and

����
(9)
�
Any
additional information as the commissioner may require as necessary or
appropriate for the protection of residents or in the public interest.

����
(c)
�
The commissioner shall comply with the review
schedule in section -24 in response to a request for approval
pursuant to this section.

����
(d)
�
The commissioner shall approve a request for
approval pursuant to this section if the following requirements are met:

����
(1)
�
The
request for approval complies with this section;

����
(2)
�
None
of the grounds for denial listed in section -131 apply to the
applicant;

����
(3)
�
After
the change of control, the provider will be able to satisfy the certification
or licensure requirements, as applicable, of this chapter;

����
(4)
�
The
financial condition of any acquiring person will not jeopardize the financial
stability of the provider or prejudice the interest of any residents;

����
(5)
�
Any
plans or proposals that any acquiring person has to liquidate the provider, or
any continuing care retirement community operated by the provider in the State,
sell its assets or consolidate or merge it with any person, or to make any
other material change in its business or corporate structure or management, are
fair and reasonable to residents and in the public interest; and

����
(6)
�
The
competence, experience, and integrity of those persons who would control the
operation of the provider are such that the change of control will not harm the
interests of residents or of the public.

����
(e)
�
A provider shall give written notice to all
affected residents and depositors of the proposed merger or other acquisition
of control within ten business days after the acquiring person has received
approval from the commissioner.

����
(f)
�
The commissioner may revoke or restrict the
license or certificate of a provider or take other administrative action
pursuant to part XII of this chapter if a provider violates the provisions of
this section.

����
� -112
�
Third-party management.
�
(a)
�
A
provider shall request the approval of the commissioner before entering into a
contract with a third party for the management of a continuing care retirement
community; provided that the request for approval shall include a copy of the
proposed management contract, the information required by paragraphs (6) and
(7) of section -61(a) regarding the proposed third-party
manager, a description of the third party's experience in managing continuing
care retirement communities, and the reason for the change in management.

����
(b)
�
The provider shall inform all residents in
writing of the request for approval submitted to the commissioner pursuant to
this section within ten business days after the request for approval is
submitted to the commissioner.

����
(c)
�
The commissioner shall comply with the review
schedule in section -24 in response to a request for approval
pursuant to this section.

����
(d)
�
The commissioner may disapprove of the
request for approval if the commissioner determines either of the following:

����
(1)
�
The
proposed third-party manager is incompetent or untrustworthy or so lacking in
managerial experience as to make the operation of the continuing care
retirement community potentially hazardous to residents; or

����
(2)
�
The
proposed third-party manager is affiliated directly or indirectly through
ownership, control, or business relations with any person or persons whose
business operations are or have been marked by manipulation of assets or
accounts or by bad faith, to the detriment of residents, members, stockholders,
investors, creditors, or the public.

����
(e)
�
The provider shall remove any third-party
manager immediately upon discovery of either of the following:

����
(1)
�
That
a manager has been convicted of any felony or pleaded nolo contendere to a
felony charge or has been held liable or enjoined in a civil action by final
judgment involving fraud, embezzlement, fraudulent conversion, or
misappropriation of property; or

����
(2)
�
That
a manager is now, or was in the past, affiliated directly or indirectly through
ownership interest of ten per cent or more in, or control of, any business,
corporation, or other entity that has been convicted of any felony or pleaded
nolo contendere to a felony charge or has been held liable or enjoined in a
civil action by final judgment involving fraud, embezzlement, fraudulent
conversion, or misappropriation of property.

PART

XI
.
�
O
perating
R
eserve

����
� -120
�
Operating reserve requirement.
�
(a)
�
A
provider shall maintain after the opening of a continuing care retirement
community an operating reserve equal to fifty per cent of the total operating
costs of the continuing care retirement community forecasted or projected for
the twelve-month period following the period covered by the most recent
disclosure statement filed with the commissioner.

����
(b)
�
Once a continuing care retirement community
achieves a twelve-month daily average independent living unit occupancy rate of
ninety per cent or higher, a provider shall only be required to maintain an
operating reserve in an amount calculated using the table below, unless
otherwise instructed by the commissioner:

���������
Twelve-month
daily average
���
Operating reserve
���������
independent living unit
������
requirement as a percentage

���������
occupancy rate:
��������������
of total operating costs

��������
�����������������������������
of the continuing care:

���������
90.0% or above
���������������
25.00%

���������
86.0% to 89.9%
���������������
31.25%

���������
83.0% to 85.9%
���������������
37.50%

���������
80.0% to 82.9%
���������������
43.75%

���������
Below 80.0%
������������������
50.00%

����
(c)
�
A provider who has a twelve-month daily
average independent living unit occupancy rate equal to or in excess of
ninety-three per cent and has no long-term debt or a debt service coverage
ratio in excess of 2.00 as of the provider's most recent fiscal year-end shall
only be required to maintain an operating reserve equal to 12.5 per cent of
total operating costs of the continuing care retirement community, unless
otherwise instructed by the commissioner.

����
(d)
�
The commissioner may increase the amount a
provider is required to maintain as its operating reserve, not to exceed fifty per
cent of total operating costs as calculated in accordance with section
-121, for a continuing care retirement community operated by
the provider or require that a provider immediately place the operating reserve
on deposit with the commissioner if the commissioner has determined that the
provider is in a hazardous condition pursuant to section -132.

����
(e)
�
A provider shall notify all residents in
writing within ten business days if the commissioner, pursuant to subsection
(d), increases the amount a provider is required to maintain as its operating
reserve for a continuing care retirement community operated by the provider or
requires the operating reserve to be placed on deposit with the commissioner.

����
(f)
�
If the commissioner requires a provider to
place an operating reserve on deposit with the commissioner, the provider shall
at the same time deliver to the commissioner a power of attorney executed by
the provider's president and secretary, or other proper person or persons,
authorizing the sale or transfer of said qualifying assets, or any part, for
the purpose of paying any of the liabilities of the provider related to the
continuing care retirement community for which the operating reserve is
maintained.

����
� -121
�
Operating reserve calculation.
�
(a)
�
The
five-year prospective financial statements as required by section
-61(a)(37), together with the twelve-month daily average
independent living unit occupancy rate of the continuing care retirement
community, shall serve as the basis for computing the operating reserve;
provided that a provider shall calculate and adjust, if necessary, the required
operating reserve on at least a semiannual basis, including the date the
operating reserve is certified in accordance with section -125.

����
(b)
�
In addition to total operating expenses,
total operating costs shall include debt service, consisting of principal and
interest payments, along with taxes and insurance on any mortgage loan or other
long-term financing, but will exclude depreciation, amortized expenses, and
extraordinary items as approved by the commissioner ;provided that if the debt
service portion is accounted for by way of another reserve account, the debt
service portion may be excluded upon satisfactory evidence of the existence and
purpose of the other reserve account.

����
(c)
�
A provider shall apply in writing for a
determination by the commissioner to exclude extraordinary items from total
operating costs and shall provide documentation to support the request.
�
The commissioner shall comply with the review
schedule in section -24 in response to a request for approval
pursuant to this subsection.

����
(d)
�
For providers that have voluntarily and
permanently discontinued entering continuing care contracts, or who operate a
continuing care retirement community where not all occupants are under
continuing care contracts, the commissioner may allow a reduced operating
reserve if the commissioner finds that the reduction is consistent with the
financial protections imposed by this chapter.
�
In making this determination, the commissioner
may consider factors including the financial condition of the provider, the
number of outstanding continuing care contracts, the ratio of persons under
continuing care contracts to those persons who do not hold a continuing care
contract, and the twelve-month daily average independent living unit occupancy
rate.

����
(e)
�
A provider who has increased the number of
independent living units available at a continuing care retirement community more
than twenty per cent shall be allowed to exclude the total number of
independent living units in the expansion project for a period of eighteen
months after the independent living units become available for occupancy when
computing the operating reserve required by this part.

����
(f)
�
The commissioner may allow a different
calculation for a provider's required operating reserve for a continuing care
retirement community operated by the provider if the calculation, in the
opinion of the commissioner, does not diminish the residents' protections
provided for by this part.

����
� -122
�
Qualifying assets.
�
(a)
�
A
provider shall fund its operating reserve with any of the following qualifying
assets:

����
(1)
�
Cash;

����
(2)
�
Cash
equivalents; or

����
(3)
�
Investment
grade securities.
�
For the purposes of
this paragraph, investment grade securities are any of the following:

���������
(A)
�
Securities
issued or directly and fully guaranteed or insured by the government of the
United States of America or any of its agencies or instrumentalities;

���������
(B)
�
Debt
securities or debt instruments with a rating of BBB- or higher by Standard
& Poor's or Baa3 or higher by Moody's, or, if no rating of Standard &
Poor's or Moody's then exists, the equivalent of that rating by any other
nationally recognized statistical rating organizations maintained by the
National Association of Insurance Commissioners; or

���������
(C)
�
Investments
in any fund that invests exclusively in investments of the type described in
subparagraph (A) or (B), which fund may also hold immaterial amounts of cash
pending investment or distribution;

����
(4)
�
Corporate
stock that is traded on a public securities exchange that can be readily valued
and liquidated for cash, including shares in mutual funds and exchange-traded
funds that hold portfolios consisting predominantly of these stocks; and

����
(5)
�
Other
assets considered to be acceptable to the commissioner on a case-by-case basis.

����
(b)
�
Except as otherwise provided in this
subsection, the assets maintained by the provider as an operating reserve for a
continuing care retirement community operated by the provider under this chapter
shall not be subject to any liens, charges, judgments, garnishments, or
creditors' claims and shall not be hypothecated, pledged as collateral, or
otherwise encumbered in any manner.
�
A
provider may encumber assets held as an operating reserve as part of a security
pledge of assets or similar collateralization that is part of the provider's
debt financing and is included in the provider's debt indenture security
instruments related thereto or other similar instrument.

����
(c)
�
For the purpose of calculating the amount to
be maintained by the provider to satisfy its operating reserve requirement, all
qualifying assets shall be valued at their current fair market value.

����
� -123
�
Surety bond; letter of credit.
�
(a)
�
In
lieu of funding the operating reserve with qualifying assets as set forth in section
-122, a provider may fund all or a portion of the operating
reserve required by this part by filing with the commissioner a surety bond or
letter of credit as set forth in this section.

����
(b)
�
A surety bond shall be in a form acceptable
to the commissioner and issued by an insurer authorized by the commissioner to
write surety business in the State.
�
The
following shall apply to surety bonds issued pursuant to this chapter:

����
(1)
�
The
surety bond may be exchanged or replaced with another surety bond if:

���������
(A)
�
The
surety bond applies to obligations and liabilities that arose during the period
of the original surety bond;

���������
(B)
�
The
surety bond meets the requirements of this section; and

���������
(C)
�
Ninety
days' advance written notice is provided to the commissioner;

����
(2)
�
Notice
of cancellation or nonrenewal of the surety bond required by this section shall
be provided to the provider and the commissioner in writing at least forty-five
days before cancellation or nonrenewal; and

����
(3)
�
A
surety bond may be canceled by the issuer of the bond with respect to future
obligations or liabilities upon proper notice pursuant to this section and
without regard to approval or acceptance of the commissioner.

����
(c)
�
A provider may file a clean, irrevocable,
unconditional letter of credit issued or confirmed by a qualified United States
financial institution as defined in section 431:4A-103, naming the commissioner
as beneficiary; provided that the terms of the letter of credit shall be
approved by the commissioner before issuance and before its renewal or
modification; provided further that the letter of credit shall provide the
following information:

����
(1)
�
Ninety
days' prior written notice to both the provider and the commissioner of the
financial institution's determination not to renew or extend the term of the
letter of credit;

����
(2)
�
Unless
otherwise arranged by the provider to the satisfaction of the commissioner,
deposit by the financial institution of letter of credit funds in an account
designated by the commissioner no later than thirty days before the expiration
of the letter of credit; and

����
(3)
�
Deposit
by the financial institution of letter of credit funds in an account designated
by the commissioner within five business days following written instructions
from the commissioner that, in the sole judgment of the commissioner, funding
of the operating reserve is required.

����
� -124
�
Operating reserve release.
�
(a)
�
An
operating reserve shall only be released, in whole or in part, upon the
submittal of a detailed request from the provider and approval of that request
by the commissioner
�
This request shall
be submitted in writing for the commissioner to review at least ten business
days before the proposed date of release.

����
(b)
�
To receive the approval of the commissioner,
a provider shall explain why a release is necessary and, if applicable, submit
a repayment schedule to replenish the operating reserve to the amount required
by section -120.
�
Within five business days after the date a
request is deemed complete, the commissioner shall provide the provider with a
written notice of approval or disapproval of the request.
�
The commissioner may disapprove any request to
release the funds if it is determined that the release is not in the best
interest of residents.

����
(c)
�
A provider shall give written notice to
residents of any request made pursuant to subsection (a) at the same time the
written request is submitted to the commissioner.

����
� -125
�
Operating reserve certification.
�
At the time a provider files its annual
audited financial
�
statements
pursuant
�
to section -90,
a provider shall file a form acceptable to the commissioner computing,
reporting, and certifying:

����
(1)
�
The
twelve-month daily average independent living unit occupancy rate at the
continuing care retirement community, or a shorter period of time that the
continuing care retirement community has been in operation, as of the date of
certification;

����
(2)
�
The
amount the provider is required to hold as its operating reserve; and

����
(3)
�
A
description of the qualifying assets or other form of security and, if
applicable, their respective values, as defined and valued in accordance with section
-122, that the provider maintains for its operating reserve.

PART

XII
.
�
O
ffenses
a
nd
P
enalties

����
� -130
�
Definition of impairment.
�
As used is this part, "impaired"
means a weakened financial state or condition that may affect a provider's
ability to pay its obligations as they come due in the normal course of
business.

����
� -131
�
Grounds for discretionary refusal,
restriction, or revocation of a permit, certificate, or license.
�
(a)
�
The
commissioner may deny an application or any other request for approval or
restrict or revoke any permit, certificate, license, or other authorization
issued under this chapter if the commissioner finds that the applicant or
provider:

����
(1)
�
Wilfully
violated any provision of this chapter or of any rule or order of the commissioner;

����
(2)
�
Made
a material omission, misstatement, or misrepresentation, or committed fraud in
obtaining a permit, certificate, license, or other authorization;

����
(3)
�
Engaged
in any fraudulent or dishonest practices in the conduct of its business;

����
(4)
�
Misappropriated,
converted, or improperly withheld any monies;

����
(5)
�
Failed
to file an annual disclosure statement, annual audited financial statements, or
any other materials requested by the commissioner or otherwise required by this
chapter;

����
(6)
�
Failed
to deliver to prospective residents a disclosure statement as required by this chapter;

����
(7)
�
Delivered
to prospective residents a disclosure statement that makes a material
misstatement or omits a material fact and the provider, at the time of the
delivery of the disclosure statement, had actual knowledge of the misstatement
or omission;

����
(8)
�
Failed
to make a revised disclosure statement available to residents;

����
(9)
�
Made
any material misrepresentations to depositors, prospective residents, or
residents of a continuing care retirement community operated or to be operated
in the State;

���
(10)
�
Failed
to maintain the escrow account required under this chapter or released a
portion of an escrow account required to be maintained under this chapter;

���
(11)
�
Failed
to deposit entrance fees and deposits into an escrow account as required by
this chapter;

���
(12)
�
Failed
to maintain the operating reserve required under this chapter or released a
portion of the operating reserve required to be maintained under this chapter
without commissioner approval;

���
(13)
�
Violated
a restriction of its permit, certificate, or license;

���
(14)
�
After
request by the commissioner for an investigation or examination, refused access
to records or information; refused to be investigated or examined or to produce
its accounts, records, and files for an investigation or examination; refused
to give information with respect to its affairs; or refused to perform any
other legal obligations related to an investigation or examination;

���
(15)
�
Failed
to fulfill obligations under continuing care and continuing care at home
contracts;

���
(16)
�
Violated
the provisions of section -110, -111, or -112;

���
(17)
�
Failed
to comply with the terms of a cease-and-desist order; or

���
(18)
�
Has
been determined by the commissioner to be in a hazardous condition.

����
(b)
�
Findings of fact in support of a denial,
restriction, or revocation shall be accompanied by an explicit statement of the
commissioner's understanding of the underlying facts supporting the findings.

����
(c)
�
If the commissioner has good cause to believe
that a provider has committed a violation for which revocation could be
ordered, the commissioner may first issue a cease-and-desist order. If the cease-and-desist
order is not or cannot be effective in remedying the violation, the commissioner
may, after notice and hearing, order that a permit, certificate, or license be
revoked.
�
That revocation order may be
appealed pursuant to chapter 91.
�
The
provider shall accept no new deposits or entrance fees while the revocation
order is under appeal.

����
(d)
�
If the commissioner issues a cease-and-desist
order or restricts or revokes a provider's permit, certificate, or license, the
provider shall notify all residents and depositors of the cease-and-desist
order, restriction, or revocation within five business days.

����
(e)
�
The commissioner may, upon finding of changed
circumstances, remove a restriction.

����
(f)
�
The revocation by the commissioner of a
certificate or license shall not release the provider from obligations assumed
through continuing care and continuing care at home contracts.

����
(g)
�
Within twenty business days after receiving a
notice of revocation of a license, a provider shall provide to the commissioner
and all residents a written plan detailing specifically how the provider
intends to continue to meet its continuing care obligations.

����
(h)
�
A provider who has their permanent license
revoked shall continue to maintain an operating reserve and to file its annual
audited financial statements, annual disclosure statement, and pay annual fees
to the commissioner as required under this chapter as if the permanent license
had continued in full force, but the provider shall not issue any new
continuing care or continuing care at home contracts.

����
(i)
�
A provider who has a permit, certificate, or
license revoked shall provide written notice within five business days to all
depositors, shall reimburse all deposits collected, and shall provide
documentation to the commissioner verifying that all deposits have been
returned to depositors.

����
� -132
�
Hazardous condition.
�
The commissioner may consider any of the
following standards to determine whether a provider is in a hazardous
condition:

����
(1)
�
Whether
the provider is impaired or insolvent;

����
(2)
�
Adverse
findings reported in examination reports, audit financial statements, and
actuarial opinions, reports, or summaries;

����
(3)
�
Whether
the provider has failed to establish, maintain, or has substantially depleted
the operating reserve required by this chapter;

����
(4)
�
Whether
the provider is contractually past due on entrance fee refunds;

����
(5)
�
The
age and collectability of receivables;

����
(6)
�
Whether
a related party is impaired, insolvent, bankrupt, or threatened with insolvency
or bankruptcy, or delinquent in payment of its monetary or any other
obligations and which in the opinion of the commissioner may affect the
solvency of the provider;

����
(7)
�
Whether
the provider, or any obligated group that the provider is a part of, is not in
compliance with any covenant contained in any debt agreement;

����
(8)
�
Whether
the provider is aware of any existing circumstances which would hinder or cause
the provider, or any member of an obligated group that the applicant or
provider is a part of, to not be able to perform on any debt agreement;

����
(9)
�
Contingent
liabilities, pledges, or guaranties that either individually or collectively
involve a total amount that in the commissioner's opinion may affect a
provider's solvency;

���
(10)
�
Whether
the management of a provider, including officers, directors, or any other
person who directly or indirectly controls the operations of an applicant,
provider, or continuing care retirement community, fails to possess and
demonstrate the competence, experience, or integrity considered by the commissioner
to be necessary to serve the provider or continuing care retirement community
in that position;

���
(11)
�
Whether
the management of a provider has failed to respond to the commissioner's
inquiries about the condition of the applicant or provider or has furnished
false and misleading information in response to an inquiry by the commissioner;

���
(12)
�
Whether
the applicant or provider has failed to meet financial, disclosure statement,
or other filing requirements in the absence of a reason satisfactory to the commissioner;

���
(13)
�
Whether
the management of an applicant or provider has filed any false or misleading
financial statement, has released a false or misleading financial statement to
a lending institution or to the public, or has made a false or misleading entry
or omitted an entry of material amount in the applicant's or provider's books;

���
(14)
�
Whether
the applicant or provider has experienced or will experience in the foreseeable
future cash flow or liquidity problems; or

���
(15)
�
Any
other finding determined by the commissioner to be hazardous to the applicant's
or provider's depositors, residents, creditors, or the public.

����
� -133
�
Corrective action plan.
�
(a)
�
If
the commissioner has determined that a provider is in a hazardous condition,
the commissioner may, in lieu of taking action under section -131
or -150, and after notice and opportunity for hearing, issue
an order requiring a provider to submit a corrective action plan within forty-five
days and notify all residents and depositors within five business days of the commissioner's
order.
�
The corrective action plan shall
include the following:

����
(1)
�
Proposals
of corrective actions the provider intends to take which would be expected to
result in the elimination of the hazardous condition; and

����
(2)
�
A
date when the provider anticipates it will rectify the problems and
deficiencies identified by the commissioner.

����
(b)
�
Within forty-five days after the submittal of
a corrective action plan, the commissioner shall notify the provider whether
the corrective action plan shall be implemented or is, in the judgment of the commissioner,
unsatisfactory.
�
If the commissioner
determines the corrective action plan is unsatisfactory, the notification to
the provider shall set forth the reasons for the determination and may set
forth proposed revisions that will render the corrective action plan
satisfactory in the judgment of the commissioner.
�
After receiving notification from the commissioner,
the provider shall prepare a revised corrective action plan, if applicable,
which may incorporate by reference any revisions proposed by the commissioner
and shall submit the revised corrective action plan to the commissioner within thirty
days after notification from the commissioner.
�
If the corrective action plan is approved, the
provider shall immediately implement the corrective action plan, distribute a
copy of the plan to all residents and depositors, and begin reporting to the commissioner
on the implementation and progress of the corrective action plan in accordance
with a schedule and in a format established by the commissioner.
�
Each report shall also be distributed to all
residents and depositors at the time the report is submitted to the commissioner.

����
(c)
�
If the corrective action plan is disapproved,
or if a corrective action plan is not submitted, the commissioner may engage
consultants to develop a corrective action plan.
�
After the corrective action plan is developed,
the commissioner shall direct the provider to implement the corrective action
plan and to distribute a copy of the corrective action plan to all residents
and depositors.
�
Expenses incurred by the
commissioner to engage consultants shall be paid by the provider.

����
(d)
�
This section shall not be construed to delay
or prevent the commissioner from taking any regulatory measures deemed
necessary regarding the provider.

����
(e)
�
The provider shall distribute its approved
corrective action plan and its most recent report to the commissioner to a
prospective resident at the time the provider distributes its current
disclosure statement pursuant to section -62. Subsections (b)
and (c) of section -62 shall apply to the corrective action
plan and the most recent report to the commissioner required to be distributed
pursuant to this subsection.

����
� -134
�
Investigations and subpoenas.
�
(a)
�
The
commissioner may make public or private investigations within or outside of the
State as necessary to:

����
(1)
�
Determine
whether any person has violated or is about to violate any provision of this chapter;

����
(2)
�
Aid
in the enforcement of this chapter; or

����
(3)
�
Verify
statements contained in any disclosure statement or other filing filed or
delivered under this chapter.

����
(b)
�
For the purpose of any investigation or
proceeding under this chapter, the commissioner may require or permit any
person to file a statement in writing, under oath or otherwise, as to any of
the facts and circumstances concerning the matter to be investigated.

����
(c)
�
For the purpose of any investigation or
proceeding under this chapter, the commissioner or the commissioner's designee
may exercise all powers granted to the commissioner with respect to insurance
companies.

����
� -135
�
Civil liability.
�
(a)
�
A
provider who enters into a binding reservation agreement, continuing care
contract, or continuing care at home contract under this chapter without having
first delivered a disclosure statement meeting the requirements of part V of
this chapter to the person with whom the binding reservation agreement,
continuing care contract, or continuing care at home contract was entered into,
or enters into a binding reservation agreement, continuing care contract, or
continuing care at home contract with a person who has relied on a disclosure
statement that materially misrepresents or omits to state a material fact
required to be stated therein or necessary in order to make the statements made
therein, in light of the circumstances under which they are made, not
misleading, shall be liable to that person for actual damages and repayment of
all fees paid to the provider violating this chapter, less the costs of care,
services, and housing provided to the resident by or on whose behalf the
binding reservation agreement, continuing care contract, or continuing care at
home contract was entered into prior to discovery of the violation,
misstatement, or omission or the time the violation, misstatement, or omission
should reasonably have been discovered, together with interest thereon at the
legal rate for judgments, and court costs and reasonable attorneys' fees.

����
(b)
�
Liability under this section exists
regardless of whether the provider had actual knowledge of the misstatement or
omission.

����
(c)
�
A person may not file or maintain an action
under this section if the person, before filing the action, received a written
offer of a refund of all amounts paid to the provider, together with interest
at the rate established pursuant to section 478-2, less the cost of care,
services, and housing provided prior to receipt of the offer, and if the offer
recited the provisions of this section and the recipient of the offer failed to
accept it within thirty days of actual receipt.

����
(d)
�
An action may not be maintained to enforce a
liability created under this chapter unless brought before the expiration of
three years after the alleged violation.

����
� -136
�
Criminal penalties.
�
(a)
�
Any
person who wilfully and knowingly violates any provision of this chapter is
guilty of a misdemeanor.
�
The commissioner
may refer any available evidence concerning a violation of this chapter, or of
any rule adopted or order issued pursuant to this chapter, to the attorney
general or a prosecuting attorney, as defined in section 712A-1.
�
The attorney general or a prosecuting attorney
may institute the appropriate criminal proceedings under this chapter, with or
without evidentiary referral from the commissioner.
�
Nothing in this chapter limits the power of
the State to punish any person for any conduct that constitutes a crime under
any other statute.

����
(b)
�
Any action brought against any person shall
not abate by reason of a sale or other transfer of ownership of the continuing
care retirement community except with the express written consent of the commissioner.

����
� -137
�
Forfeiture.
�
(a)
�
A
permit, certificate, license, or other approval issued by the commissioner
pursuant to this chapter shall be forfeited, after notice and opportunity for
hearing, when any one of the following occurs:

����
(1)
�
The
provider terminates marketing a proposed continuing care retirement community;

����
(2)
�
The
provider surrenders to the commissioner its permit, certificate, or license;

����
(3)
�
The
provider sells or otherwise transfers all or part of a continuing care
retirement community without the commissioner's approval in accordance with section
-110;

����
(4)
�
A
change occurs in the control of the provider without the commissioner's
approval in accordance with section -111;

����
(5)
�
The
provider merges with another person without the commissioner's approval in
accordance with section -111;

����
(6)
�
The
provider moves the continuing care retirement community from one location to
another without the commissioner's prior approval;

����
(7)
�
The
provider abandons the continuing care retirement community or its obligations
under continuing care and continuing care at home contracts;

����
(8)
�
The
provider is evicted from the structures that make up the continuing care
retirement community; or

����
(9)
�
The
provider closes a continuing care retirement community.

����
(b)
�
The provider shall notify all residents and
depositors within five business days after a forfeiture of a permit,
certificate, or license.

����
� -138
�
Remedies available in cases of unlawful
contracting.
�
(a)
�
If the commissioner determines that a
provider is or has been violating the provisions of this chapter, the commissioner
may, after notice and opportunity for hearing, order the provider to cease
entering into binding reservation agreements, continuing care contracts, and
continuing care at home contracts and make a rescission offer to any resident
or depositor who entered into a binding reservation agreement, continuing care
contract, or continuing care at home contract while the provider was violating
the provisions of this chapter in accordance with the provisions of this
section.

����
(b)
�
After the commissioner issues an order
pursuant to subsection (a), every binding reservation agreement, continuing
care contract, or continuing care at home contract entered into in violation of
this chapter may be rescinded at the election of the resident or depositor
without penalty.

����
(c)
�
No resident or depositor shall have the
benefit of this section who, within thirty days of receipt, has refused or
failed to accept an offer made in writing by the provider to rescind the
binding reservation agreement, continuing care contract, or continuing care at
home contract in question and to refund the full amount paid by the resident or
depositor with interest at the rate established pursuant to section 478-2 on
the full amount paid for the binding reservation agreement, continuing care
contract, or continuing care at home contract for the period from the date of
payment by the depositor or resident to the date of repayment, less the cost of
care, services, and housing provided, if applicable, and the amount of any
costs specifically incurred by the provider at the request of the resident or
depositor and set forth in writing, signed by both parties to the binding
reservation agreement, continuing care contract, or continuing care at home
contract.

����
� -139
�
Nonexclusive remedies.
�
The civil, criminal, and administrative
remedies available to the commissioner pursuant to this chapter are not
exclusive and may be sought and employed by the commissioner, in any
combination, to enforce this chapter.

����
� -140
�
Soliciting or accepting new agreements or
contracts by impaired or insolvent providers.
�
Regardless of whether delinquency proceedings
as to a provider have been or are to be initiated, a provider may not actively
solicit, approve the solicitation of, or enter into new binding reservation
agreements, continuing care contracts, or continuing care at home contracts in the
State after the provider knew, or reasonably should have known, that the
provider was impaired or insolvent except with the written permission of the commissioner.

�
The commissioner shall approve or
disapprove the continued marketing of new binding reservation agreements,
continuing care contracts, and continuing care at home contracts within fifteen
days after receiving a request from a provider. If the provider has declared
bankruptcy, the bankruptcy court or trustee appointed by the court has
jurisdiction over those matters.

PART

XIII
.
�
D
elinquency
P
roceedings

����
� -150
�
Supervision, rehabilitation, and
liquidation.
�
(a)
�
The commissioner may commence a supervision
proceeding pursuant to article 15 of chapter 431 or may apply to the circuit
court of the first judicial circuit of the State for appropriate relief or to
the federal bankruptcy court that may have previously taken jurisdiction over
the provider or continuing care retirement community for an order directing the
commissioner or authorizing the commissioner to rehabilitate or liquidate a
provider or continuing care retirement community in accordance with article 15
of chapter 431, if the commissioner determines, after notice and an opportunity
for hearing, that any of the following apply:

����
(1)
�
A
portion of an escrow account or operating reserve required to be maintained
under this chapter has been or is proposed to be released in violation of this chapter;

����
(2)
�
A
provider has been or will be unable to fully perform its obligations pursuant
to continuing care and continuing care at home contracts, or to meet
prospective financial data previously filed by the provider;

����
(3)
�
A
provider has failed to maintain the escrow account required under this chapter;

����
(4)
�
A
provider is in a hazardous condition; or

����
(5)
�
A
provider is bankrupt or insolvent, or in imminent danger of becoming bankrupt
or insolvent.

����
(b)
�
If the commissioner commences a supervision
proceeding, the provider shall notify all residents and depositors of the
proceeding within five business days.

����
(c)
�
If an order is issued directing or
authorizing the commissioner to rehabilitate or to liquidate a provider or
continuing care retirement community, the commissioner shall notify all
affected residents and depositors of the rehabilitation or liquidation order
within five business days or as otherwise directed by the court.

����
(d)
�
If, at any time, the court finds, upon
petition of the commissioner, a provider, or on its own motion, that the
objectives of an order to rehabilitate a provider have been accomplished and
that the continuing care retirement community or communities owned by, or
operated by, the provider can be returned to the provider's management without
further jeopardy to the residents or depositors of the continuing care
retirement community or communities, the court may, upon a full report and
accounting of the conduct of the provider's affairs during the rehabilitation
and of the provider's current financial condition, terminate the rehabilitation
and, by order, return the continuing care retirement community or communities
owned by, or operated by, the provider, along with the assets and affairs of
the provider, to the provider's management.

����
(e)
�
When applying for an order to rehabilitate or
liquidate a provider, the commissioner shall give due consideration in the
application to the manner in which the welfare of persons who have contracted
with the provider for continuing care may be best served.

����
(f)
�
An order for rehabilitation shall be refused
or vacated if the provider posts a bond, by a recognized surety authorized to
do business in the State and executed in favor of the commissioner on behalf of
persons who may be found entitled to a refund of entrance fees and deposits
from the provider or other damages in the event the provider is unable to
fulfill its contracts to provide continuing care, in an amount determined by
the Court to be equal to the reserve funding that would otherwise need to be available
to fulfill the provider's obligations.

����
� -151
�
Receiverships; exception for long-term
care facility beds.
�
When the commissioner
has been appointed as a receiver under
article 15 of chapter 431
for
a provider or a continuing care retirement community subject to this chapter,
the department of health may, notwithstanding any other provision of law,
accept and approve the addition of adult care home beds or nursing beds for a
continuing care retirement community owned by, or operated by, the provider, if
it appears to the court, upon petition of the commissioner or the provider, or
on the court's own motion, that the best interests of the provider or the
welfare of persons who have previously contracted with the provider or may
contract with the provider may be best served by the addition of adult care
home beds or nursing beds.

����
� -152
�
Contracts as preferred claims in
liquidation.
�
(a)
�
In the event of liquidation of a provider,
all continuing care and continuing care at home contracts executed by the
provider shall be deemed preferred claims against all assets owned by the
provider.

����
(b)
�
Notwithstanding subsection (a), the claims of
all continuing care and continuing care at home contracts shall be subordinate
to the liquidator's cost of administration or any secured claim.

PART

XIV
.
�
R
esidents'
R
ights
to
O
rganization and
S
emiannual

M
eetings

����
� -160
�
Definition of residents' council.
�
As used is this part, "residents'
council" means a group duly elected by residents at a continuing care
retirement community to advocate for residents' rights and to serve as a
liaison between residents and the provider with respect to resident welfare and
interests.

����
� -161
�
Right to organization.
�
A resident living in a continuing care
retirement community operated by a provider licensed under this chapter has the
right of self-organization, the right to be represented by an individual of the
resident's own choosing, and the right to engage in concerted activities to
keep informed on the operation of the provider and the continuing care
retirement community in which the resident resides or for other mutual aid or
protection.
�
The right to organize
includes the right to establish a residents' council.
����
� -162
�

Semiannual meetings.
�
(a)
�
The board of directors or other governing
body of a provider or its designated representative shall hold in-person
semiannual meetings with the residents of each continuing care retirement
community operated by the provider in the State for free discussions of
subjects, including but not limited to income, expenditures, financial trends
and problems, and proposed changes in policies, programs, and services as they
apply to the provider, the continuing care retirement community, and the
continuing care retirement community's residents.
�

����
For
the purposes of this section, a semiannual meeting shall be a single meeting
that is open to all residents and not a series of meetings with individual
residents. Nothing in this section shall prevent a provider from making a
semiannual meeting available via electronic means to residents of the
continuing care retirement community who are unable to attend in person.

����
(b)
�
At least one independent member of the board
of directors or other governing body of the provider shall attend the
semiannual meetings in person.
�
A
provider may apply to the commissioner for a waiver from the requirement of
this subsection based on unique circumstances.

����
(c)
�
Residents shall be entitled to at least seven
days' advance notice of each meeting under subsection (a).
�
The agenda and any materials that are
distributed at the meetings shall remain available upon request to residents
for at least 60 days after each semiannual meeting.

����
(d)
�
Whenever a state of emergency or disaster has
been proclaimed in the State or for an area within the State under
section
127A-14
, or whenever the President of the United States has issued a
major disaster declaration for the State or for an area within the State under
the Stafford Act, 42 United States Code section 5121 et seq., that directly
affects the continuing care retirement community, semiannual meetings required
under this section may be held by electronic means, including any of the
following:

����
(1)
�
Telephone;

����
(2)
�
Video
conference; or

����
(3)
�
Video
broadcast.

����
(e)
�
If a semiannual meeting is held under
subsection (d), notice of the method residents may use to attend the meeting
shall be published with the notice of the meeting.
�
The meeting shall be recorded in the format in
which it is conducted.
�
Acceptable
recording formats include, but are not limited to:

����
(1)
�
A
sound-only recording;

����
(2)
�
A
video recording with sound and picture; or

����
(3)
�
A
digital or analog broadcast capable of being recorded.

����
(f)
�
Recordings made pursuant to subsection (e)
shall remain available to residents for at least sixty days after being made
available to residents.

����
(g)
�
A provider shall report in the disclosure
statement required under section -61 the dates on which the
semiannual meetings were held during the provider's previous fiscal year.

PART
X
V
.
�
M
iscellaneous
P
rovisions

����
� -170
�
Waiver of statutory protection.
�
No act, agreement, or statement of any
resident, or of an individual purchasing continuing care for a resident under
any continuing care or continuing care at home contract shall constitute a
valid waiver of any provision of this chapter intended for the benefit or
protection of the resident or the individual purchasing continuing care for the
resident.

����
� -171
�
Continuing Care Advisory Committee.
�
(a)
�
There
is established within the insurance division of the department of commerce and
consumer affairs a twelve-member continuing care advisory committee comprised
of providers, residents, and professionals involved in the continuing care
retirement community industry.
�
The
members shall be appointed as follows:

����
(1)
�
Six
members appointed by the commissioner as follows:

���������
(A)
�
Two
residents of continuing care retirement communities;

���������
(B)
�
One
owner of a continuing care retirement community;

���������
(C)
�
One
provider of continuing care at a continuing care retirement community or one
provider of a continuing care at home program;

���������
(D)
�
One
person who, on account of his or her vocation, employment, or affiliation, can
be classified as a representative of residents of continuing care retirement
communities; and

���������
(E)
�
One
person who, on account of their vocation, employment, or affiliation, can be
classified as a representative of continuing care retirement communities;

����
(2)
�
Three
members appointed by the president of the senate as follows:

���������
(A)
�
One
person who, on account of their vocation, employment, or affiliation, can be
classified as a representative of residents of continuing care retirement
communities;

���������
(B)
�
One
person who, on account of their vocation, employment, or affiliation, can be
classified as a representative of continuing care retirement communities; and

���������
(C)
�
One
person who is a certified public accountant and is licensed to practice public
accountancy in the State;

����
(3)
�
Three
members appointed by the speaker of the house of representatives as follows:

���������
(A)
�
One
person who, on account of their vocation, employment, or affiliation, can be
classified as a representative of residents of continuing care retirement
communities;

���������
(B)
�
One
person who, on account of their vocation, employment, or affiliation, can be
classified as a representative of continuing care retirement communities; and

���������
(C)
�
One
person who is a certified public accountant and is licensed to practice public
accountancy in the State.

����
(b)
�
The committee shall:

����
(1)
�
Meet
at least twice per year;

����
(2)
�
Hold
other meetings at times and places as the committee chair may direct;

����
(3)
�
Act
in an advisory capacity to the commissioner on matters pertaining to the
operation and regulation of continuing care retirement communities and
continuing care at home programs;

����
(4)
�
Report
to the commissioner on developments in the continuing care retirement community
industry, including continuing care at home and similar programs, and problems
or concerns of providers and residents; and

����
(5)
�
Recommend
changes in relevant statutes and rules.

����
(c)
�
The term of each committee member shall be
three years, but each committee member shall serve until a successor has been
appointed by the appointing authority.
�
Committee
members may serve two consecutive terms.
�
Any appointment to fill a vacancy on the committee
created by resignation, dismissal, death, or disability of a member shall be
for the remainder of the unexpired term and filled by the appointing authority.

����
(d)
�
Committee members shall serve without pay but
shall be reimbursed for expenses, including travel expenses, necessary for the
performance of their duties.

����
� -172
�
Other licensing or regulation.
�
(a)
�
Nothing
in this chapter shall affect the authority of the department of health or
department of human services to license or regulate any long-term care
facility.

����
(b)
�
Continuing care retirement communities and
providers licensed under this chapter that are subject to the provisions of chapter
514B shall not be subject to the provisions of chapter 651C; provided that the
continuing care retirement community's declaration of condominium does not require
the payment of any fee or charge not otherwise provided for in a resident's
continuing care contract, or other separate contract for the provisions of
membership or services.

����
� -173
�
Examination.
�
(a)
�
The
commissioner or the commissioner's designee may, in the commissioner's
discretion, visit a provider offering continuing care in the State to examine
its books and records.
�
Expenses incurred
by the commissioner in conducting examinations under this section shall be paid
by the provider examined.

����
(b)
�
The relevant provisions of chapter 431 apply
to this chapter and are hereby incorporated by reference.

����
(c)
�
If a provider relies on a contractual or
financial relationship with another person to meet the financial requirements
of this chapter, the commissioner or the commissioner's designee may examine
the person that has a contractual or financial relationship with the provider
to the extent necessary to ascertain the financial condition of the provider.

����
(d)
�
A provider shall make a copy of the
examination report issued by the commissioner available for inspection by all
residents within ten business days after issuance."

����
SECTION 2.
�

This Act does not affect rights and duties that matured, penalties that
were incurred, and proceedings that were begun before its effective date.

����
SECTION 3.
�

If any provision of this Act, or the application thereof to any person
or circumstance, is held invalid, the invalidity does not affect other
provisions or applications of the Act that can be given effect without the
invalid provision or application, and to this end the provisions of this Act
are severable.

����
SECTION 4.
�
This Act shall take effect upon its approval.

INTRODUCED
BY:

_____________________________

Report Title:

Insurance
Commissioner; Insurance Division; Continuing Care Retirement Communities;
Continuing Care At Home; Insurance; Regulation; Consumer Protection; Penalty;
Continuing Care Advisory Committee

Description:

Establishes
a regulatory framework for continuing care retirement communities and
continuing care at home programs.
�

Establishes the Continuing Care Advisory Committee.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.