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GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
SESSION LAW 2025-58
HOUSE BILL 357
*H357-v-5*
AN ACT TO ENACT THE CONTINUING CARE RETIREMENT COMMUNITIES ACT, AS
RECOMMENDED BY THE DEPARTMENT OF INSURANCE.
The General Assembly of North Carolina enacts:
SECTION 1. Article 64 of Chapter 58 of the General Statutes is repealed.
SECTION 2. Chapter 58 of the General Statutes is amended by adding a new Article
to read:
"Article 64A.
"Continuing Care Retirement Communities.
"Part 1. General Provisions.
"§ 58-64A-1. Title.
This Article shall be known and may be cited as the "Continuing Care R etirement
Communities Act."
"§ 58-64A-2. Legislative intent.
The General Assembly recognizes that continuing care retirement community residents often
expend a significant portion of their savings when contracting with a provider for continuing care
and devastating consequences can result if a provider becomes insolvent or unable to provide
continuing care. It is the intent of the General Assembly to promote the dignity and protect the
health, safety, and welfare of older citizens of North Carolina by (i) encouraging the development
of continuing care retirement communities and (ii) requiring providers offering or providing
continuing care in this State to obtain a license and to be monitored and regulated by the North
Carolina Department of Insurance under this Article. This Article applies to both for -profit and
nonprofit providers.
"§ 58-64A-5. Definitions.
The following definitions apply to this Article:
(1) Accepted actuarial standards of practice. – Standards of practice that conform
with Actuarial Standards of Practice No. 3 for Continuing Care Retirement
Communities, Revised Edition, effective June 1, 2022, including subsequent
amendments and editions.
(2) Actuarial opinion. – An opinion issued by an actuary in accordance with
accepted actuarial standards of practice.
(3) Actuarial study. – 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.
(4) Actuary. – 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.
(5) Advertisement. – Any written, visual, or electronic informa tion provided to
potential residents, or their representatives, to induce those persons to
subscribe to or enter into a nonbinding reservation agreement, binding
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reservation agreement, continuing care contract, or continuing care at home
contract.
(6) Affiliate. – 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.
(7) Annual debt service. – 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.
(8) Applicant. – Any person with a pending application or other request for
approval under this Article.
(9) Audited financial statements. – Financial statements that have been prepared
in accordance with Generally Accepted Accounting Principles and examined
by an independent certified public accountant.
(10) Binding reservation agreement. – 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. A purchase and sale
agreement for an independent living unit shall not be considered a binding
reservation agreement for the purposes of this Article.
(11) Cancel. – To terminate the force and effect of an agreement or contract.
(12) Continuing care. – 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 either
assisted living care, as defined in G.S. 131D-2.1, or nursing care, as defined
in G.S. 131E-176, or both, 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.
(13) Continuing care at home. – A program offered by a provider holding a
permanent license under this Article 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.
(14) Continuing care retirement community. – A retirement community consisting
of one or more structures where a provider renders continuing care to
residents. A distinct phase of development approved by the Commissioner
may be considered to be the continuing care r etirement community when a
project is being developed in successive distinct phases over a period of time.
(15) Control. – 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.
(16) Controlling person. – The person that controls an applicant or provider.
(17) Debt service coverage ratio. – 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. The quotient shall be calculated by
House Bill 357 Session Law 2025-58 Page 3
dividing the sum of total excess of revenues over or under expenses plus
interest expense, depreciation expense, amortization expense, other noncash
operating losses or expenses, and net cash proceeds from entrance fees, minus
entrance fee amortization, entrance fee refunds contractually past due, and
other noncash operating gains or revenues divided by annual debt service.
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 th e net
proceeds from entrance fees up to an amount equal to the aggregate of the
principal amount of the indebtedness.
(18) Deposit. – Any transfer of consideration made by a depositor to a provider to
reserve an independent living unit at a continuing care retirement community.
(19) Entrance fee. – 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.
(20) Escrow agent. – Any person approved by the Commissioner to hold entrance
fees and deposits required to be placed in escrow under this Article.
(21) Escrow agreement. – 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 Article are held by the escrow agent until release is
permitted in accordance with this Article.
(22) Hazardous condition. – A present, or reasonably anticipated future condition,
whereby (i) a provider is unlikel y to be able to meet its continuing care
obligations or to pay other obligations in the normal course of business or (ii)
the continued operation of a provider or continuing care retirement
community in its current condition is potentially harmful to depos itors,
residents, creditors, or the general public.
(23) Housing. – A living unit set forth in a continuing care contract.
(24) Independent certified public accountant. – A certified public accountant or
accounting firm in good standing with the American Institute of Certified
Public Accountants and in all states in which he or she is licensed to practice
who is not employed by, or otherwise affiliated with, an applicant or provider.
(25) Independent living unit. – A living unit in a continuing care retire ment
community for residents who are routinely able to carry out activities of daily
living, as defined in G.S. 160D-915, with minimal or no assistance. The
accommodations may be in the form of apartments, flats, houses, cottages,
condominium units, or roo ms. 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.
(26) Insolvent. – A condition whereby the provider is unable to pay its obligations
as they come due in the normal course of business.
(27) Living unit. – 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.
(28) Long-term care facility. – As defined in G.S. 131E-231.
(29) Manager. – 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.
Page 4 Session Law 2025-58 House Bill 357
(30) Net cash proceeds from entrance fees. – Total entrance fees received less
entrance fees refunded, and less initial entrance fees received for new
independent living units.
(31) Nonbinding reservation agreement. – 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.
(32) Obligated group. – 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.
(33) Occupancy rate. – 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 percent. The occupancy rate
shall be a rolling average that is equal to 100 times the quotient obtained by
dividing occupied living unit days by living unit days available. For purposes
of this definition, "living unit days available " is 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. For 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. The total shall equal the sum of each daily census for the given
time period.
(34) Periodic fee. – The fee charged to a resident on a monthly or other periodic
basis for housing, services, or both.
(35) Person. – An individual, partnership, firm, association, corporation,
joint-stock company, trust, any similar entity, or any combination of the
foregoing acting in concert.
(36) Presale. – Entering into an agreement or contract with a depositor for an
independent living unit that is not yet constructed or available for occupancy.
(37) Primary market area. – The area from which a continuing care retire ment
community will likely draw the majority of its residents.
(38) Prospective financial statements. – Financial forecasts or financial
projections, including the summaries of significant assumptions and
accounting policies prepared by an independent certified public accountant.
(39) Provider. – A person that offers or undertakes to provide continuing care under
a continuing care or continuing care at home contract, or that represents
himself, herself, or itself as providing continuing care. For the purposes of this
Article, the term provider shall also include a person who has been issued a
permit to accept deposits, a start-up certificate, or a preliminary certificate.
(40) Related party. – A person or persons that have common interests with a
provider as a result 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.
(41) Resident. – An individual who enters into 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.
House Bill 357 Session Law 2025-58 Page 5
(42) Satisfactory actuarial balance. – Meeting all of the required conditions, as of
a specified valuation date, as set forth in accordance with accepted actuarial
standard of practice.
"§ 58-64A-10. Rulemaking authority.
The Commissioner may adopt rules to implement the provisions of this Article.
"§ 58-64A-15. Dividends and distributions.
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 a ctuarial balance in an actuarial study filed with the
Commissioner pursuant to G.S. 58-64A-210, 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.
"§ 58-64A-20. Commissioner approval required to offer or provide continuing care.
No person shall engage in the business of offering or providing continuing care in this State
without a certification, license, permit, or other approval from the Commissioner as provided in
this Article. Engaging in the business of offering or providing continuing care in this State
includes all of the following:
(1) Accepting any deposit or any other payment that is related to continuing care.
(2) Entering into any nonbindin g reservation agreement, binding reservation
agreement, continuing care contract, or continuing care at home contract.
(3) Commencing construction of a prospective continuing care retirement
community.
(4) Converting an existing building or buildings to a continuing care retirement
community.
(5) 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 Artic le has been
inactivated, surrendered, or forfeited.
(6) Assuming responsibility for continuing care and continuing care at home
contracts.
(7) Advertising or marketing to the general 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.
"§ 58-64A-25. Leasing real property for a continuing care retirement community.
(a) 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.
(b) 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 all of the following:
(1) The terms of the proposed lease, including the proposed length of the lease
and any proposed purchase options.
(2) The owner of the real property and the owner's relationship to the applicant or
provider.
(3) The distance from any existing real property owned by the applicant or
provider.
"§ 58-64A-30. Required electronic filings and submissions.
Except when re quired by the Commissioner to submit a hard copy, all applicants and
providers shall submit all filings required by this Article electronically, in a form and manner
Page 6 Session Law 2025-58 House Bill 357
acceptable to the Commissioner and in compliance with the Uniform Electronic Transactions
Act.
"§ 58-64A-35. Waiver or modification.
The Commissioner may waive or modify any provision of this Article if the Commissioner
determines a waiver or modification is justified based on any of the following:
(1) A state of emergency or disaster being proclaimed in this State or for an area
within this State under G.S. 166A-19.20 or G.S. 166A-19.21 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 U.S.C. § 5121,
et seq.
(2) 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.
"§ 58-64A-40. Confidential treatment.
(a) All of the following shall be confidential and privileged, shall not be considered a
public record under either G.S. 58-2-100 or Chapter 132 of the General Statutes, shall not be
subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private
civil action:
(1) Any third -party management contract or proposed management contract
provided to the Commissioner pursuant to G.S. 58-64A-55(a)(3) or
G.S. 58-64A-240(a).
(2) Any lease agreement or proposed lease agreement provided to the
Commissioner pursuant to G.S. 58-64A-25 or G.S. 58-64A-55(a)(4).
(3) Any request for approval provided to the Commissioner pursuant to
G.S. 58-64A-230(d) or G.S. 58-64A-235(a).
(4) The actuarial study, other than the statement of actuarial opinion, provided to
the Commissioner pursuant to G.S. 58-64A-60(a)(3), 58 -64A-90(b)(3),
58-64A-185(a)(4), or 58-64A-210.
(5) Any market study provided to the Commissioner pursuant to
G.S. 58-64A-55(a)(9) or G.S. 58-64A-185(a)(5).
(6) Any feasibility study provided to the Commissioner pursuant to
G.S. 58-64A-60(a)(2) or G.S. 58-64A-90(b)(2).
(7) 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 in the course of an investigation or examination made pursuant
to G.S. 58-64A-295 or G.S. 58-64A-380.
(8) 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.
(b) Notwithstanding subsection (a) of this section, the Commissioner is authorized to 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.
(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 Article
House Bill 357 Session Law 2025-58 Page 7
or with whom any documents, materials, or other information are shared pursuant to this Article
shall be permitted or required to testify in any private civil action concerning any confidential
documents, materials, or information subject to subsection (a) of this section.
(d) Any document, material, or other information that is shared with the Commissioner
that is not covered under subsection (a) of this section 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 to G.S. 132-1.2.
(e) To assist in the performance of the duties imposed by this Article, the Commissioner
may do both of the following:
(1) Share documents, materials, or other information, including the confidential
and privileged documents, materials, or information subject to subsection (a)
or (d) of this section, with other state, federal, and international regulatory
agencies, and with state, federal, a nd 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.
(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 mainta in 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.
(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 is solely
responsible for the administration, execution, and enforcement of the provisions of this Article.
(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) of this section.
"§ 58-64A-45. Advertisement in conflict with disclosures and contracts.
A provider may 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 Article or materially conflicts with any continuing care
or continuing care at home contract offered by the provider.
"Part 2. Approval, Certification, Licensure, and Permitting Process.
"§ 58-64A-50. Permit to accept deposits.
(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
two hundred dollars ($200 .00) and fi ling an application on a form prescribed by the
Commissioner. The application form shall include all of the following:
(1) The name, business address, and telephone number of the applicant.
(2) The name and business address of the applicant's controlling person, if control
of the applicant does not reside with the applicant.
(3) A proposed nonbinding reservation agreement.
(4) A proposed escrow agreement that meets the requirements of
G.S. 58-64A-105.
(5) A description of the proposed continuing care retirement community which
shall include all of the following:
a. The location of the proposed continuing care retirement community.
Page 8 Session Law 2025-58 House Bill 357
b. The types of living units to be offered.
c. The types of continuing care contracts to be offered.
d. A description of th e services that will be provided to residents,
including an indication if any services will be provided by any related
parties or third parties.
e. A description of the applicant 's corporate structure and experience in
developing or operating continuing ca re retirement communities,
including the experience of any related party of the applicant.
(b) The Commissioner shall comply with the review schedule in G.S. 58-64A-70 in
response to an application for a permit to accept deposits.
(c) The Commissioner shall approve an application for a permit to accept deposits if all
of the following requirements are met:
(1) The application complies with this section.
(2) None of the grounds for denial listed in G.S. 58-64A-280 apply to the
applicant.
(3) The proposed escrow agreement meets the requirements of G.S. 58-64A-105.
(4) The proposed escrow agent and depository are acceptable in accordance with
G.S. 58-64A-100.
(d) After the issuance of a permit to accept deposits, the applicant may do all of the
following:
(1) Disseminate materials describing the intent to develop a continuing care
retirement community.
(2) Enter into nonbinding reservation agreements.
(3) Collect deposits in an amount not to exceed five thousand dollars ($5,000).
All deposits collected shall be placed in escrow and shall only be released in
accordance with Part 4 of this Article.
(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.
"§ 58-64A-55. Start-up certificate.
(a) A person may apply for a start -up certificate by paying an application fee of two
thousand dollars ($2,000) and submitting all of 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. If the applicant is a corporation, the chief executive
officer or other authorized individual shall sign the statement. 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 cer tificate 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.
(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.
(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.
House Bill 357 Session Law 2025-58 Page 9
If the applicant intends to lease any of the real property of the continuing care
retirement community and to collect entrance fees, Commissioner approval
must be received pursuant to G.S. 58-64A-25.
(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 do all of the following:
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.
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 G.S. 58-64A-150.
(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 G.S. 58-64A-70 in
response to an application for a start-up certificate.
(c) The Commissioner shall approve an application for a start -up certificate if all of t he
following requirements are met:
(1) The application complies with this section.
(2) None of the grounds for denial listed in G.S. 58-64A-280 apply to the
applicant.
(3) The disclosure statement meets the requirements of G.S. 58-64A-150.
(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.
(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 do all of the following:
(1) Require the provider to submit periodic sales, development, and unaudited
financial statements in a form prescribed by the Commissioner.
(2) Post the disclosure statement of the continuing care retirement community on
the Department's website.
Page 10 Session Law 2025-58 House Bill 357
(e) After receiving a start-up certificate from the Commissioner, the provider may do all
of the following:
(1) Enter into binding reservation agreements and continuing care contracts.
(2) Accept entrance fees and deposits greater than five thousand dollars ($5,000).
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 4 of this Article.
(3) Begin site preparation work.
(4) Construct model independent living units for marketing.
"§ 58-64A-60. Preliminary certificate.
(a) A person may apply for a preliminary certificate by submitting all of 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. If the applicant is a corporation, the chief executive
officer or other authorized individual shall sign the statement. 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. The
study shall include all of the following:
a. A description of the proposed continuing care retirement commun ity,
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 all of the following:
1. A description of all debt to be incurred by the applicant,
including the source, anticipated terms, and costs of financing.
2. A description of the source and amount of equity to be
contributed by the applicant or any other person.
3. 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.
4. 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 th e applicant expects to
incur prior to the commencement of operation. 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.
5. An estimate of any reserves required by financing and the
operating reserve required pursuant to Part 11 of this Article.
House Bill 357 Session Law 2025-58 Page 11
6. 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 all of the following:
1. The population, household growth, age distribution, household
income, household tenure, and resale housing values within the
primary market area.
2. A demand analysis of the range of likely target consumers
within the primary market area as well as estimated penetration
rates.
3. 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.
4. 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.
5. The types of services and amenities desired and the forms of
ownership or interest in real property preferred.
6. Existing and planned competition in the primary market area.
e. A description of the sales and mar keting plan, including all of the
following:
1. Marketing projections, anticipated sales, and cancellation
rates.
2. Month-by-month projections of independent living unit sales
through stabilized occupancy.
3. A description of the marketing methods, staffi ng, and
advertising media to be used by the applicant.
4. 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 continuin g
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 stud y and the
experience of the person in preparing similar studies or otherwise
consulting in the field of continuing care.
Page 12 Session Law 2025-58 House Bill 357
k. An evaluation and opinion by the person who prepared the feasibility
study of the underlying assumptions used as a basis for the stu dy,
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.
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. An actuarial projection of future
population flows and adult care home bed and nursing bed needs shall use (i)
appropriate mortality, morbidity, withdrawal, occupancy, and other
demographic assumptions and (ii) 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 requir ements of
G.S. 58-64A-150.
(5) At least one of the following:
a. Confirmation of signed binding reservation agreements or continuing
care contracts for at least fifty percent (50%) of the new independent
living units, reserved by a deposit equal to at least ten percent (10%)
of the entrance fee.
b. Confirmation of signed binding reservation agreements or continuing
care contracts for at least fifty percent (50%) 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.
c. Confirmation of one hundred thousand dollars ($100,000) placed on
deposit with the Commissioner, if the applicant (i) does not collect
presale entrance fees or deposits in an amount equal to at least ten
percent (10%) of the entrance fee or (ii) does not collect presale
entrance fees or deposits and does not collect nonrefundable deposits
equal to the periodic fee of at least two months. This deposit is subject
to the following requirements:
1. The deposit shall only be returned to the applicant upon
issuance of a permanent license.
2. The deposit shall be made in accordance with G.S. 58-5-20.
3. 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. Forfeited deposits shall
be remitted to the Civil Penalty and Forfeiture Fund in
accordance with G.S. 115C-457.2.
(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 th e review schedule in G.S. 58-64A-70 in
response to an application for a preliminary certificate.
(c) The Commissioner shall approve an application for a preliminary certificate if all of
the following requirements are met:
House Bill 357 Session Law 2025-58 Page 13
(1) The application complies with this section.
(2) None of the grounds for denial listed in G.S. 58-64A-280 apply to the
applicant.
(3) The feasibility study meets all of 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 an ticipated uses of funds to (i) construct or
acquire the proposed continuing care retirement community and (ii)
fund start -up losses and provide sufficient resources to ensure full
performance of the applicant's continuing care contract obligations.
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 all of 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.
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 subdivision (5) of subsection
(a) of this section.
(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.
(8) The applicant d emonstrates an ability to comply with this Article 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 do both of the
following:
(1) Require the provider to submit periodic sales, development, and unaudited
financial statements in a form prescribed by the Commissioner.
(2) Post the disclosure statement of the continuing care retirement community on
the Department's website.
(e) After receiving a preliminary certificate from the Commissioner, the provider may do
both of the following:
(1) Construct a continuing care retirement community.
Page 14 Session Law 2025-58 House Bill 357
(2) Convert an existing structure or structures into a continuing care retirement
community.
"§ 58-64A-65. Permanent license.
(a) A person may apply for a permanent license by submitting all of 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. If the applicant is a corporation, the chief executive
officer or other authorized individual shall sign the statement. If there are
multiple applicants, these requirements shall apply to each applicant.
(2) An updated disclosure statement that meets the requirements of
G.S. 58-64A-150.
(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 percent (70%) of the new
independent living units, reserved by a deposit equal to at least ten
percent (10%) of the entrance fee.
b. Confirmation of signed binding reservation agreements or continuing
care contracts for at least seventy percent (70%) 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.
c. Confirmation of the one hundred thousand dollar ($100,000) deposit
required pursuant to G.S. 58-64A-60(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
G.S. 58-64A-25.
(6) Confirmation that the applicant is in compliance with all other state, federal,
municipal, and county laws and regulations. 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.
(8) Evidence that the applicant has in place the operating reserve required by Part
11 of this Article.
(b) The Commissioner shall comply with the review schedule in G.S. 58-64A-70 in
response to an application for a permanent license.
(c) The Commissioner shall approve an application for a permanent license if all of the
following requirements are met:
(1) The application complies with this section.
(2) None of the grounds for denial listed in G.S. 58-64A-280 apply to the
applicant.
(d) After receiving a permanent lic ense from the Commissioner, the provider may do
both of the following:
(1) Open the continuing care retirement community.
House Bill 357 Session Law 2025-58 Page 15
(2) Provide continuing care.
(e) If the Commissioner determines that the requirements of subsection (c) of this section
are not met, the Commissioner may do either of the following:
(1) Deny the application.
(2) Issue a restricted permanent license with an explanation of (i) the restrictions
established by the Commissioner under subsection (f) of this section and (ii)
the conditions the provider must 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
10 business days of (i) all restrictions imposed by the restricted permanent license and (i i) all
conditions that the provider must satisfy to qualify for a permanent license.
(g) After issuing a permanent license or restricted permanent license, the Commissioner
shall do both of the following:
(1) Require the provider to submit periodic occupancy reports and financial
statements in a form prescribed by the Commissioner.
(2) Post the disclosure statement of the continuing care retirement community on
the Department'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 Article.
"§ 58-64A-70. Review schedule.
The Commissioner shall comply with the following schedule in response to an application
for (i) a permit to accept deposits, (ii) a start -up certificate, (iii) a preliminary certificate, (iv) a
permanent license, (v) an expansion, (vi) a continuing care at home license, (vi i) an expansion
notification, and (viii) a request for approval pursuant to G.S. 58-64A-230, 58 -64A-235, and
58-64A-240:
(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 10 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 applicati on or expansion notification,
and within 30 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. 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.
(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 p ermit to accept deposits and an
expansion notification.
b. Within 30 days for a start-up certificate, permanent license, continuing
care at home license, expansion, and a request for approval.
Page 16 Session Law 2025-58 House Bill 357
c. Within 45 days for a preliminary certificate.
"§ 58-64A-75. 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 Article
expires 36 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 both of the following:
(1) The reasons why the provider has not applied for a start -up certificate or
preliminary certificate, as applicable.
(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 do one of the
following:
(1) If the Commissioner determines 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 pro vider to update information previously filed pursuant to
G.S. 58-64A-50 or G.S. 58-64A-55 before approving any extension. There is
no limit to the number of extensions that may be granted by the
Commissioner.
(2) If the Commissioner determines that 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 10 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.
"§ 58-64A-80. 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 Article, 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
30 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 wi th the outcome of the review and seeks a
hearing under Article 3A of Chapter 150B of the General Statutes, the applicant shall make a
written demand upon the Commissioner for the hearing within 30 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 Article, no portion of the fee associated with the application, notification, or
request for approval shall be refunded.
"Part 3. Expansion.
"§ 58-64A-85. Expansion notification.
(a) Prior to marketing and collecting deposits for a proposed expansion of a continuing
care retirement community that is twenty percent (20%) or more of existing independent living
units, a provider shall do both of the following:
(1) Notify and obtain written approval from the Commissioner.
(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. This
House Bill 357 Session Law 2025-58 Page 17
notification shall include the description required by subdivision (b)(1) of this
section.
(b) The expansion notification to the Commissioner required by this section shall include
all of the following:
(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 esc row agreement that meets the requirements of
G.S. 58-64A-105.
(4) An updated disclosure statement that meets the requirements of
G.S. 58-64A-150.
(c) The Commissioner shall comply with the review schedule in G.S. 58-64A-70 in
response to an expansion notification.
(d) The Commissioner shall approve the expansion notification if all of the following
requirements are met:
(1) The expansion notification complies with this section.
(2) None of the grounds for denial listed in G.S. 58-64A-280 apply to the
provider.
(3) The proposed escrow agreement meets the requirements of G.S. 58-64A-105.
(4) The proposed escrow agent and depository are acceptable in accordance with
G.S. 58-64A-100.
(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 do all
of the following:
(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.
(3) Collect entrance fees and deposits for the proposed independent living units.
All deposits collected shall be placed in escrow and shall only be released in
accordance with Part 4 of this Article, unless otherwise exempt ed by the
Commissioner.
"§ 58-64A-90. Expansion application.
(a) Prior to commencing construction of an expansion of a continuing care retirement
community that is twenty percent (20%) or more of existing independent living units, a provider
shall do both of the following:
(1) Receive Commissioner approval of an expansion notification pursuant to
G.S. 58-64A-85.
(2) Apply to the Commissioner for approval to commence construction.
(b) The application required by this section shall include all of the following:
(1) An application fee of one thousand dollars ($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 assump tions that projects the market and
Page 18 Session Law 2025-58 House Bill 357
financial viability of the proposed expansion. The study shall include all of
the following items:
a. A description of the applicant's proposed expansion project, including
the number of independent living units being add ed, fee structure, a
description of how the projected fees were computed, and the
anticipated project time line.
b. A description of the construction plans, construction financing, and
permanent financing for the proposed expansion project, including all
of the following:
1. A description of all debt to be incurred by the applicant,
including the source, anticipated terms, and costs of financing.
2. A description of the source and amount of any equity to be
contributed by the applicant.
3. 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.
4. A statement itemizing all estimated project costs, including the
real property costs, the cost of designing and co nstructing the
proposed expansion, and all similar costs that the applicant
expects to incur prior to the opening of the expansion. This
itemization shall identify all costs related to the proposed
expansion, including financing expenses, resident acquisit ion
costs, marketing costs, and furniture, fixtures, and equipment.
5. An estimate of any reserves required by financing and the
operating reserve required pursuant to Part 11 of this Article.
c. An analysis of the potential market for the proposed expansi on,
addressing all of the following:
1. The population, household growth, age distribution, household
income, household tenure, and resale housing values within the
primary market area.
2. A demand analysis of the range of likely target consumers
within the primary market area as well as estimated penetration
rates.
3. 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.
4. Existing and planned competition in the primary market area.
d. A description of the sales and marketing plan, including all of the
following:
1. Marketing projections, an ticipated sales, and cancellation
rates.
2. Month-by-month projections of independent living unit sales
through stabilized occupancy.
3. A description of the marketing methods, staffing, and
advertising media to be used by the applicant.
4. 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.
House Bill 357 Session Law 2025-58 Page 19
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 fa ctors 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.
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 accorda nce 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. Applicants who do not collect entra nce 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. An
actuarial projection of f uture population flows and adult home care bed and
nursing bed needs shall use (i) appropriate mortality, morbidity, withdrawal,
occupancy, and other demographic assumptions and (ii) 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
G.S. 58-64A-150.
(5) If applicable, confirmation that the applicant has secured comm itments 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 G.S. 58-64A-25.
(7) Any other data and pertinent information as the Commissioner m ay
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 G.S. 58-64A-70 in
response to an expansion application.
(d) The Commissioner shall approve the expansion application if all of the following
requirements are met:
(1) The expansion application complies with this section.
(2) None of the grounds for denial listed in G.S. 58-64A-280 apply to the
applicant.
(3) The feasibility study meets all of 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.
Page 20 Session Law 2025-58 House Bill 357
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.
c. Demonstrates the existence of a market for the proposed expansion
based on reliable data, which meets all of the following requirements:
1. Is specific to the continuing care retirement community.
2. Considers existing and proposed competition in the primary
market area.
3. 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 Article.
(5) The applicant, if a pplicable, 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) 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 l iving 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.
"§ 58-64A-95. 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 4 of this Article unless otherwise exempted by the Commissioner.
"Part 4. Escrow Account.
"§ 58-64A-100. Escrow account required.
All entrance fees and deposits, when required by this Article, 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.
"§ 58-64A-105. 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, all of the following:
(1) A provision requiring that all f unds received shall be placed into the escrow
account in accordance with G.S. 58-64A-115.
(2) A provision for investment of escrow account funds in a manner consistent
with G.S. 58-64A-120.
(3) A provision regarding the payment of interest earned on the funds held in the
escrow account in the manner specified in G.S. 58-64A-125.
House Bill 357 Session Law 2025-58 Page 21
(4) A provision for refunds to depositors in the manner specified by
G.S. 58-64A-135.
(5) A provision that any refund or release of escrow account funds be performed
in the manner specified in G.S. 58-64A-135 and G.S. 58-64A-140, including
a statement as to whom payment of interest earned on the funds will be made.
(6) A statement that the purp ose 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 subdivision (9) of this section, certifying the
amount of funds held on deposit.
(11) A provision requ iring 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.
(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.
"§ 58-64A-110. Changes to escrow agreement.
All changes to an escrow agreement shall b e submitted to, and approved by, the
Commissioner before use by a provider.
"§ 58-64A-115. 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 Article within 10 business days after
receipt by the provider.
(b) Any deposit delivery to an escrow agent pursuant to this Article shall be accompanied
with a copy of the executed nonbinding reservation agreement, bindi ng 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.
"§ 58-64A-120. Investment of funds in escrow.
(a) All entrance fees and deposits subject to an escrow agreement under this Article 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.
(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 Article.
"§ 58-64A-125. 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
Page 22 Session Law 2025-58 House Bill 357
the requirements of this Article 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.
"§ 58-64A-130. 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 Article to refunds of
their entrance fees or deposits.
"§ 58-64A-135. 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 Article.
(5) Written notice from the Commissioner.
(b) Refunds required in subsection (a) of this section shall be paid within 10 business
days after the escrow agent receives the written notice described in subsection (a) of this section.
(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 prior to 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.
"§ 58-64A-140. Release of escrowed entrance fees and deposits.
(a) To request a release of the first twenty-five percent (25%) of each escrowed entrance
fee and deposit, a provider shall petition in writing to the Commissioner and certify all of the
following:
(1) The provider has presold at least fifty percent (50%) of the proposed
independent living units, having received a minimum ten percent (10%)
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 percent (50%) 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 G.S. 58-64A-25.
(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 percent (90%) of t he following amount: (i) the aggregate cost of
House Bill 357 Session Law 2025-58 Page 23
constructing or purchasing, equipping, and furnishing the proposed continuing
care retirement community, plus (ii) not less than ninety percent (90%) of the
funds estimated to be necessary to fund start -up los ses and to reasonably
assure full performance of the provider 's future continuing care obligations,
as reported in the statement of cash flows required by
G.S. 58-64A-150(a)(37).
(b) To request a release of the remaining seventy -five percent (75%) of escrowed
entrance fees and deposits, a provider shall petition in writing to the Commissioner and certify
all of the following:
(1) The provider has presold at least seventy percent (70%) of the proposed
independent living units, having received a minimum ten percent (10%)
deposit of each applicable entrance fee and maintains at least seventy -five
percent (75%) of each entrance fee or deposit received in escrow, or has
maintained an independent living unit occupancy minimum of seventy percent
(70%) for at least 60 days. Any independent living unit for which a refund is
pending shall not be counted toward the seventy percent (70%) requirement.
(2) Construction or purchase of the independent living units has been completed
and an occupancy permit, if applicabl e, has been issued by the local
government having authority to issue those permits.
(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 subsection (b) of this section.
(d) The escrow agent shall release the entrance fees and depo sits 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 Commission er shall apply the requirements in
subsections (a) and (b) of this section 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 grou p 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 ref und,
either because of timing or because another depositor has not reserved a similar independent
living unit and paid the necessary entrance fee or deposit in order to trigger a refund to the
canceling depositor.
"Part 5. Disclosure Statement.
"§ 58-64A-145. Definitions.
The following definitions apply to this Part:
(1) Adjusted net operating margin ratio. – A profitability ratio that measures the
margin generated from the core operations of a provider and net cash proceeds
from entrance fees. The quotie nt shall be 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.
(2) Average daily cash operating expenses. – The total expenses of a provid er
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 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.
Page 24 Session Law 2025-58 House Bill 357
(3) Capital expenditures as a percentage of depreciation ratio. – A capital
structure ratio that indicates the level of capital reinvestment by a provider.
The quotient shall be computed by dividing total purchases of property, plant,
and equipment by total depreciation expense.
(4) Cushion ratio. – A liquidity ratio that measures a provider 's ability to pay its
annual debt service using its unrestricted cash and investments. The quotient
shall be computed by dividing unrestricted cash and investments by annual
debt service.
(5) Days cash on hand ratio. – A liquidity ratio that measures the number of days
of cash operating expenses a provider could cover using its existing
unrestricted cash and investments. The quotient shall be computed by dividing
unrestricted cash and investments by average daily cash operating expenses.
(6) Multi-entity organization. – A collection of distinct legal entitie s that are
under common control.
(7) Net operating margin ratio. – A profitability ratio that measures the margin
generated from the core operations of a provider. The quotient shall be
calculated by dividing resident operating income by resident revenue.
(8) Operating ratio. – 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. The
quotient shall be 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.
(9) Resale fee. – A contractual assessment by the provider against the proceeds
from the sale of an independent living unit.
(10) Resident expense. – Total operating expenses excluding interest expense,
depreciation expense, amortization expense, and income taxes.
(11) Resident revenue. – Total operating revenue excludin g interest and dividend
income, entrance fee amortization, and contributions.
(12) Unrestricted cash and investments. – The sum of the provider 's unrestricted
cash, cash equivalents and investments, and any provider restricted funds that
are available to p ay debt or to pay operating expenses. For purposes of this
definition, the assets serving as the operating reserve required by
G.S. 58-64A-245 shall be considered unrestricted.
(13) Unrestricted cash and investments to long -term debt ratio. – A capital
structure ratio that (i) measures a provider 's position in available cash and
marketable securities in relation to its long -term debt and (ii) measures a
provider's ability to withstand annual fluctuations in cash. The quotient shall
be calculated by dividing unrestricted cash and investments by total long-term
debt, less the current portion of long-term debt.
"§ 58-64A-150. Disclosure statement.
(a) A provider shall prepare a disclosure statement for each continuing care retirement
community operated or to be operated in this State that includes all of the following information:
(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.
House Bill 357 Session Law 2025-58 Page 25
(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 indicatin g whether the audited financial statements
required by sub division (36) of this subsection are prepared on a
consolidated basis with all entities included and , if not, a statement
indicating how the audited financial statements are prepared.
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 (i) a ll 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 percent (10%) or greater equity or beneficial interest in the provider or the
provider's controlling person and (ii) a ny 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. If any person required to be named pursuant to this subdivision 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. A provider shall not disclose the personal address
of any person required to be named pursuant to this subdivision, unles s
required to do so by another provision of law or a court order.
(7) The following information on all persons named in response to subdivisions
(1), (5), and (6) of this subsection:
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 percent (10%) 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 five
thousand dollars ($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.
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 brief summary of the role and respo nsibilities of the board of directors or
other governing body of the provider and, if applicable, the provider 's
Page 26 Session Law 2025-58 House Bill 357
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 five
thousand dollars ($5,000) or more within any fiscal year, not already disclosed
pursuant to subdivision (7) or (15) of this subsection, 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 estima ted 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 pa rt 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 o f
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 ex isting 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 prim ary 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 12-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
House Bill 357 Session Law 2025-58 Page 27
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 G.S. 58-64A-360 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 servi ces are included for
specified periodic fees and which services are or will be made available for an
extra charge. The description shall include a statement describing what health
care services are or will be provided by the provider directly and what heal th
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 all of the following:
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 o f 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 fe es 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 percent increase, and average dollar amount of
each increase in periodic fees for the previo us 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. If the continuing care retirement community is
not yet in op eration, the provider shall include a table showing the
expected frequency, average percent increase, and average dollar
amount of each increase in periodic fees utilized in the five -year
prospective financial statements required pursuant to subdivision (37)
of this subsection.
c. A table showing the current entrance fee charges as well as the
frequency, average percent 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. If the continuing care retirement community is
not yet in operation, the provider shall include a table showing the
expected frequency, average percent increase, and average dollar
amount of each increase in entrance fees utilized in the five -year
prospective financial statements required pursuant to subdivision (37)
of this subsection.
(26) For providers who offer refundable entrance fee continuing care or continuing
care at home contracts, a statement disclosing:
Page 28 Session Law 2025-58 House Bill 357
a. The conditions that must be met before all or any portion of an
entrance fee will be refunded.
b. The number and aggregate dollar amount of refundable entrance fee
refunds that, as of the provider's most recent fiscal year-end:
1. Will be due once all contractual conditions are met.
2. Are currently due, including a disclosure of the number and
aggregate dollar amount of refunds that are 30 or more days
past due.
3. 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.
4. 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 permitted 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 subdivision (26) of
this subsection.
(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 G.S. 58-64A-100 and G.S. 58-64A-245, 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. The information provided shall also include a schedule detailing
how the operating reserve for the continuing care retirem ent community has
been calculated which shall agree with the amount calculated and reported to
the Commissioner pursuant to G.S. 58-64A-270.
House Bill 357 Session Law 2025-58 Page 29
(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 150 days or if an audit opinion was received other than an
unqualified opinion.
(36) Audited financial statements meeting the requirements of G.S. 58-64A-200.
(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 G.S. 58-64A-200, and that meet all of the
following requirements:
a. Include a summary of significant assumptions and a summary of
significant accounting policies.
b. Include, if financial projections, an identification of the hypothetical
assumptions and a description of the limitations on the usefulness of
the presentation.
c. Include as supplemental information, if prepared on a consolidated or
combined basis, a consolidating or combining:
1. Balance sheet.
2. Statement of operations and changes in net assets or equity.
3. Statement of cash flows.
d. Include a statement of operations as supplemental information for each
continuing care retirement community operate d under this Article 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 Article.
e. Contain the same line items and categories as the annual audited
financial statements filed with the Commissioner pursuant to
G.S. 58-64A-195.
f. For continuing care retirement communities that are under
development, the prospective financial statements required by this
subdivision shall include narrative disclosure detailing all significant
assumptions used in the preparation of the prospective financial
statements, including all of the following:
1. 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.
2. 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.
3. 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 obliga tions of
the provider under continuing care contracts.
4. The total entrance fees to be received from or on behalf of,
residents at, or prior to, commencement of operations along
Page 30 Session Law 2025-58 House Bill 357
with anticipated accounting methods used in the recognition of
revenues from and expected refunds of entrance fees.
5. A description of any equity capital to be received by the
provider.
6. The cost of the acquisition of the continuing care retirement
community or, if the continuing care retirement community is
to be constructed, t he estimated construction cost and cost to
acquire the land.
7. Related costs, including financing and development costs, that
the provider expects to incur or become obligated for prior to
the commencement of operations.
8. The marketing and resident acqu isition costs to be incurred
prior to commencement of operations.
9. 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 (i) 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 (ii) 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. 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. 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:
1. Days cash on hand ratio.
2. Cushion ratio.
b. Profitability ratios:
1. Operating ratio.
2. Net operating margin ratio.
3. Adjusted net operating margin ratio.
c. Capital structure ratios:
1. Debt service coverage ratio.
2. Unrestricted cash and investments to long-term debt ratio.
3. Capital expenditures as a percentage 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 t he summary where the full
House Bill 357 Session Law 2025-58 Page 31
examination report may be inspected at the continuing care retirement
community. The summary required by this subdivision shall not be required
if the last examination report is more than three years old.
(42) Any other material i nformation 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 all of the following:
(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 Article.
(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 North
Carolina Department of Insurance in accordance with this Article.
(6) That the disclosure statement contains all of the information requir ed by this
Article, 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 Article.
(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 Department's website in accordance with this Article.
"§ 58-64A-155. Required delivery of disclosure statement.
(a) A provider shall deliver a current disclosure statement meeting the requirements of
G.S. 58-64A-150 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: (i) the execution of a binding reservation agreement, continuing care contract, or
continuing care at home contract, or (ii) the tra nsfer of any money or other consideration, other
than a nonbinding reservation agreement deposit, to a provider by or on behalf of a prospective
Page 32 Session Law 2025-58 House Bill 357
resident. For purposes of this subsection, a disclosure statement is current if (i) it is dated within
one year plus 160 days prior to the date of delivery and (ii) it 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 t he 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.
(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.
b. Sending separate notice of the posting described in sub-subdivision a.
of this subdivision 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 (i) the date, (ii) the name of t he person signing, and (iii) 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.
"§ 58-64A-160. Annual revised disclosure statements.
(a) Within 150 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 G.S. 58-64A-150. The annual disclosure statement revision shall be accompanied by an annual
filing fee of two thousand dollars ($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 (i) the revised
disclosure statement has been received and recorded, (ii) the provider has met the filing
requirements of this section, and (iii) the annu al revised disclosure statement is now considered
to be the current disclosure statement for purposes of this Article. After sending the notice, the
Commissioner shall post the annual revised disclosure statement on the Department '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 t he provider, extend the
due date of the annual disclosure statement revision for a reasonable period of time not to exceed
30 days.
(d) If the annual disclosure statement revision is not received by the due date and no
extension has been granted, a one thousand dollar ($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.
"§ 58-64A-165. 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
House Bill 357 Session Law 2025-58 Page 33
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 s tatement is revised in accordance with this section or
G.S. 58-64A-150(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 C ommissioner shall notify the provider in writing that the revised disclosure
statement has been received and recorded and is considered to be the current disclosure statement
for purposes of this Article. After sending this notification, the Commissioner s hall post the
revised disclosure statement on the Department '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 state ment available to all residents either in
electronic or paper form.
"Part 6. Binding Reservation Agreement and Continuing Care Contract.
"§ 58-64A-170. Binding reservation agreement.
A binding reservation agreement shall include all of the following:
(1) A provision that the person entering into the agreement may rescind the
agreement within 30 days following the later of the following occurrences: (i)
the execution of the agreement or (ii) the receipt of a disclosure statement that
meets the requirements of G.S. 58-64A-150.
(2) A provision that the agreement shall be automatically canceled if either of the
following occurs: (i) a depositor dies before signing a continuing care contract
or (ii) 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. All of 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 (i) three thousand dollars ($3,000) or (ii) two
percent (2%) of the entrance fee. 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 Article.
(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.
"§ 58-64A-175. Continuing care contract.
(a) A continuing care contract shall include all of the following:
(1) A provision that the person contracting with the provider may rescind the
contract within 30 days following the later of (i) the execution of the contract
or (ii) the receipt of a disclosure statement that meets the requirements of
G.S. 58-64A-150, and a resident to whom the contract pertains is not required
Page 34 Session Law 2025-58 House Bill 357
to move into the continuing care retirement community before the expiration
of the 30-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 (i) periodic fees specified in the contract and
applicable only to the period a living unit was actually occupied by the
resident; (ii) those nonstandard costs specifically incurr ed by the provider at
the request of the resident and described in the contract or any contract
amendment signed by the resident; (iii) nonrefundable fees, if set out in the
contract; and (iv) a reasonable service charge, if set out in the contract, not to
exceed the greater of three thousand dollars ($3,000) or two percent (2%) of
the entrance fee. 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 Article.
(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 all of the following:
(1) All fees required of residents, includ ing 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.
(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 so as to be conspicuous:
"NOTICE
Because the authority to enter into continuing care contracts granted by the North Carolina
Department of Ins urance is neither a guarantee of performance by the provider nor an
endorsement of any continuing care contract provision, prospective residents must carefully
House Bill 357 Session Law 2025-58 Page 35
consider the risks, benefits, and costs before signing a continuing care contract and are strong ly
encouraged to seek financial and legal advice before doing so."
"Part 7. Continuing Care at Home.
"§ 58-64A-180. Home care services defined.
As used is this Part, "home care services" is defined in G.S. 131E-136.
"§ 58-64A-185. Application.
(a) No person shall arrange or provide continuing care at home unless licensed by the
Commissioner pursuant to this Article. Only a provider who has obtained a permanent license or
a restricted permanent license pursuant to this Article may apply to the Commissio ner for a
continuing care at home license. The application shall include all of the following:
(1) An application fee of five hundred dollars ($500.00).
(2) A draft amended disclosure statement containing a description of the proposed
continuing care at ho me 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. Providers who do not collect
entrance fees or some other type of up -front prepayment of costs are exempt
from this require ment 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.
(7) Evidence of the license required under Part 3 of Article 6 of Chapter 131E of
the General Statute s 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 G.S. 58-64A-70 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 all of the following requirements are met:
(1) The application complies with this section.
(2) None of the grounds for denial listed in G.S. 58-64A-280 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.
Page 36 Session Law 2025-58 House Bill 357
(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 G.S. 58-64A-150.
(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.
"§ 58-64A-190. Continuing care at home contract.
(a) A continuing care at home contract shall include all of the following provisions:
(1) A provision that the individual contracting with the provider may rescind the
contract within 30 days following the later of (i) the execution of the contract
or (ii) the receipt of a disclosure statement that meets the requirements of
G.S. 58-64A-150.
(2) A provision that, if a resident dies prior to 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 represent ative, shall receive a refund of all
money or other consideration transferred to the provider, less (i) periodic fees
specified in the contract and applicable only to the period when services were
provided to the resident; (ii) nonrefundable fees, if set out in the contract; and
(iii) a reasonable service charge, if set out in the contract, not to exceed the
greater of three thousand dollars ($3,000) or two percent (2%) of the entrance
fee, if any.
(4) A provision that any refund due to a resident for any o ther cancellation or
termination not provided for in subdivisions (1) and (2) of this subsection shall
be computed in accordance with the terms of the contract.
(b) A continuing care at home contract shall specify all of the following:
(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 u nit 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 no t 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.
House Bill 357 Session Law 2025-58 Page 37
(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 so as to be conspicuous:
"NOTICE
Because the authority to enter into continuing care at home contracts granted by the North
Carolina Department of Insurance is neither a guarantee of performance by the provider nor an
endorsement of any c ontinuing care at home contract provision, prospective residents must
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 8. Financial Reporting and Monitoring.
"§ 58-64A-195. 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 150 days following the
end of each fiscal year.
(b) Extensions of the filing date may be granted by the Commissioner for 30-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.
The request for extension must be received in writing not less than 10 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 the provisions in subsection (b)
of this section, a similar extension of 30 days is granted for the filing of the provider 's annual
disclosure statement.
"§ 58-64A-200. 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. However, 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 the following:
(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.
(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 pe rsons, 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
Page 38 Session Law 2025-58 House Bill 357
shall also include a statement of operations for each continuing care retirement
community operated by the provider under this Article.
(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 Article.
(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 Article.
(4) If the provider is not required by generally accepted accounting principles to
have their financial statements consolidated with other pe rsons, 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 must 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 Article, a statement of
operations for each continuing care retirement community operated by the
provider under this Article.
(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.
"§ 58-64A-205. Quarterly reporting.
Within 45 days after the end of each fiscal quarter , a provider shall file with the
Commissioner all of 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 G.S. 58-64A-195.
(2) The 12 -month daily average occupancy rate by living unit type at each
continuing care retirement community operated by the provider in this State
in a form prescribed by the Commissioner.
(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
House Bill 357 Session Law 2025-58 Page 39
person currently holding the position, a brief biography of the person
currently holding the position, and the date the position change took
place.
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.
"§ 58-64A-210. 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 this State and any continuing
care at home program that the provider is licensed for pursuant to this Article.
(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 thi s 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 t he Commissioner before the
expiration of three years following the effective date of this section. Thereafter, 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 45 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. Thereafter, 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 percent (20%) or more of one or mor e types of living units at a continuing
care retirement community during the provider's most recent fiscal year.
"§ 58-64A-215. 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 general public, the Commissioner
may require a provider licensed under this Article to file any of the following:
(1) Monthly unaudited financial statements in the format required by
G.S. 58-64A-205 which shall be due no later than 45 days after the end of
each month.
(2) Any other data, financial statements, and pertinent information as the
Commissioner may reasonably require regarding (i) the provider, (ii) the
provider's obligated group, (iii) the continuing care retirement community, or
(iv) any related party, if the provider relies on a contractual or financial
Page 40 Session Law 2025-58 House Bill 357
relationship with the related party in order to meet the financial requirements
of this Article, or has a material amount invested in, or has a material amount
of receivables due from, the related party.
"Part 9. Notification Requirements.
"§ 58-64A-220. Notifications to Commissioner and residents.
A provider shall notify the Commissioner and all residents in writing within 10 business days
whenever any of the following apply:
(1) The provider fails to maintain the operating reserve required pursuant to Part
11 of this Article.
(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 t han 30 days
contractually past due.
(4) The provider plans to reduce the number of any type of living unit by twenty
percent (20%) or more. The notification shall include a statement describing
the reasons for the reduction and the effect, if any, on resid ents and the
financial condition of the provider. For the purposes of this subdivision, 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 this State, including the
adoption of an assumed business name.
(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 this
State.
"§ 58-64A-225. 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 Article within 10
business days after the applicant or provider becomes aware of the change or deviation.
(b) Within 30 days after receiving notice of a material change or deviation, the
Commissioner shall advise the applicant or provider in writing whether any additional ac tion
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 Article 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 (i) assessed the potential impact of the material changes or deviations on the
applicant or provider and the interests of residents and deposito rs and (ii) taken any action
necessary under this Article 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 10. Other Transactions and Changes.
"§ 58-64A-230. 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 Article is transferable, and no
permit, certificate, or license issued pursuant to this Article 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 th e Commissioner before
House Bill 357 Session Law 2025-58 Page 41
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. 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) of
this section by filing a request for approval with the Commissioner, made under oath or
affirmation, at least 45 days prior to consummating the transaction. The req uest for approval
required by this subsection shall include all of the following:
(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.
(5) Any other information reasonably required by the Commissioner.
(e) The Commissioner shall comply with the review schedule in G.S. 58-64A-70 in
response to a request for approval pursuant to this section.
(f) The Commissioner shall approve a request for approval if all of the following
requirements are met:
(1) The request complies with this section.
(2) None of the grounds for denial listed in G.S. 58-64A-280 apply to the
applicant.
(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 10 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 12 of this Article if a provider violates the
provisions of this section.
"§ 58-64A-235. 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 Article 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 all of the following
information:
(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 t o 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.
Page 42 Session Law 2025-58 House Bill 357
d. For each individual listed pursuant to this subdivision, 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 10 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 fisc al 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 90 days prior
to 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 this 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 o bligation with residents which
will change as a result of the change in control.
(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 shal l comply with the review schedule in G.S. 58-64A-70 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 all
of the following requirements are met:
(1) The request for approval complies with this section.
(2) None of the grounds for denial listed in G.S. 58-64A-280 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 Article.
(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 this
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.
(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.
House Bill 357 Session Law 2025-58 Page 43
(e) A provider shall give written notice to all affected residents and depositors of the
proposed merger or other acquisition of control within 10 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 12 of this Article if a provider violates the
provisions of this section.
"§ 58-64A-240. Third-party management.
(a) A provider shall re quest the approval of the Commissioner before entering into a
contract with a third party for the management of a continuing care retirement community. The
request for approval required by this section shall include a copy of the proposed management
contract, the information required by subdivisions (6) and (7) of G.S. 58-64A-150(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 10 business days after the request for
approval is submitted to the Commissioner.
(c) The Commissioner shall comply with the review schedule in G.S. 58-64A-70 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.
(2) The proposed third -party manager is af filiated 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.
(2) That a manager is now, or was in the past, affiliated directly or indirectly
through ownership interest of ten percent (10%) 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 11. Operating Reserve.
"§ 58-64A-245. Operating reserve requirement.
(a) A provider shall maintain after the opening of a continuing care retirement
community an operating reserve equal to fifty percent (50%) of the total operating costs of the
continuing care retirement community forecasted or projected for the 12-month period following
the period covered by the most recent disclosure statement filed with the Department.
(b) Once a continuing care retirement community achieves a 12 -month daily average
independent living unit occupancy rate of ninety percent (90%) 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:
12-Month Daily Average Operating Reserve Requirement as a Percentage
Page 44 Session Law 2025-58 House Bill 357
Independent Living Unit of Total Operating Costs of the Continuing Care
Occupancy Rate Retirement Community
90% or above..................................................................................................................... 25.00%
86% to 89.9% .................................................................................................................... 31.25%
83% to 85.9% .................................................................................................................... 37.50%
80% to 82.9% .................................................................................................................... 43.75%
Below 80% ........................................................................................................................ 50.00%
(c) A provider who has a 12-month daily average independent living unit occupancy rate
equal to or in excess of ninety -three percent (93%) 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 twelve and one -half percent (12.5%) 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 percent (50%) of total operating costs as calculated in
accordance with G.S. 58-64A-250, 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 G.S. 58-64A-285.
(e) A provider shall notify all residents in writing within 10 business days if the
Commissioner, pursuant to subsection (d) of this section, 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.
"§ 58-64A-250. Operating reserve calculation.
(a) The five -year prospective financial statements as required by
G.S. 58-64A-150(a)(37), together with the 12 -month daily average independent living unit
occupancy rate of the continuing care retirement community, shall serve as the basis for
computing the operating reserve. 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 G.S. 58-64A-270.
(b) In addition to total operating expenses, total operating costs will 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. 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 in order
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 G.S. 58-64A-70
in response to a request for approval pursuant to this subsection.
(d) For providers that have voluntarily and permanently discontinued entering into
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 Article. In making this determination, the Commissioner m ay consider factors
House Bill 357 Session Law 2025-58 Page 45
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 12 -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 in excess of twenty percent (20%) shall be allowed to
exclude the total number of independent living units in the expansion project for a period of 18
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 calculat ion 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.
"§ 58-64A-255. Qualifying assets.
(a) A provider shall fund its operating reserve with any of the following qualifying assets:
(1) Cash.
(2) Cash equivalents.
(3) Investment grade securities. For the purposes of this subdivision, 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.
c. Investments in any fund that invests exclusively in investments of the
type described in sub -subdivision a. or b. of this subdivision, which
fund may also hold immaterial amounts of cash pending investment or
distribution.
(4) Corporate s tock that is traded on a public securities exchange that can be
readily valued and liqu idated for cash, including shares in mutual funds and
exchange-traded funds that hold portfolios consisting predominantly of these
stocks.
(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 Article 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 provide r'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.
"§ 58-64A-260. Surety bond; letter of credit.
(a) Alternative Funding Methods. – In lieu of funding the operating reserve with
qualifying assets as set forth in G.S. 58-64A-255, a provider may fund all or a portion of the
Page 46 Session Law 2025-58 House Bill 357
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) Surety Bond. – 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 this State. All of
the following shall apply to surety bonds issued pursuant to this Article:
(1) The surety bond may be exchanged or replaced with another surety bond if (i)
the surety bond applies to obligations and liabilities that arose during the
period of the original surety bond, (ii) the surety bond meets the requirements
of this section, and (iii) 90 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 45 days before cancellation or nonrenewal.
(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) Letter of Credit. – A provider may file a clean, irrevocable, uncondition al letter of
credit issued or confirmed by a qualified United States financial institution as defined in
G.S. 58-7-26(b) naming the Commissioner as beneficiary. The terms of the letter of credit shall
be approved by the Commissioner before issuance and bef ore its renewal or modification. The
letter of credit shall provide all of 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 te rm 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 30 days before the
expiration of the letter of credit.
(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.
"§ 58-64A-265. 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 tha t request by the Commissioner. This
request shall be submitted in writing for the Commissioner to review at least 10 business days
prior to the proposed date of release.
(b) In order 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 G.S. 58-64A-245. 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 noti ce to residents of any request made pursuant to
subsection (a) of this section at the same time the written request is submitted to the
Commissioner.
"§ 58-64A-270. Operating reserve certification.
At the time a provider files its annual audited financial statements pursuant to
G.S. 58-64A-195, a provider shall file a form acceptable to the Commissioner computing,
reporting, and certifying all of the following:
House Bill 357 Session Law 2025-58 Page 47
(1) The 12 -month daily average independent living unit occupancy rate at the
continuing care ret irement 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.
(3) A description of the qualifyi ng assets or other form of security and , if
applicable, their respective values, as defined and valued in accordance with
G.S. 58-64A-255, that the provider maintains for its operating reserve.
"Part 12. Offenses and Penalties.
"§ 58-64A-275. 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.
"§ 58-64A-280. Grounds for discretionary refusal, restriction, or revocation of a permit,
certificate, or license.
(a) The Commissioner may (i) deny an application or any other request for approval or
(ii) restrict or revoke any permit, certificate, license, or other authorization issued under this
Article if the Commissioner finds that the applicant or provider did any of the following:
(1) Willfully violated any provision of this Article or of any rule or order of the
Commissioner.
(2) Made a material omission, misstatement, or misrepresentation, or comm itted
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 Article.
(6) Failed to deliver to prospective residents a disclosure statement as required by
this Article.
(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 this State.
(10) Failed to maintain the escrow account required under this Article or released
a portion of an escrow account required to be maintained under this Article.
(11) Failed to deposit entrance fees and deposits into an escrow account as required
by this Article.
(12) Failed to maintain the operating reserve required under this Article or released
a portion of the operating reserve required to be maintained under this Article
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.
Page 48 Session Law 2025-58 House Bill 357
(15) Failed to fulfill obligations under continuing care and continuing care at home
contracts.
(16) Violated the provisions of G.S. 58-64A-230, 58-64A-235, or 58-64A-240.
(17) Failed to comply with the terms of a cease and desist order.
(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, certifi cate, or license be
revoked. That revocation order may be appealed to the Superior Court of Wake County in the
manner provided by G.S. 58-63-35. 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 20 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 Article 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.
"§ 58-64A-285. 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 examinat ion 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 Article.
(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.
House Bill 357 Session Law 2025-58 Page 49
(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 liabilitie s, 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 provid er 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 general public, or has made a false
or misleading entry or omitted an entry of mate rial 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.
(15) Any other finding determined by the Commissioner to be hazardous t o the
applicant's or provider's depositors, residents, creditors, or the general public.
"§ 58-64A-290. Corrective action plan.
(a) If the Commissioner has determined that a provider is in a hazardous condition, the
Commissioner may, in lieu of taking act ion under G.S. 58-64A-280 or G.S. 58-64A-335, and
after notice and opportunity for hearing, issue an order requiring a provider to (i) submit a
corrective action plan within 45 days and (ii) notify all residents and depositors within five
business days of the Commissioner's order. The corrective action plan shall include both of 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.
(2) A date when the provider anticipates it will rectify the problems and
deficiencies identified by the Commissioner.
(b) Within 45 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 30 days after notification from the Commissioner. If the corrective
action plan is approved, the provider shall immediatel y implement the corrective action plan,
distribute a copy of the plan to all residents and depositors, and begin reporting to the
Page 50 Session Law 2025-58 House Bill 357
Commissioner on the implementation and progress of the corrective action plan in accordance
with a schedule and in a format es tablished 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 actio n 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 G.S. 58-64A-155. Subsections (b) and (c) of G.S. 58-64A-155
shall apply to the corrective action plan and the most recent report to the Commissioner required
to be distributed pursuant to this subsection.
"§ 58-64A-295. Investigations and subpoenas.
(a) The Commissioner may make public or private investigations within or outside of this
State as necessary to (i) determine whether any person has violated or is about to violate any
provision of this Article, (ii) aid in the enforcement of this Article, or (iii ) verify statements
contained in any disclosure statement or other filing filed or delivered under this Article.
(b) For the purpose of any investigation or proceeding under this Article, the
Commissioner may require or permit any person to file a statemen t 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 Article, the
Commissioner or the Commissioner 's designee may exercis e all powers granted to the
Commissioner with respect to insurance companies.
"§ 58-64A-300. Civil liability.
(a) A provider who enters into a binding reservation agreement, continuing care contract,
or continuing care at home contract under this Article without having first delivered a disclosure
statement meeting the requirements of Part 5 of this Article 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 necess ary 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 Article, 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 regardles s 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 monthly by the Commissioner of Banks pursuant to
G.S. 24-1.1(c), 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 30 days of actual receipt.
House Bill 357 Session Law 2025-58 Page 51
(d) An action may not be maintained to enforce a liability created under this Article unless
brought before the expiration of three years after the alleged violation.
"§ 58-64A-305. Criminal penalties.
(a) Any person who willfully and knowingly violates any provision of this Article is
guilty of a Class 1 misdemeanor. The Commissioner may refer any available evidence concerning
a violation of this Article, or of any rul e adopted or order issued pursuant to this Article, to the
Attorney General or a district attorney. The Attorney General or a district attorney may institute
the appropriate criminal proceedings under this Article, with or without evidentiary referral from
the Commissioner. Nothing in this Article 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.
"§ 58-64A-310. Forfeiture.
(a) A permit, certificate, license, or other approval issued by the Commissioner pursuant
to this Article shal l 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 G.S. 58-64A-230.
(4) A change occurs in the control of the provider without the Commissioner's
approval in accordance with G.S. 58-64A-235.
(5) The provider merges with another person without the Commissioner 's
approval in accordance with G.S. 58-64A-235.
(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.
(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.
"§ 58-64A-315. Remedies available in cases of unlawful contracting.
(a) If the Commissioner determines that a provider is or has been violating the provisions
of this Article, 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 Article in accordance with
the provisions of this section.
(b) After the Commissioner issues an order pursuant to subsection (a) of this section,
every binding res ervation agreement, continuing care contract, or continuing care at home
contract entered into in violation of this Article 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 30 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 c are at home contract in
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question and to refund the full amount paid by the resident or depositor with interest at the rate
established monthly by the Commissioner of Banks pursuant to G.S. 24-1.1(c) 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.
"§ 58-64A-325. Nonexclusive remedies.
The civil, criminal, and administrative remedies available to the Commissioner pursuant to
this Article are not exclusive and may be sought and employed by the Commissioner, in any
combination, to enforce this Article.
"§ 58 -64A-330. S oliciting 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 this
State after the provider knew, or reasonably should have known, that the provider was impaired
or insolvent except with the written permissi on 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 15 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 13. Delinquency Proceedings.
"§ 58-64A-335. Supervision, rehabilitation, and liquidation.
(a) The Commissioner may commence a supervision proceeding pursuant to Article 30
of this Chapter or may apply to the Superior Court of Wake County 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 30 of this Chapter, 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 Article has been or is proposed to be released in violation of this
Article.
(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
Article.
(4) A provider is in a hazardous condition.
(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 sha ll 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
House Bill 357 Session Law 2025-58 Page 53
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 je opardy 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 co ndition, 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 this 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.
(g) G.S. 58-30-12 shall not apply to providers under this Article.
"§ 58-64A-340. Receiverships; exception for long-term care facility beds.
When the Commissioner has been appointed as a receiver under Article 30 of this Chapter
for a provider or a continuing care retirement community subject to this Article, the Department
of Health and Human Services 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 (i) the best interests of the
provider or (ii) 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.
"§ 58-64A-345. Contracts as preferred claims in liquidation.
(a) In the event of liqu idation 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) of this section, the claims of all conti nuing care and
continuing care at home contracts shall be subordinate to the liquidator 's cost of administration
or any secured claim.
"Part 14. Residents' Rights to Organization and Semiannual Meetings.
"§ 58-64A-350. 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.
"§ 58-64A-355. Right to organization.
A resident living in a continuing care retirement community operated by a provider licensed
under this Article 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 inc ludes the right to
establish a residents' council.
"§ 58-64A-360. 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 co ntinuing
care retirement community operated by the provider in this State for free discussions of subjects,
including, but not limited to, income, expenditures, financial trends and problems, and proposed
Page 54 Session Law 2025-58 House Bill 357
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 m eetings 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) of this section. The agenda and any materials that are distributed at the meetings
shall remain available upon request to residents for at lea st 60 days after each semiannual
meeting.
(d) Whenever a state of emergency or disaster has been proclaimed in this State or for an
area within this State under G.S. 166A-19.20 or G.S. 166A-19.21, 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 U.S.C. § 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.
(3) Video broadcast.
(e) If a semiannual meeting is held under subsection (d) of this section, 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, all of the following:
(1) A sound-only recording.
(2) A video recording with sound and picture.
(3) A digital or analog broadcast capable of being recorded.
(f) Recordings made pursuant to subsection (e) of this section shall remain available to
residents for at least 60 days after being made available to residents.
(g) A provider shall report in the disclosure statement required under G.S. 58-64A-150
the dates on which the semiannual meetings were held during the provider's previous fiscal year.
"Part 15. Miscellaneous Provisions.
"§ 58-64A-365. 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 Article intended for the benefit or protection of the resident
or the individual purchasing continuing care for the resident.
"§ 58-64A-370. Continuing Care Advisory Committee.
(a) There shall be a 12 -member Continuing Care Advisory Committee comprised of
providers, residents, and profess ionals 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.
House Bill 357 Session Law 2025-58 Page 55
d. One person who, on account of his or her vocation, employment, or
affiliation, can be class ified as a representative of residents of
continuing care retirement communities.
e. One person who, on account of his or her vocation, employment, or
affiliation, can be classified as a representative of c ontinuing care
retirement communities.
(2) Three members appointed by the President Pro Tempore of the Senate as
follows:
a. One person who, on account of his or her vocation, employment, or
affiliation, can be class ified as a representative of residents of
continuing care retirement communities.
b. One person who, on account of his or her vocation, employment, or
affiliation, can be classified as a representative of c ontinuing care
retirement communities.
c. One person who is a certified public accountant and is licensed to
practice public accountancy in this State.
(3) Three members appointed by the Speaker of the House of Representatives as
follows:
a. 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.
b. One person who, on account of his or her vocation, employment, or
affiliation, can be classified as a representative of continuing care
retirement communities.
c. One person who is a certified public accountant and is licensed to
practice public accountancy in this State.
(b) The Committee shall meet all of the following requirements:
(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 devel opments in the continuing care
retirement community industry, including continuing care at home and similar
programs, and problems or concerns of providers and residents.
(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 travel
expenses by the Department at the rates set out in G.S. 138-6.
"§ 58-64A-375. Other licensing or regulation.
(a) Nothing in this Article affects the authority of the Department o f Health and Human
Services or any successor agency otherwise provided by law to license or regulate any long-term
care facility.
(b) Continuing care retirement communities and providers licensed under this Article that
are also subject to the provisions of the North Carolina Condominium Act under Chapter 47C of
the General Statutes shall not be subject to the provisions of Chapter 39A of the General Statutes,
provided that the continuing care retirement community 's declaration of condominium does not
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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.
"§ 58-64A-380. Examination.
(a) The Commissioner or the Commissioner 's designee may, in the Commissioner 's
discretion, visit a provider offering continuing care in this 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 provisions of G.S. 58-2-131, 58-2-132, 58-2-133, 58-2-134, 58-2-155, 58-2-180,
58-2-185, and 58-6-5 apply to this Article and are hereby incorporated by reference.
(c) If a provider relies on a contractual or financial relationship with anoth er person in
order to meet the financial requirements of this Article, 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 10 business days after issuance."
SECTION 3. G.S. 105-164.13(74) reads as rewritten:
"(74) Sales of items by a provider of continuing care to its residents, other than sales
of alcoholic beverages. A provider of continuing care must pay sales and use
tax on the purchase price of an item that is exempt from tax under this
subdivision as if the provider is the user of the item. As a result, the provider
of continuing care is not required to pay sales or use tax if the purchase would
be exempt if purchased for use, not resale, by the provider. The terms
"provider," "continuing care," and "resident " have the same meanings as
defined in G.S. 58-64-1. G.S. 58-64A-5. The term "alcoholic beverage" has
the same meaning as defined in G.S. 18B-101."
SECTION 4. This act becomes effective December 1, 2025, and applies to (i)
offenses committed on or after that date and (ii) contracts issued, renewed, or amended on or
after that date.
In the General Assembly read three times and ratified this the 26th day of June, 2025.
s/ Rachel Hunt
President of the Senate
s/ Destin Hall
Speaker of the House of Representatives
s/ Josh Stein
Governor
Approved 9:21 a.m. this 3rd day of July, 2025