Continuing Care Retirement Communities Act.-AB

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 105

Short Title: Continuing Care Retirement Communities Act.-AB (Public)
Sponsors: Senator Johnson (Primary Sponsor).
Referred to: Rules and Operations of the Senate
February 18, 2025
*S105-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO ENACT THE CONTINUING CARE RETIREMENT COMMUNITIES ACT, AS 2
RECOMMENDED BY THE DEPARTMENT OF INSURANCE. 3
The General Assembly of North Carolina enacts: 4
SECTION 1. Article 64 of Chapter 58 of the General Statutes is repealed. 5
SECTION 2. Chapter 58 of the General Statutes is amended by adding a new Article 6
to read: 7
"Article 64A. 8
"Continuing Care Retirement Communities. 9
"Part 1. General Provisions. 10
"§ 58-64A-1. Title. 11
This Article shall be known and may be cited as the "Continuing Care Retirement 12
Communities Act." 13
"§ 58-64A-2. Legislative intent. 14
The General Assembly recognizes that continuing care retirement community residents often 15
expend a significant portion of their savings when contracting with a provider for continuing care 16
and devastating consequences can result if a provider becomes insolvent or unable to provide 17
continuing care. It is the intent of the General Assembly to promote the dignity and protect the 18
health, safety, and welfare of older citizens of North Carolina by (i) encouraging the development 19
of continuing care retirement communities and (ii) requiring providers offering or providing 20
continuing care in this State to obtain a license and to be monitored and regulated by the North 21
Carolina Department of Insurance under this Article. This Article applies to both for -profit and 22
nonprofit providers. 23
"§ 58-64A-5. Definitions. 24
The following definitions apply to this Article: 25
(1) Accepted actuarial standards of practice. – Standards of practice that conform 26
with Actuarial Standards of Practice No. 3 for Continuing Care Retirement 27
Communities, Revised Edition, effective June 1, 2022, including subsequent 28
amendments and editions. 29
(2) Actuarial opinion. – An opinion issued by an actuary in accordance with 30
accepted actuarial standards of practice. 31
(3) Actuarial study. – An analysis that includes an actuary 's opinion of whether 32
the provider or applicant is in satisfactory actuarial balance in accordance with 33
accepted actuarial standards of practice. 34
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Page 2 Senate Bill 105-First Edition
(4) Actuary. – An individual qualified to sign an actuarial opinion in accordance 1
with the American Academy of Actuaries' qualification standards and who is 2
a member in good standing with the American Academy of Actuaries. 3
(5) Advertisement. – Any written, visual, or electron ic information provided to 4
potential residents, or their representatives, to induce those persons to 5
subscribe to or enter into a nonbinding reservation agreement, binding 6
reservation agreement, continuing care contract, or continuing care at home 7
contract. 8
(6) Affiliate. – A person that, directly or indirectly, through one or more other 9
persons, controls, is controlled by, or is under common control with a provider 10
or applicant. 11
(7) Annual debt service. – The current year's capitalized interest cost plus interest 12
expense and scheduled principal payments, excluding any balloon principal 13
payment amounts and any portion of the annual debt service that has been or 14
will be funded by debt for the payment of debt service. 15
(8) Applicant. – Any person with a pendin g application or other request for 16
approval under this Article. 17
(9) Audited financial statements. – Financial statements that have been prepared 18
in accordance with Generally Accepted Accounting Principles and examined 19
by an independent certified public accountant. 20
(10) Binding reservation agreement. – A binding contractual agreement between a 21
provider and a depositor that requires the payment of a deposit to reserve the 22
right to purchase continuing care, including the right to live in an independent 23
living unit at a continuing care retirement community. A purchase and sale 24
agreement for an independent living unit shall not be considered a binding 25
reservation agreement for the purposes of this Article. 26
(11) Cancel. – To terminate the force and effect of an agreement or contract. 27
(12) Continuing care. – The rendering to an individual other than an individual 28
related by blood, marriage, or adoption to the person rendering the care, of 29
housing in an independent living unit, together with related services, including 30
access, when needed, to progressive levels of health care, including either 31
assisted living care, as defined in G.S. 131D-2.1, or nursing care, as defined 32
in G.S. 131E-176, or both, regardless of whether the health care is provided at 33
the continuing care retirement community where the individual resides or 34
another location, or through a contractual relationship with a third party, 35
pursuant to a contract effective for the life of the individual or for a period 36
longer than one year. 37
(13) Continuing care at home. – A program offered by a provider holding a 38
permanent license under this Article that provides continuing care to an 39
individual who is not yet receiving housing, which may include programs that 40
offer an individual an opportunity to move to an ind ependent living unit at a 41
future date, if desired, according to the provider 's established priority and 42
admissions policies at the continuing care retirement community sponsoring 43
the continuing care at home program. 44
(14) Continuing care retirement community. – A retirement community consisting 45
of one or more structures where a provider renders continuing care to 46
residents. A distinct phase of development approved by the Commissioner 47
may be considered to be the continuing care retirement community when a 48
project is being developed in successive distinct phases over a period of time. 49
(15) Control. – The direct or indirect ability to direct or cause the direction of the 50
management and policies of a person, including the right to designate or elect 51
General Assembly Of North Carolina Session 2025
Senate Bill 105-First Edition Page 3
not less than a majority of the members of its board of directors or other 1
governing board or body. 2
(16) Controlling person. – The person that controls an applicant or provider. 3
(17) Debt service coverage ratio. – A capital structure ratio that measures a 4
provider's ab ility to pay annual debt service with cash flow from net cash 5
revenues and net entrance fee receipts. The quotient shall be calculated by 6
dividing the sum of total excess of revenues over or under expenses plus 7
interest expense, depreciation expense, amort ization expense, other noncash 8
operating losses or expenses, and net cash proceeds from entrance fees, minus 9
entrance fee amortization, entrance fee refunds contractually past due, and 10
other noncash operating gains or revenues divided by annual debt servic e. 11
Entrance fees received from the initial residents of independent living units at 12
a continuing care retirement community that have been financed in whole or 13
in part with the proceeds of indebtedness shall be excluded from the net 14
proceeds from entrance f ees up to an amount equal to the aggregate of the 15
principal amount of the indebtedness. 16
(18) Deposit. – Any transfer of consideration made by a depositor to a provider to 17
reserve an independent living unit at a continuing care retirement community. 18
(19) Entrance fee. – The sum of any initial, amortized, or deferred transfer of 19
consideration made or to be made by, or on behalf of, an individual entering 20
into a continuing care or continuing care at home contract. 21
(20) Escrow agent. – Any person approved by the Commissioner to hold entrance 22
fees and deposits required to be placed in escrow under this Article. 23
(21) Escrow agreement. – An agreement between a provider and an escrow agent 24
by which entrance fees and deposits required to be held in escrow in 25
accordance with this Article are held by the escrow agent until release is 26
permitted in accordance with this Article. 27
(22) Hazardous condition. – A present, or reasonably anticipated future condition, 28
whereby (i) a provider is unlikely to be able to meet its con tinuing care 29
obligations or to pay other obligations in the normal course of business or (ii) 30
the continued operation of a provider or continuing care retirement 31
community in its current condition is potentially harmful to depositors, 32
residents, creditors, or the general public. 33
(23) Housing. – A living unit set forth in a continuing care contract. 34
(24) Independent certified public accountant. – A certified public accountant or 35
accounting firm in good standing with the American Institute of Certified 36
Public Accountants and in all states in which he or she is licensed to practice 37
who is not employed by, or otherwise affiliated with, an applicant or provider. 38
(25) Independent living unit. – A living unit in a continuing care retirement 39
community for residents who are routinely able to carry out activities of daily 40
living, as defined in G.S. 160D-915, with minimal or no assistance. The 41
accommodations may be in the form of apartments, flats, houses, cottages, 42
condominium units, or rooms. Receiving home care or si milar services, 43
regardless of whether the services are provided by the provider or another 44
person, does not preclude a living unit from being considered an independent 45
living unit. 46
(26) Insolvent. – A condition whereby the provider is unable to pay its obligations 47
as they come due in the normal course of business. 48
(27) Living unit. – An independent living unit, adult care home bed, nursing bed, 49
or other area within a continuing care retirement community set aside for the 50
exclusive use or control of one or more identified residents. 51
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(28) Long-term care facility. – As defined in G.S. 131E-231. 1
(29) Manager. – A person who administers the day -to-day business operations of 2
a continuing care retirement community for a provider, subject to the policies, 3
directives, and oversight of the provider. 4
(30) Net cash proceeds from entrance fees. – Total entrance fees received less 5
entrance fees refunded, and less initial entrance fees received for new 6
independent living units. 7
(31) Nonbinding reservation agreement. – An agreement between a provider and a 8
depositor, which may be canceled by either party upon written notice at any 9
time, confirming a person 's desire to reserve an independent living unit at a 10
continuing care retirement community on a nonbinding basis. 11
(32) Obligated group. – One or more persons that agree to be jointly and severally 12
bound by a financing structure containing security provisions and covenants 13
applicable to the group. 14
(33) Occupancy rate. – A ratio used to show the actual occupancy or utilization of 15
living units, calculated by living unit type, at a continuing care retirement 16
community for a given time period expressed as a percent. The occupancy rate 17
shall be a rolling average that is equal to 100 times the quotient obtained by 18
dividing occupied living unit days by living unit days available. For purposes 19
of this definition, "living unit days available " is the maximum number of 20
living unit days that would have been provided if all available living units 21
were filled during the given time period. The total shall equal the sum of all 22
living units, minus any living units that are unavailable for occupancy, on each 23
day for the given time period. For purposes of this definition, "occupied living 24
unit days" is the sum of each daily living unit census at the continuing care 25
retirement community for a given time period, excluding any second person 26
occupants. The total shall equal the sum of each daily census for the given 27
time period. 28
(34) Periodic fee. – The fee charged to a resident on a monthly or other periodic 29
basis for housing, services, or both. 30
(35) Person. – An individual, partnership, firm, association, corporation, 31
joint-stock company, trust, any similar entity, or any combination of the 32
foregoing acting in concert. 33
(36) Presale. – Entering into an agreement or contract with a depositor for an 34
independent living unit that is not yet constructed or available for occupancy. 35
(37) Primary market area. – The area from which a continuing care retire ment 36
community will likely draw the majority of its residents. 37
(38) Prospective financial statements. – Financial forecasts or financial 38
projections, including the summaries of significant assumptions and 39
accounting policies prepared by an independent certified public accountant. 40
(39) Provider. – A person that offers or undertakes to provide continuing care under 41
a continuing care or continuing care at home contract, or that represents 42
himself, herself, or itself as providing continuing care. For the purposes of this 43
Article, the term provider sha ll also include a person who has been issued a 44
permit to accept deposits, a start-up certificate, or a preliminary certificate. 45
(40) Related party. – A person or persons that have common interests with a 46
provider as a result of ownership, control, or by contract, including affiliates, 47
principal owners, management, or their affiliates and their management and 48
members of the immediate family of the principal owners, management, or 49
their affiliates and their management. 50
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Senate Bill 105-First Edition Page 5
(41) Resident. – An individual who enters into a continuing care or continuing care 1
at home contract with a provider, or who is designated to be the individual to 2
receive care under the contract. 3
(42) Satisfactory actuarial balance. – Meeting all of the required conditions, as of 4
a specified valuation date, as set forth in accordance with accepted actuarial 5
standard of practice. 6
"§ 58-64A-10. Rulemaking authority. 7
The Commissioner may adopt rules to implement the provisions of this Article. 8
"§ 58-64A-15. Dividends and distributions. 9
No dividend or other distribution of equity or net assets shall be paid by any provider after 10
the Commissioner has determined that the provider is in a hazardous condition or has been 11
determined to not be in satisfactory actuarial balance in an actuarial s tudy filed with the 12
Commissioner pursuant to G.S. 58-64A-210, or when the payment would have the effect of 13
creating a hazardous condition in the provider or cause the provider to not be in satisfactory 14
actuarial balance. 15
"§ 58-64A-20. Commissioner approval required to offer or provide continuing care. 16
No person shall engage in the business of offering or providing continuing care in this State 17
without a certification, license, permit, or other approval from the Commissioner as provided in 18
this Article. Eng aging in the business of offering or providing continuing care in this State 19
includes all of the following: 20
(1) Accepting any deposit or any other payment that is related to continuing care. 21
(2) Entering into any nonbinding reservation agreement, binding r eservation 22
agreement, continuing care contract, or continuing care at home contract. 23
(3) Commencing construction of a prospective continuing care retirement 24
community. 25
(4) Converting an existing building or buildings to a continuing care retirement 26
community. 27
(5) Executing new nonbinding reservation agreements, binding reservation 28
agreements, continuing care contracts, or continuing care at home contracts 29
after a permit, certificate, or license issued pursuant to this Article has been 30
inactivated, surrendered, or forfeited. 31
(6) Assuming responsibility for continuing care and continuing care at home 32
contracts. 33
(7) Advertising or marketing to the general public any product similar to 34
continuing care through the use of such terms as "life care ," "life plan ," 35
"continuing care," or "guaranteed care for life ," or similar terms, words, or 36
phrases. 37
"§ 58-64A-25. Leasing real property for a continuing care retirement community. 38
(a) An applicant or provider who intends to collect or does collect entrance fees shall not 39
lease any land or other real property from another person if the land or other real property is to 40
be used as a material part of a continuing care retirement community operated by the applicant 41
or provider without first obtaining approval from the Commissioner. 42
(b) When considering whether to allow an applicant or provider to lease any of the real 43
property of a continuing care retirement community under this section, the Commissioner shall 44
consider all relevant factors, including all of the following: 45
(1) The terms of the proposed lease, including the proposed length of the lease 46
and any proposed purchase options. 47
(2) The owner of the real property and the owner's relationship to the applicant or 48
provider. 49
(3) The distance from any existing real property owned by the applicant or 50
provider. 51
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"§ 58-64A-30. Required electronic filings and submissions. 1
Except when required by the Commissioner to submit a hard copy, all applicants and 2
providers shall submit all filings required by this Article electronically, in a form and manner 3
acceptable to the Commissioner and in compliance with the Uniform Electronic Transactions 4
Act. 5
"§ 58-64A-35. Waiver or modification. 6
The Commissioner may waive or modify any provision of this Article if the Commissioner 7
determines a waiver or modification is justified based on any of the following: 8
(1) A state of emergency or disaster being proclaimed in this State or for an area 9
within this State under G.S. 166A-19.20 or G.S. 166A-19.21 or whenever the 10
President of the United States has issued a major disaster declaration for the 11
State or for an area within the State under the Stafford Act, 42 U.S.C. § 5121, 12
et seq. 13
(2) An incident beyond a provider's reasonable control, including an act of God, 14
insurrection, strike, fire, pandemic, epidemic, power outage, or systemic 15
technological failure that substantially affects the daily business operations of 16
a provider or a continuing care retirement community. 17
"§ 58-64A-40. Confidential treatment. 18
(a) All of the following shall be confidential and privileged, shall not be considered a 19
public record under either G.S. 58-2-100 or Chapter 132 of the General Statutes, shall not be 20
subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private 21
civil action: 22
(1) Any third -party management contract or proposed management contract 23
provided to the Commissioner pursuant to G.S. 58-64A-55(a)(3) or 24
G.S. 58-64A-240(a). 25
(2) Any lease agreement or proposed lease agreement provided t o the 26
Commissioner pursuant to G.S. 58-64A-25 or G.S. 58-64A-55(a)(4). 27
(3) Any request for approval provided to the Commissioner pursuant to 28
G.S. 58-64A-230(d) or G.S. 58-64A-235(a). 29
(4) The actuarial study, other than the statement of actuarial opinion, provided to 30
the Commissioner pursuant to G.S. 58-64A-60(a)(3), 58 -64A-90(b)(3), 31
58-64A-185(a)(4), or 58-64A-210. 32
(5) Any market study provided to the Commissioner pursuant to 33
G.S. 58-64A-55(a)(9) or G.S. 58-64A-185(a)(5). 34
(6) Any feasibility study provided to the Commissioner pursuant to 35
G.S. 58-64A-60(a)(2) or G.S. 58-64A-90(b)(2). 36
(7) Documents, materials, or other information in the possession or control of the 37
Commissioner that are obtained by or disclosed to the Commissioner or any 38
other person in the course of an investigation or examination made pursuant 39
to G.S. 58-64A-295 or G.S. 58-64A-380. 40
(8) All working papers, information, documents, and copies of those materials 41
produced by, obtained by, or disclosed to the Commissioner in connection 42
with the financial analysis of a provider by the Commissioner. 43
(b) Notwithstanding subsection (a) of this section, the Commissioner is authorized to use 44
these documents, materials, or other information in the furtherance of any regulatory or legal 45
action brought as a part of the Commissioner 's official duties. The Commissioner shall not 46
otherwise make these documents, materials, or other information public without the prior written 47
consent of the provider to which it pertains unless the Commissioner, after giving the provider 48
and its related parties who would be affected thereby notice and opportun ity to be heard, 49
determines that the interest of residents or the public will be served by their publication, in which 50
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event the Commissioner may publish all or any part of the information in a manner deemed 1
appropriate by the Commissioner. 2
(c) Neither the Commissioner nor any person who received any documents, materials, or 3
other information while acting under the authority of the Commissioner pursuant to this Article 4
or with whom any documents, materials, or other information are shared pursuant to this Article 5
shall be permitted or required to testify in any private civil action concerning any confidential 6
documents, materials, or information subject to subsection (a) of this section. 7
(d) Any document, material, or other information that is shared with th e Commissioner 8
that is not covered under subsection (a) of this section that an applicant, provider, or other person 9
believes is confidential or a trade secret should be marked as confidential or as a trade secret 10
before submitting to the Commissioner. Any document, material, or other information that is not 11
marked as confidential is not eligible for confidential treatment pursuant to G.S. 132-1.2. 12
(e) To assist in the performance of the duties imposed by this Article, the Commissioner 13
may do both of the following: 14
(1) Share documents, materials, or other information, including the confidential 15
and privileged documents, materials, or information subject to subsection (a) 16
or (d) of this section, with other state, federal, and international regulatory 17
agencies, and with state, federal, and international law enforcement 18
authorities, provided that the recipient agrees in writing to maintain the 19
confidentiality and privileged status of the document, material, or other 20
information and has verified in writing the le gal authority to maintain 21
confidentiality. 22
(2) Receive documents, materials, or information, including otherwise 23
confidential and privileged documents, materials, or information from 24
regulatory and law enforcement officials of other foreign or domestic 25
jurisdictions, and shall maintain as confidential or privileged any document, 26
material, or information received with notice or the understanding that it is 27
confidential or privileged under the laws of the jurisdiction that is the source 28
of the document, material, or information. 29
(f) The sharing of information by the Commissioner pursuant to this section shall not 30
constitute a delegation of regulatory authority or rulemaking, and the Commissioner is solely 31
responsible for the administration, execution, and enforcement of the provisions of this Article. 32
(g) No waiver of any applicable privilege or claim of confidentiality in the documents, 33
materials, or information shall occur as a result of disclosure to the Commissioner under this 34
section or as a result of sharing as authorized in subsection (e) of this section. 35
"§ 58-64A-45. Advertisement in conflict with disclosures and contracts. 36
A provider may not engage in any type of advertisement for a continuing care retirement 37
community if the advertisement contains a statement or representation which materially conflicts 38
with the disclosures required under this Article or materially conflicts with any continuing care 39
or continuing care at home contract offered by the provider. 40
"Part 2. Approval, Certification, Licensure, and Permitting Process. 41
"§ 58-64A-50. Permit to accept deposits. 42
(a) No person shall market a proposed continuing care retirement community without a 43
permit from the Commissioner. A person may apply for a permit by paying an application fee of 44
two hundred dollars ($200 .00) and filing an application on a form prescribed by the 45
Commissioner. The application form shall include all of the following: 46
(1) The name, business address, and telephone number of the applicant. 47
(2) The name and business address of the applicant's controlling person, if control 48
of the applicant does not reside with the applicant. 49
(3) A proposed nonbinding reservation agreement. 50
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(4) A proposed escrow agreement that meets the requirements of 1
G.S. 58-64A-105. 2
(5) A description of the proposed continuing care retirement community which 3
shall include all of the following: 4
a. The location of the proposed continuing care retirement community. 5
b. The types of living units to be offered. 6
c. The types of continuing care contracts to be offered. 7
d. A description of the services that will be provided to residents, 8
including an indication if any services will be provided by any related 9
parties or third parties. 10
e. A description of the applicant 's corporate structure and experience in 11
developing or operating continuing care retirement communities, 12
including the experience of any related party of the applicant. 13
(b) The Commissioner shall comply with the review schedule in G.S. 58-64A-70 in 14
response to an application for a permit to accept deposits. 15
(c) The Commissioner shall approve an application for a permit to accept deposits if all 16
of the following requirements are met: 17
(1) The application complies with this section. 18
(2) None of the grounds for denial listed in G.S. 58-64A-280 apply to the 19
applicant. 20
(3) The proposed escrow agreement meets the requirements of G.S. 58-64A-105. 21
(4) The proposed escrow agent and depository are acceptable in accordance with 22
G.S. 58-64A-100. 23
(d) After the issuance of a permit to accept deposits, the applicant may do a ll of the 24
following: 25
(1) Disseminate materials describing the intent to develop a continuing care 26
retirement community. 27
(2) Enter into nonbinding reservation agreements. 28
(3) Collect deposits in an amount not to exceed five thousand dollars ($5,000). 29
All deposits collected shall be placed in escrow and shall only be released in 30
accordance with Part 4 of this Article. 31
(e) After the issuance of a permit to accept deposits, the Commissioner shall require the 32
provider to file periodic status reports in a form prescribed by the Commissioner. 33
"§ 58-64A-55. Start-up certificate. 34
(a) A person may apply for a start -up certificate by paying an application fee of two 35
thousand dollars ($2,000) and submitting all of the following to the Commissioner for review: 36
(1) A statement signed by the applicant, under penalty of perjury, certifying that 37
to the best of the applicant's knowledge and belief, the items submitted in the 38
application are correct. If the applicant is a corporation, the chief executive 39
officer or other aut horized individual shall sign the statement. If there are 40
multiple applicants, these requirements shall apply to each applicant. 41
(2) A statement disclosing any revocation or other disciplinary action taken, or in 42
the process of being taken, against a licen se, permit, or certificate held or 43
previously held by the applicant, any current or former related party, or any 44
person included or to be included in a current or proposed obligated group. 45
(3) If the applicant intends to employ a third -party management com pany to 46
manage the continuing care retirement community, a copy of the management 47
contract or proposed management contract, if available, along with a narrative 48
describing the proposed third -party management company 's experience 49
managing continuing care retirement communities. 50
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(4) If the applicant intends to lease any land or other real property to be used as 1
part or all of the proposed continuing care retirement community, the name of 2
the person from whom the land or other real property will be leased along with 3
a copy of the lease agreement, or proposed lease agreement, if available, or a 4
statement describing the applicant 's intentions, including the intended length 5
of the lease, if a lease agreement or proposed lease agreement is not available. 6
If the applicant intends to lease any of the real property of the continuing care 7
retirement community and to collect entrance fees, Commissioner approval 8
must be received pursuant to G.S. 58-64A-25. 9
(5) If the applicant is not the owner of the proposed site, a statement identifying 10
the current owner and any plans the applicant has for acquiring the proposed 11
site, including details of any purchase option and requirements for a purchase 12
option deposit. If a purchase option requires a purchase option deposit, the 13
purchase option deposit shall be placed in escrow or secured in a manner 14
acceptable to the Commissioner. 15
(6) A list of all continuing care retirement communities currently or previously 16
owned, operated, managed, or developed by the applicant or any related party 17
of the applicant. The list shall do all of the following: 18
a. Furnish the name, address, city, and state of each continuing care 19
retirement community listed, and explain the existing or past 20
relationship to the applicant. 21
b. Specify the current status of each continuing care retirement 22
community listed and include any administrative actions or financial 23
problems that currently exist, or have existed, within three years after 24
any relationship was terminated. 25
(7) A disclosure statement that meets the requirements of G.S. 58-64A-150. 26
(8) If the applicant intends to enter into binding reservation agreements, a copy 27
of the binding reservation agreement that the applicant intends to use. 28
(9) A market study prepared by a person experienced in the preparation o f 29
continuing care retirement community market studies. 30
(10) Any other data, financial statements, and pertinent information as the 31
Commissioner may reasonably require with respect to the applicant, the 32
applicant's controlling person, or the proposed contin uing care retirement 33
community to assist in determining the market and financial viability of the 34
proposed continuing care retirement community and the competency, 35
experience, and integrity of the applicant 's and, if applicable, the applicant 's 36
controlling person's, governing body, officers, and management. 37
(b) The Commissioner shall comply with the review schedule in G.S. 58-64A-70 in 38
response to an application for a start-up certificate. 39
(c) The Commissioner shall approve an application for a start -up certificate if all of the 40
following requirements are met: 41
(1) The application complies with this section. 42
(2) None of the grounds for denial listed in G.S. 58-64A-280 apply to the 43
applicant. 44
(3) The disclosure statement meets the requirements of G.S. 58-64A-150. 45
(4) A market for the proposed continuing care retirement community appears to 46
exist and the continuing care retirement community appears to be financially 47
viable, as evidenced by the market study and the five -year prospective 48
financial statements included in the applicant's disclosure statement. 49
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(5) The applicant 's and, if applicable, the applicant 's controlling person 's, 1
governing body, officers , and management are, in the Commissioner 's 2
opinion, competent, experienced, and of good integrity. 3
(d) After issuing a start-up certificate, the Commissioner shall do all of the following: 4
(1) Require the provider to submit periodic sales, development, and unaudited 5
financial statements in a form prescribed by the Commissioner. 6
(2) Post the disclosure statement of the continuing care retirement community on 7
the Department's website. 8
(e) After receiving a start-up certificate from the Commissioner, the provider may do all 9
of the following: 10
(1) Enter into binding reservation agreements and continuing care contracts. 11
(2) Accept entrance fees and deposits greater than five thousand dollars ($5,000). 12
All or any part of an entrance fee or deposit collected shall be placed in escrow 13
and shall only be released in accordance with Part 4 of this Article. 14
(3) Begin site preparation work. 15
(4) Construct model independent living units for marketing. 16
"§ 58-64A-60. Preliminary certificate. 17
(a) A person may apply for a preliminary certificate by submitting all of the following to 18
the Commissioner for review: 19
(1) A statement signed by the applicant, under penalty of perjury, certifying that 20
to the best of the applicant's knowledge and belief, the items submitted in the 21
application are correct. If the applicant is a corporation, the chief executive 22
officer or other authorized in dividual shall sign the statement. If there are 23
multiple applicants, these requirements shall apply to each applicant. 24
(2) A feasibility study, prepared by an independent person experienced in 25
preparing feasibility studies for continuing care retirement communities, with 26
financial, marketing, and actuarial assumptions that projects the market and 27
financial viability of the proposed continuing care retirement community. The 28
study shall include all of the following: 29
a. A description of the proposed continuing care retirement community, 30
its service package, the number and type of living units, fee structure, 31
and anticipated opening date, including a detailed schedule of 32
projected periodic fees and a description of how the projected periodic 33
fees were computed. 34
b. A description of any proposed construction plans, construction 35
financing, and permanent financing for the proposed continuing care 36
retirement community. 37
c. A description of the anticipated source, cost, terms, and uses of all 38
funds to be used in the rea l property acquisition, construction, 39
marketing, and operation for the proposed continuing care retirement 40
community, including all of the following: 41
1. A description of all debt to be incurred by the applicant, 42
including the source, anticipated terms, and costs of financing. 43
2. A description of the source and amount of equity to be 44
contributed by the applicant or any other person. 45
3. A description of the source and amount of all other funds, 46
including entrance fees, that will be necessary to complete and 47
operate the proposed continuing care retirement community. 48
4. A statement itemizing all estimated project costs, including the 49
real property costs, the cost of acquiring or designing and 50
constructing the proposed continuing care retirement 51
General Assembly Of North Carolina Session 2025
Senate Bill 105-First Edition Page 11
community, and all similar costs that the applicant expects to 1
incur prior to the commencement of operation. This 2
itemization shall identify all costs related to the proposed 3
continuing care retirement community, including financing 4
expenses, resident acquisition costs, m arketing costs, and 5
furniture and equipment. 6
5. An estimate of any reserves required by financing and the 7
operating reserve required pursuant to Part 11 of this Article. 8
6. An estimate of the amount of funds, if any, that will be 9
necessary to fund start -up losses and to otherwise provide 10
additional financial resources in an amount sufficient to ensure 11
full performance by the applicant of its continuing care 12
contract obligations. 13
d. An analysis of the potential market for the applicant 's proposed 14
continuing care retirement community, addressing all of the following: 15
1. The population, household growth, age distribution, household 16
income, household tenure, and resale housing values within the 17
primary market area. 18
2. A demand analysis of the range of likely tar get consumers 19
within the primary market area as well as estimated penetration 20
rates. 21
3. An economic analysis of current market conditions and trends 22
that can impact the feasibility of the proposed continuing care 23
retirement community, positively or negatively, including real 24
estate, income, employment, and the general economic outlook 25
for the primary market area and surrounding areas. 26
4. An analysis of the project location and immediate area in 27
relationship to key variables, including accessibility, 28
employment, and proximity to health care, retail, and other 29
services. 30
5. The types of services and amenities desired and the forms of 31
ownership or interest in real property preferred. 32
6. Existing and planned competition in the primary market area. 33
e. A description of the sales and marketing plan, including all of the 34
following: 35
1. Marketing projections, anticipated sales, and cancellation 36
rates. 37
2. Month-by-month projections of independent living unit sales 38
through stabilized occupancy. 39
3. A description of the marketing methods, staffing, and 40
advertising media to be used by the applicant. 41
4. An estimate of the total entrance fees to be received prior to 42
opening the proposed continuing care retirement community. 43
f. Projected move-in rates and resident profiles, including couple mix by 44
living unit type, age distribution, adult care home bed and nursing bed 45
utilization, and living unit turnover or resale rates. 46
g. A description or analysis of costs and revenues throughout the 47
development and resident fill -up period of the proposed continuing 48
care retirement community. 49
h. Prospective financial statements for the period commencing on the 50
first day of the applicant's current fiscal year through at least the fifth 51
General Assembly Of North Carolina Session 2025
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year of operation which shall be prepared in accordance with standards 1
adopted by the American Institute of Certified Public Accountants. 2
i. Any other factors that, in the opinion of the preparer, will affect the 3
feasibility of the proposed continuing care retirement community. 4
j. The name of the person w ho prepared the feasibility study and the 5
experience of the person in preparing similar studies or otherwise 6
consulting in the field of continuing care. 7
k. An evaluation and opinion by the person who prepared the feasibility 8
study of the underlying assumpt ions used as a basis for the study, 9
including a statement on whether the assumptions are reasonable and 10
proper. 11
(3) An actuarial study prepared in accordance with accepted actuarial standards 12
of practice which estimates the earliest year that the proposed continuing care 13
retirement community is projected to be in satisfactory actuarial balance. 14
Applicants who do not or will not collect entrance fees or some other 15
prepayment of costs are exempt from this requirement and shall only be 16
required to submit an actuarial projection of future population flows and adult 17
care home bed and nursing bed needs. An actuarial projection of future 18
population flows and adult care home bed and nursing bed needs shall use (i) 19
appropriate mortality, morbidity, withdrawal, occupa ncy, and other 20
demographic assumptions and (ii) a projection period that extends to a point 21
at which, in the actuary 's professional judgment, the use of a longer period 22
would not materially affect the results and conclusions. 23
(4) An updated disclosure stat ement that meets the requirements of 24
G.S. 58-64A-150. 25
(5) At least one of the following: 26
a. Confirmation of signed binding reservation agreements or continuing 27
care contracts for at least fifty percent (50%) of the new independent 28
living units, reserved by a deposit equal to at least ten percent (10%) 29
of the entrance fee. 30
b. Confirmation of signed binding reservation agreements or continuing 31
care contracts for at least fifty percent (50%) of the new independent 32
living units, reserved by a nonrefundable deposit equal to the periodic 33
fee for at least two months for proposed continuing care retirement 34
communities that have no entrance fee. 35
c. Confirmation of one hundred thousand dollars ($100,000) placed on 36
deposit with the Commissioner, if the applicant (i ) does not collect 37
presale entrance fees or deposits in an amount equal to at least ten 38
percent (10%) of the entrance fee or (ii) does not collect presale 39
entrance fees or deposits and does not collect nonrefundable deposits 40
equal to the periodic fee of at least two months. This deposit is subject 41
to the following requirements: 42
1. The deposit shall only be returned to the applicant upon 43
issuance of a permanent license. 44
2. The deposit shall be made in accordance with G.S. 58-5-20. 45
3. The deposit shall automa tically be forfeited if the applicant 46
does not obtain a permanent license within five years after the 47
issuance of a preliminary certificate. Forfeited deposits shall 48
be remitted to the Civil Penalty and Forfeiture Fund in 49
accordance with G.S. 115C-457.2. 50
General Assembly Of North Carolina Session 2025
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(6) If applicable, confirmation that commitments have been secured for 1
construction financing and long -term financing or that a documented plan 2
acceptable to the Commissioner has been adopted by the applicant for 3
long-term financing. 4
(b) The Commissioner shall comply with the review schedule in G.S. 58-64A-70 in 5
response to an application for a preliminary certificate. 6
(c) The Commissioner shall approve an application for a preliminary certificate if all of 7
the following requirements are met: 8
(1) The application complies with this section. 9
(2) None of the grounds for denial listed in G.S. 58-64A-280 apply to the 10
applicant. 11
(3) The feasibility study meets all of the following requirements: 12
a. Includes in the prospective financial statements all obligations and 13
liabilities to be undertaken by the applicant pursuant to the terms of 14
the proposed continuing care contracts. 15
b. Demonstrates that the anticipated sources of funds to finance and 16
operate the proposed continuing care retirement community are equal 17
to or greater than the anticipated uses of funds to (i) construct or 18
acquire the proposed continuing care retirement community and (ii) 19
fund start -up losses and provide sufficient resources to ensure full 20
performance of the applicant's continuing care contract obligations. 21
c. Demonstrates that the continuing care retirement community is 22
financially feasible. 23
(4) A market for the continuing care retirement community appears to exist, based 24
on data that meets all of the following requirements: 25
a. Is specific to the proposed continuing care retirement community. 26
b. Considers existing and proposed competition in the primary market 27
area. 28
c. Demonstrates the existence of a market for the age, marital status, 29
number, population trends, net worth, home values, and income of the 30
potential residents. 31
d. Demonstrates that the rate of penetration in the proposed market area 32
is within acceptable industry ranges. 33
(5) The actuarial study, if applicable, projects that the proposed continuing care 34
retirement commu nity will be in satisfactory actuarial balance within a 35
reasonable period of time after achieving stabilized occupancy, as determined 36
by the Commissioner, or if no actuarial study is required, the actuarial 37
projection of future population flows demonstrate s a sufficient number of 38
adult care home beds and nursing beds to meet the future needs of residents 39
and the future contractual obligations of the applicant, as determined by the 40
Commissioner. 41
(6) The applicant has met one of the requirements in subdivision (5) of subsection 42
(a) of this section. 43
(7) If applicable, the applicant has secured commitments for construction 44
financing and long-term financing or that a documented plan acceptable to the 45
Commissioner has been adopted by the applicant for long-term financing. 46
(8) The applicant demonstrates an ability to comply with this Article and to 47
provide continuing care as proposed and meet all financial obligations related 48
to its operations. 49
(d) After issuing a preliminary certificate, the Commissioner shall do b oth of the 50
following: 51
General Assembly Of North Carolina Session 2025
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(1) Require the provider to submit periodic sales, development, and unaudited 1
financial statements in a form prescribed by the Commissioner. 2
(2) Post the disclosure statement of the continuing care retirement community on 3
the Department's website. 4
(e) After receiving a preliminary certificate from the Commissioner, the provider may do 5
both of the following: 6
(1) Construct a continuing care retirement community. 7
(2) Convert an existing structure or structures into a continuing care retirement 8
community. 9
"§ 58-64A-65. Permanent license. 10
(a) A person may apply for a permanent license by submitting all of the following to the 11
Commissioner for review: 12
(1) A statement signed by the applicant, under penalty of perjury, certifying that 13
to the best of the applicant's knowledge and belief, the items submitted in the 14
application are correct. If the applicant is a corporation, the chief executive 15
officer or other authorized individual shall sign the statement. If there are 16
multiple applicants, these requirements shall apply to each applicant. 17
(2) An updated disclosure statement that meets the requirements of 18
G.S. 58-64A-150. 19
(3) Confirmation that the applicant has established a plan to have health care 20
available to residents promised in continuing care contracts upon opening, 21
either by the applicant directly, or through contractual agreements. 22
(4) At least one of the following: 23
a. Confirmation of signed binding reservation agreements or continuing 24
care contracts for at least seventy perce nt (70%) of the new 25
independent living units, reserved by a deposit equal to at least ten 26
percent (10%) of the entrance fee. 27
b. Confirmation of signed binding reservation agreements or continuing 28
care contracts for at least seventy percent (70%) of the new 29
independent living units, reserved by a nonrefundable deposit equal to 30
the periodic fee for at least two months for proposed continuing care 31
retirement communities that have no entrance fee. 32
c. Confirmation of the one hundred thousand dollar ($100,000) de posit 33
required pursuant to G.S. 58-64A-60(a)(5)c. 34
(5) Confirmation that the applicant has long -term financing in place, and if the 35
applicant is leasing the land or other real property of the continuing care 36
retirement community, confirmation that the lease is in place and, if 37
applicable, that the lease has been approved by the Commissioner pursuant to 38
G.S. 58-64A-25. 39
(6) Confirmation that the applicant is in compliance with all other state, federal, 40
municipal, and county laws and regulations. If the applicant is not in 41
compliance, the applicant shall include a statement that describes the nature 42
of the deficiency. 43
(7) A statement concerning any litigation, orders, judgments, or decrees which 44
may involve or impact the applicant or proposed continuing c are retirement 45
community. 46
(8) Evidence that the applicant has in place the operating reserve required by Part 47
11 of this Article. 48
(b) The Commissioner shall comply with the review schedule in G.S. 58-64A-70 in 49
response to an application for a permanent license. 50
General Assembly Of North Carolina Session 2025
Senate Bill 105-First Edition Page 15
(c) The Commissioner shall approve an application for a permanent license if all of the 1
following requirements are met: 2
(1) The application complies with this section. 3
(2) None of the grounds for denial listed in G.S. 58-64A-280 apply to the 4
applicant. 5
(d) After receiving a permanent license from the Commissioner, the provider may do 6
both of the following: 7
(1) Open the continuing care retirement community. 8
(2) Provide continuing care. 9
(e) If the Commissioner determines that the requirements of subsection (c) of this section 10
are not met, the Commissioner may do either of the following: 11
(1) Deny the application. 12
(2) Issue a restricted permanent license with an explanation of (i) the restrictions 13
established by the Commissioner under subsection (f) of this section and (ii) 14
the conditions the provider must satisfy to qualify for a permanent license. 15
(f) After receiving a restricted permanent license from the Commissioner, the provider 16
may operate a continuing care retirement community under restricti ons established by the 17
Commissioner until the Commissioner issues a permanent license. When the Commissioner 18
issues a restricted permanent license, the provider shall inform all depositors and residents within 19
10 business days of (i) all restrictions impos ed by the restricted permanent license and (ii) all 20
conditions that the provider must satisfy to qualify for a permanent license. 21
(g) After issuing a permanent license or restricted permanent license, the Commissioner 22
shall do both of the following: 23
(1) Require the provider to submit periodic occupancy reports and financial 24
statements in a form prescribed by the Commissioner. 25
(2) Post the disclosure statement of the continuing care retirement community on 26
the Department's website. 27
(h) A permanent license or restricted permanent license shall be valid for as long as the 28
Commissioner determines that the provider continues to meet the requirements of this Article. 29
"§ 58-64A-70. Review schedule. 30
The Commissioner shall comply with the following schedule in response to an application 31
for (i) a permit to accept deposits, (ii) a start -up certificate, (iii) a preliminary certificate, (iv) a 32
permanent license, (v) an expansion, (vi) a continuing care at home license, (vi i) an expansion 33
notification, and (viii) a request for approval pursuant to G.S. 58-64A-230, 58 -64A-235, and 34
58-64A-240: 35
(1) Within five business days after receipt of an application, a notification, a 36
request for approval, or of materials intended to supplement an incomplete 37
application, notificat ion, or request for approval, the Commissioner shall 38
acknowledge receipt in writing. 39
(2) Within 10 business days after receipt of an application for a permit to accept 40
deposits, permanent license, and an expansion notification, or of materials 41
intended to supplement an incomplete application or expansion notification, 42
and within 30 days after receipt of an application for a start -up certificate, a 43
preliminary certificate, a continuing care at home license, and an expansion, 44
or a request for approval, or of materials intended to supplement an incomplete 45
application or request for approval, the Commissioner shall determine if the 46
application, notification, or request for approval is complete and inform the 47
applicant in writing of the determination. If the Commissioner determines that 48
the application, notification, or request for approval is incomplete, the notice 49
to the applicant shall specifically set forth and request any additional 50
General Assembly Of North Carolina Session 2025
Page 16 Senate Bill 105-First Edition
information the Commissioner determines is necessary to complete the 1
application, notification, or request for approval. 2
(3) When the Commissioner determines an application, notification, or request 3
for approval is complete, the Commissioner shall approve or deny the 4
application, notification, or request for approval as follows: 5
a. Within five business days for a permit to accept deposits and an 6
expansion notification. 7
b. Within 30 days for a start-up certificate, permanent license, continuing 8
care at home license, expansion, and a request for approval. 9
c. Within 45 days for a preliminary certificate. 10
"§ 58-64A-75. Expiration of a permit to accept deposits and start-up certificate. 11
(a) A permit to accept deposits and a start -up certificate issued pursuant to this Article 12
expires 36 months after issuance. 13
(b) A provider issued a permit to accept deposits or a start-up certificate may request an 14
extension of the permit or certificate. The request for extension shall be made in writing and 15
include both of the following: 16
(1) The reasons why the provider has not applied for a start -up certificate or 17
preliminary certificate, as applicable. 18
(2) The estimated date the provider expects to file the start -up certificate 19
application or the preliminary certificate application, as applicable. 20
(c) In response to a request for an extension, the C ommissioner shall do one of the 21
following: 22
(1) If the Commissioner determines there is satisfactory cause for the delay, the 23
Commissioner shall extend the permit to accept deposits or a start-up 24
certificate for up to one year and may, in the Commissioner 's discretion, 25
require the provider to update information previously filed pursuant to 26
G.S. 58-64A-50 or G.S. 58-64A-55 before approving any extension. There is 27
no limit to the number of extensions that may be granted by the 28
Commissioner. 29
(2) If the Commiss ioner determines that there is no satisfactory cause for the 30
delay, the Commissioner shall instruct the escrow agent to refund to 31
depositors all deposits held in escrow, plus any interest that may be due under 32
the terms of any nonbinding reservation agreem ent, binding reservation 33
agreement, or continuing care contract. 34
(d) Within 10 business days of the Commissioner 's denial of an extension, the provider 35
shall notify each depositor of the Commissioner's denial of the extension, of the expiration of the 36
permit to accept deposits or a start-up certificate, and of any right to a refund of their deposits. 37
"§ 58-64A-80. Denial of an application, notification, or other request for approval. 38
(a) If the Commissioner denies an application, notification, or any other request for 39
approval pursuant to this Article, the Commissioner shall notify the applicant in writing of the 40
denial. The notification shall state the grounds for the denial. To obtain a review of the 41
Commissioner's denial, the applicant shall make written demand upon the Commissioner within 42
30 days after service upon the applicant of notification of the denial. The review shall be 43
completed without undue delay, and the applicant shall be notified promptly in writing as to the 44
outcome of the review. If the applicant disagrees with the outcome of the review and seeks a 45
hearing under Article 3A of Chapter 150B of the General Statutes, the applicant shall make a 46
written demand upon the Commissioner for the hearing within 30 days after service upon the 47
applicant of the notification of the outcome. 48
(b) If the Commissioner denies an application, notification, or other request for approval 49
pursuant to this Article, no portion of the fee associated with the application, notification, or 50
request for approval shall be refunded. 51
General Assembly Of North Carolina Session 2025
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"Part 3. Expansion. 1
"§ 58-64A-85. Expansion notification. 2
(a) Prior to marketing and collecting deposits for a proposed expansion of a continuing 3
care retirement community that is twenty percent (20%) or more of existing independent living 4
units, a provider shall do both of the following: 5
(1) Notify and obtain written approval from the Commissioner. 6
(2) Notify all residents in writing of the provider's intent to expand the number of 7
independent living units at the continuing care retirement community. This 8
notification shall include the description required by subdivision (b)(1) of this 9
section. 10
(b) The expansion notification to the Commissioner required by this section shall include 11
all of the following: 12
(1) A description of the proposed expansion project, including the number of 13
independent living units to be added. 14
(2) If the provider intends to enter into nonbinding reservation agreements, 15
binding reservation agreements, or both, a copy of the proposed agreements 16
that the provider intends to use. 17
(3) A proposed escrow agreement that meets the requirements of 18
G.S. 58-64A-105. 19
(4) An updated disclosure statement that meets the requirements of 20
G.S. 58-64A-150. 21
(c) The Commissioner shall comply with the review schedule in G.S. 58-64A-70 in 22
response to an expansion notification. 23
(d) The Commissioner shall approve the expansion notification if all of the following 24
requirements are met: 25
(1) The expansion notification complies with this section. 26
(2) None of the grounds for denial listed in G.S. 58-64A-280 apply to the 27
provider. 28
(3) The proposed escrow agreement meets the requirements of G.S. 58-64A-105. 29
(4) The proposed escrow agent and depository are acceptable in accordance with 30
G.S. 58-64A-100. 31
(e) After the Commissioner approves the expansion notification, the provider shall 32
submit periodic sales and development reports to the Commissioner in a form presc ribed by the 33
Commissioner. 34
(f) After the Commissioner approves the expansion notification, the provider may do all 35
of the following: 36
(1) Disseminate materials, including advertisements, describing the intent to 37
expand the number of independent living units at the continuing care 38
retirement community. 39
(2) Enter into nonbinding reservation agreements, binding reservation 40
agreements, and continuing care contracts for the proposed independent living 41
units. 42
(3) Collect entrance fees and deposits for the proposed independent living units. 43
All deposits collected shall be placed in escrow and shall only be released in 44
accordance with Part 4 of this Article, unless otherwise exempted by the 45
Commissioner. 46
"§ 58-64A-90. Expansion application. 47
(a) Prior to commencing c onstruction of an expansion of a continuing care retirement 48
community that is twenty percent (20%) or more of existing independent living units, a provider 49
shall do both of the following: 50
General Assembly Of North Carolina Session 2025
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(1) Receive Commissioner approval of an expansion notification pursu ant to 1
G.S. 58-64A-85. 2
(2) Apply to the Commissioner for approval to commence construction. 3
(b) The application required by this section shall include all of the following: 4
(1) An application fee of one thousand dollars ($1,000). 5
(2) A feasibility study, prepared by an independent person experienced in 6
preparing feasibility studies for continuing care retirement communities, with 7
financial, marketing, and actuarial assumptions that projects the market and 8
financial viability of the proposed expansion. The study shall include all of 9
the following items: 10
a. A description of the applicant's proposed expansion project, including 11
the number of independent living units being added, fee structure, a 12
description of how the projected fees were computed, and the 13
anticipated project time line. 14
b. A description of the construction plans, construction financing, and 15
permanent financing for the proposed expansion project, including all 16
of the following: 17
1. A description of all debt to be incurred by the applicant, 18
including the source, anticipated terms, and costs of financing. 19
2. A description of the source and amount of any equity to be 20
contributed by the applicant. 21
3. A description of the source and amount of all other funds, 22
including entrance fees, that will be necessary to complete and 23
operate the proposed expansion. 24
4. A statement itemizing all estimated project costs, including the 25
real property costs, the cost of designing and constructing the 26
proposed expansion, and all similar costs that the applicant 27
expects to incur prior to the opening of the expansion. This 28
itemization shall identify all costs related to the proposed 29
expansion, including financing expenses, resident acquisition 30
costs, marketing costs, and furniture, fixtures, and equipment. 31
5. An estima te of any reserves required by financing and the 32
operating reserve required pursuant to Part 11 of this Article. 33
c. An analysis of the potential market for the proposed expansion, 34
addressing all of the following: 35
1. The population, household growth, age distribution, household 36
income, household tenure, and resale housing values within the 37
primary market area. 38
2. A demand analysis of the range of likely target consumers 39
within the primary market area as well as estimated penetration 40
rates. 41
3. An economic analysis of current market conditions and trends 42
that can impact the feasibility of the proposed expansion, 43
positively or negatively, including real estate, income, 44
employment, and the general economic outlook for the primary 45
market area and surrounding areas. 46
4. Existing and planned competition in the primary market area. 47
d. A description of the sales and marketing plan, including all of the 48
following: 49
1. Marketing projections, anticipated sales, and cancellation 50
rates. 51
General Assembly Of North Carolina Session 2025
Senate Bill 105-First Edition Page 19
2. Month-by-month projections of inde pendent living unit sales 1
through stabilized occupancy. 2
3. A description of the marketing methods, staffing, and 3
advertising media to be used by the applicant. 4
4. An estimate of the total entrance fees to be received. 5
e. Projected move-in rates and resident profiles, adult care home bed and 6
nursing bed utilization, and living unit turnover or resale rates. 7
f. A description or analysis of costs and revenues throughout the 8
development and resident fill-up period of the proposed expansion. 9
g. Five-year prospective financial statements of the applicant which shall 10
be prepared in accordance with standards adopted by the American 11
Institute of Certified Public Accountants. 12
h. Any other factors that, in the opinion of the preparer, will affect the 13
feasibility of the expansion. 14
i. The name of the person who prepared the feasibility study and their 15
experience in preparing similar studies or otherwise consulting in the 16
field of continuing care. 17
j. An evaluation and opinion by the person who prepared the feasibility 18
study of the underlying assumptions used as a basis for the study, 19
including a statement whether the assumptions are reasonable and 20
proper. 21
(3) An actuarial study prepared in accordance with accepted actuarial standards 22
of practice which estimates when the continuing care retirement community 23
is projected to be in satisfactory actuarial balance once stabilized occupancy 24
of the expansion is achieved. Applicants who do not collect entrance fees or 25
some other type of up -front prepayment of costs are exempt from this 26
requirement and shall only be required to submit an actuarial projection of 27
future population flows and adult care home bed and nursing bed needs. An 28
actuarial projection of future population flows and adult home care bed and 29
nursing bed needs shall use (i) appropriate mortality, morbidity, withdrawal, 30
occupancy, and other demographic assumptions and (ii) a projection period 31
that extends to a point at which, in the actuary 's professional judgment, the 32
use of a longer period would not materially affect the results and conclusions. 33
(4) An updated disclosure statement that meets the requirements of 34
G.S. 58-64A-150. 35
(5) If applicable, confirmation that the applicant has secured commitments for 36
construction financing and long -term financing or that a docume nted plan 37
acceptable to the Commissioner has been adopted by the applicant for 38
long-term financing. 39
(6) If the expansion includes any land or other real property that is to be leased, 40
confirmation, if applicable, that the lease has been approved by the 41
Commissioner pursuant to G.S. 58-64A-25. 42
(7) Any other data and pertinent information as the Commissioner may 43
reasonably require with respect to the applicant or the continuing care 44
retirement community to determine the feasibility of the expansion. 45
(c) The C ommissioner shall comply with the review schedule in G.S. 58-64A-70 in 46
response to an expansion application. 47
(d) The Commissioner shall approve the expansion application if all of the following 48
requirements are met: 49
(1) The expansion application complies with this section. 50
General Assembly Of North Carolina Session 2025
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(2) None of the grounds for denial listed in G.S. 58-64A-280 apply to the 1
applicant. 2
(3) The feasibility study meets all of the following requirements: 3
a. Includes in the prospective financial statements all current obligations 4
and liabilities of the applicant as well as those to be undertaken by the 5
applicant. 6
b. Demonstrates that the expansion is financially viable and will not have 7
an unreasonably adverse effect on the financial ability of the applicant 8
to furnish continuing care. 9
c. Demonstrates the existence of a market for the proposed expansion 10
based on reliable data, which meets all of the following requirements: 11
1. Is specific to the continuing care retirement community. 12
2. Considers existing and proposed competition in the primar y 13
market area. 14
3. Demonstrates that the rate of penetration in the proposed 15
market area is within acceptable industry ranges. 16
(4) The applicant demonstrates the ability to provide continuing care and meet all 17
financial and contractual obligations related t o its operations, including the 18
financial requirements of this Article. 19
(5) The applicant, if applicable, has secured commitments for construction 20
financing and long-term financing or that a documented plan acceptable to the 21
Commissioner has been adopted by the applicant for long-term financing. 22
(6) The actuarial study, if applicable, projects that the continuing care retirement 23
community will be in satisfactory actuarial balance within a reasonable period 24
of time once stabilized occupancy of the expansion is achieved, or if no 25
actuarial study is required, the actuarial projection of future population flows 26
demonstrates a sufficient number of adult care home beds and nursing beds to 27
meet the needs of residents and the contractual obligations of the applicant. 28
(e) After the Commissioner approves the expansion application, the provider shall submit 29
periodic sales and development reports to the Commissioner in a form prescribed by the 30
Commissioner to monitor the expansion project. 31
(f) After the Commissioner approves the expansion application, the provider may 32
commence construction of the new independent living units at the continuing care retirement 33
community as proposed and, upon completion of construction and the satisfaction of all other 34
legal requirements, open the expansion and provide continuing care to the residents of the new 35
independent living units. 36
"§ 58-64A-95. Expansion entrance fees and deposits. 37
All entrance fees and deposits collected for independent living units in an expansion requiring 38
Commissioner approval under this Part shall be placed in an escrow account in accordance with 39
Part 4 of this Article unless otherwise exempted by the Commissioner. 40
"Part 4. Escrow Account. 41
"§ 58-64A-100. Escrow account required. 42
All entrance fees and deposits , when required by this Article, shall be deposited by the 43
provider in an escrow account and shall be maintained in a segregated account without any 44
commingling with other funds, including any funds or accounts owned by the provider. The 45
escrow agent and a ll terms governing an escrow account shall be approved in advance by the 46
Commissioner. 47
"§ 58-64A-105. Escrow agreement requirements. 48
The escrow agreement between an applicant or a provider and the escrow agent shall be in 49
writing and include, in addition to any other provisions required by law, all of the following: 50
General Assembly Of North Carolina Session 2025
Senate Bill 105-First Edition Page 21
(1) A provision requiring that all funds received shall be placed into the escrow 1
account in accordance with G.S. 58-64A-115. 2
(2) A provision for investment of escrow account funds in a manner consistent 3
with G.S. 58-64A-120. 4
(3) A provision regarding the payment of interest earned on the funds held in the 5
escrow account in the manner specified in G.S. 58-64A-125. 6
(4) A provision for refunds to depositors in the manner specified by 7
G.S. 58-64A-135. 8
(5) A provision that any refund or release of escrow account funds be performed 9
in the manner specified in G.S. 58-64A-135 and G.S. 58-64A-140, including 10
a statement as to whom payment of interest earned on the funds will be made. 11
(6) A statement that the purpose of the escrow agreement is to protect residents 12
and prospective residents. 13
(7) The amount of the escrow agent fee. 14
(8) A provision that funds deposited shall not be subject to any liens or charges 15
by the escrow agent. 16
(9) A provision requiring the escrow agent to furnish the provider with a monthly 17
statement indicating the amount of any disbursements from or deposits to the 18
escrow account and the condition of the account during the monthly period 19
covered by the statement. 20
(10) A provision requiring the escrow agent to furnish to the Commissioner, upon 21
the request of the Commissioner, periodic reports, including the monthly 22
statement required pursuant to subdivision (9) of this sectio n, certifying the 23
amount of funds held on deposit. 24
(11) A provision requiring the escrow agent to furnish to a depositor, upon the 25
request of a depositor, a statement indicating the depositor 's portion of the 26
escrow account. 27
(12) Representations by the escrow agent that it is not and shall not be during the 28
term of the escrow agreement, a related party of the provider, a lender to the 29
provider, or a fiduciary for any lender or bondholder for the provider, unless 30
approved by the Commissioner. 31
"§ 58-64A-110. Changes to escrow agreement. 32
All changes to an escrow agreement shall be submitted to, and approved by, the 33
Commissioner before use by a provider. 34
"§ 58-64A-115. Entrance fee and deposit delivery to the escrow agent. 35
(a) The provider shall deliver to the escrow agent any entrance fees or deposits required 36
to be maintained in an escrow account pursuant to this Article within 10 business days after 37
receipt by the provider. 38
(b) Any deposit delivery to an escrow agent pursuant to this Article shall be accompanied 39
with a copy of the executed nonbinding reservation agreement, binding reservation agreement, 40
or continuing care contract, a copy of the receipt given to the depositor, a summary of all deposits 41
made on that date, and any other materials required by the escrow agent. 42
"§ 58-64A-120. Investment of funds in escrow. 43
(a) All entrance fees and deposits subject to an escrow agreement under this Article shall 44
be maintained by the escrow agent in one of the following manners: 45
(1) Investment in an interest-bearing account. 46
(2) Investment in instruments guaranteed by the federal government or an agency 47
of the federal government. 48
(3) Investment in investment funds secured by federally guaranteed instruments. 49
(b) Any investment shall not diminish the funds held in escrow below the amounts 50
required by this Article. 51
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"§ 58-64A-125. Earnings from funds in escrow. 1
(a) Interest, income, and other gains derived from funds held in an escrow account shall 2
not be released or distributed from the escrow account except upo n written approval of the 3
Commissioner. 4
(b) Approval by the Commissioner for the release of earnings generated from funds held 5
in escrow shall be based upon an assessment that funds remaining in the escrow account meet 6
the requirements of this Article and, if applicable, will be sufficient to pay refunds and any 7
interest promised to all depositors. 8
(c) When release of earnings is approved by the Commissioner, interest earned by the 9
funds in the escrow account shall be distributed to the provider or depositors in accordance with 10
the terms of the continuing care contract, binding reservation agreement, or nonbinding 11
reservation agreement. 12
"§ 58-64A-130. Escrowed funds not to be used as collateral. 13
No funds held in an escrow account shall be encumbered or used as collateral for any 14
obligation of the provider, or any other person, unless the provider obtains prior written approval 15
from the Commissioner for the encumbrance or use as collateral. The Commissioner shall not 16
approve any encumbrance or use as collater al under this section unless the encumbrance or use 17
as collateral is expressly subordinated to the rights of depositors under this Article to refunds of 18
their entrance fees or deposits. 19
"§ 58-64A-135. Refunds of escrowed entrance fees and deposits. 20
(a) An escrow agent shall refund to a depositor, or their legal representative, all amounts 21
required by the depositor's nonbinding reservation agreement, binding reservation agreement, or 22
continuing care contract upon receiving written notice from the provider of any of the following: 23
(1) The death of a depositor. 24
(2) Nonacceptance by the provider. 25
(3) Voluntary cancellation. 26
(4) The denial of an application pursuant to this Article. 27
(5) Written notice from the Commissioner. 28
(b) Refunds required in subsection (a) of this section shall be paid within 10 business 29
days after the escrow agent receives the written notice described in subsection (a) of this section. 30
(c) If voluntary cancellation of a continuing care contract or a binding reservation 31
agreement occurs after construction of the continuing care retirement community or expansion 32
of a continuing care retirement community has begun, but prior to the independent living unit 's 33
initial occupancy, the refund may be delayed until another depositor has reserved a sim ilar 34
independent living unit and paid the necessary entrance fee or deposit. This delay shall not exceed 35
one year, unless the time period is extended by the Commissioner upon a showing of good cause 36
by the provider. 37
"§ 58-64A-140. Release of escrowed entrance fees and deposits. 38
(a) To request a release of the first twenty-five percent (25%) of each escrowed entrance 39
fee and deposit, a provider shall petition in writing to the Commissioner and certify all of the 40
following: 41
(1) The provider has presold a t least fifty percent (50%) of the proposed 42
independent living units, having received a minimum ten percent (10%) 43
deposit of the total of each applicable entrance fee and placed it in escrow. 44
Any independent living unit for which a refund is pending shall not be counted 45
toward the fifty percent (50%) requirement. 46
(2) The provider has long -term financing in place for the proposed continuing 47
care retirement community or expansion, or if the provider is leasing the land 48
or other real property of the continuing care retirement community, 49
certification that the lease is in place and, if applicable, that the lease has been 50
approved by the Commissioner pursuant to G.S. 58-64A-25. 51
General Assembly Of North Carolina Session 2025
Senate Bill 105-First Edition Page 23
(3) For a proposed continuing care retirement community, the aggregate entrance 1
fees received or receivable by the provider pursuant to binding reservation 2
agreements and continuing care contracts, plus the anticipated proceeds of any 3
first mortgage loan or other long-term financing commitment, plus any equity 4
being contributed by the provider or a related party, are equal to not less than 5
ninety percent (90%) of the following amount: (i) the aggregate cost of 6
constructing or purchasing, equipping, and furnishing the proposed continuing 7
care retirement community, plus (ii) not less than ninety percent (90%) of the 8
funds estimated to be necessary to fund start -up losses and to reasonably 9
assure full performance of the provider 's future continuing care obligations, 10
as reported in the statement of cash flows required by 11
G.S. 58-64A-150(a)(37). 12
(b) To request a release of the remaining seventy -five percent (75%) of escrowed 13
entrance fees and deposits, a provider shall petition in writing to the Commissioner and certify 14
all of the following: 15
(1) The provider has presold at least seventy percent (70%) of the proposed 16
independent living units, having received a minimum ten percent (10%) 17
deposit of each applicable entrance fee and maintains at least seventy -five 18
percent (75%) of each entrance fee or deposit received in escrow, or has 19
maintained an independent living unit occupancy minimum of seventy percent 20
(70%) for at least 60 days. Any independent living unit for which a refund is 21
pending shall not be counted toward the seventy percent (70%) requirement. 22
(2) Construction or purchase of the independent living units has been completed 23
and an occupancy permit, if applicable, has been issued by the local 24
government having authority to issue those permits. 25
(3) The independent living units are available for occupancy by the new residents. 26
(c) The Commissioner shall instruct the escrow agent in writing to release to the provider 27
entrance fees and deposits in the escrow account only when the Commissioner has confirmed the 28
information provided by the provider pursuant to subsection (a) or subsection (b) of this section. 29
(d) The escrow agent shall release the entrance fees and deposits held in the escrow 30
account to the provider only when the Commissioner has instructed it to do so in writing. 31
(e) When a provider discloses in an application that construction wi ll be completed and 32
commence operating in different phases, the Commissioner shall apply the requirements in 33
subsections (a) and (b) of this section to any one or group of phases requested by the provider, 34
provided the provider demonstrates in the prospect ive financial statements filed with the 35
application that the phase or group of phases is financially viable without the need for any 36
additional phases. 37
(f) For the purposes of this section, a refund is pending if a depositor has canceled a 38
continuing care contract or a binding reservation agreement but has not yet received a refund, 39
either because of timing or because another depositor has not reserved a similar independent 40
living unit and paid the necessary entrance fee or deposit in order to trigger a ref und to the 41
canceling depositor. 42
"Part 5. Disclosure Statement. 43
"§ 58-64A-145. Definitions. 44
The following definitions apply to this Part: 45
(1) Adjusted net operating margin ratio. – A profitability ratio that measures the 46
margin generated from the core operations of a provider and net cash proceeds 47
from entrance fees. The quotient shall be calculated by dividing the sum of 48
resident operating income and net proceeds from entrance fees by the sum of 49
resident revenue and net cash proceeds from entrance fees. 50
General Assembly Of North Carolina Session 2025
Page 24 Senate Bill 105-First Edition
(2) Average daily cash operating expenses. – The total expenses of a provider 1
incurred in the conduct of the provider 's business over a defined period of 2
time, divided by the number of days in that period. For purposes of this 3
definition, "total expenses " includes interest expense, but excludes 4
depreciation expense, amortization expense, realized or unrealized 5
nonoperating losses or expenses, bad debt expense, and other noncash 6
expenses. 7
(3) Capital expenditures as a percentage of depreciation ratio. – A capital 8
structure ratio that indicates the level of capital reinvestment by a provider. 9
The quotient shall be computed by dividing total purchases of property, plant, 10
and equipment by total depreciation expense. 11
(4) Cushion ratio. – A liquidity ratio that measures a provider's ability to pay its 12
annual debt service using its unrestricted cash and investments. The quotient 13
shall be computed by dividing unrestricted cash and investments by annual 14
debt service. 15
(5) Days cash on hand ratio. – A liquidity ratio that measures the number of days 16
of cash operating expenses a provider could cover using its existing 17
unrestricted cash and investments. The quotient shall be computed by dividing 18
unrestricted cash and investments by average daily cash operating expenses. 19
(6) Multi-entity organization. – A collection of distinct legal entities that are 20
under common control. 21
(7) Net operating margin ratio. – A profitability ratio that measures the margin 22
generated from the core operations of a provider. The quotient shall be 23
calculated by dividing resident operating income by resident revenue. 24
(8) Operating ratio. – A profitability ratio that measures whether current year cash 25
operating revenues are sufficient to cover current year cash operating 26
expenses without the inclusion of cash from entrance fee receipts. The 27
quotient shall be computed by dividing total operating expenses, excluding 28
depreciation expense and amortization expense, by total operating revenues, 29
excluding amortization of entrance fees and other deferred revenue. 30
(9) Resale fee. – A contractual assessment by the provider against the proceeds 31
from the sale of an independent living unit. 32
(10) Resident expense. – Total operating expenses excluding interest expense, 33
depreciation expense, amortization expense, and income taxes. 34
(11) Resident revenue. – Total operating revenue excluding interest and dividend 35
income, entrance fee amortization, and contributions. 36
(12) Unrestricted cash and investments. – The sum of the provider 's unrestricted 37
cash, cash equivalents and investments, and any provider restricted funds that 38
are available to pay debt or to pay operating expenses. For purposes of this 39
definition, the assets serving as the operating reserve required by 40
G.S. 58-64A-245 shall be considered unrestricted. 41
(13) Unrestricted cash and investments to long -term debt ratio. – A capital 42
structure ratio that (i) measures a provider 's position in available cash and 43
marketable securities in relation to its long -term debt and (ii) meas ures a 44
provider's ability to withstand annual fluctuations in cash. The quotient shall 45
be calculated by dividing unrestricted cash and investments by total long-term 46
debt, less the current portion of long-term debt. 47
"§ 58-64A-150. Disclosure statement. 48
(a) A provider shall prepare a disclosure statement for each continuing care retirement 49
community operated or to be operated in this State that includes all of the following information: 50
General Assembly Of North Carolina Session 2025
Senate Bill 105-First Edition Page 25
(1) The name, business address, and telephone number of the provider and a 1
statement of whether the provider is a partnership, corporation, or other type 2
of legal entity. 3
(2) A statement disclosing whether the provider is for -profit or nonprofit, and if 4
nonprofit, the provision of the federal Internal Revenue Code under which the 5
provider is exempt from the payment of income tax, and a statement disclosing 6
whether the provider is current on all tax filings. 7
(3) A statement disclosing whether the provider is privately owned or publicly 8
owned. 9
(4) A statement disclosing whethe r the provider is part of a multi -entity 10
organization, and if so, both of the following: 11
a. A statement indicating whether the audited financial statements 12
required by sub division (36) of this subsection are prepared on a 13
consolidated basis with all entiti es included and , if not, a statement 14
indicating how the audited financial statements are prepared. 15
b. A company structure chart showing the provider's relationship with the 16
other entities in the multi-entity organization. 17
(5) A statement identifying the controlling person of the provider, if control does 18
not exist with the provider, including the controlling person 's business 19
address. 20
(6) The name, business address, education, work experience, and length of service 21
with the provider or the provider 's cont rolling person of (i) a ll officers, 22
directors, trustees, managers, managing or general partners of the provider 23
and, if applicable, the provider's controlling person, and any person having a 24
ten percent (10%) or greater equity or beneficial interest in the provider or the 25
provider's controlling person and (ii) a ny person who will be managing the 26
continuing care retirement community on a day-to-day basis, and a description 27
of the person 's interest in or occupation with the provider or controlling 28
person. If any person required to be named pursuant to this subdivision does 29
not have a business address or uses this person's home address as the person's 30
business address, the provider shall list the address of the provider as the 31
person's business address. A provider shall not disclose the personal address 32
of any person required to be named pursuant to this subdivision, unless 33
required to do so by another provision of law or a court order. 34
(7) The following information on all persons named in response to subdi visions 35
(1), (5), and (6) of this subsection: 36
a. A description of the person 's business experience, if any, in the 37
operation or management of a continuing care retirement community. 38
b. The name and address of any professional service firm, association, 39
trust, partnership, or corporation in which this person has, or which 40
has in this person, a ten percent (10%) or greater interest and which it 41
is presently intended shall currently or in the future provide goods, 42
leases, or services to the provider of an aggr egate value of five 43
thousand dollars ($5,000) or more within any fiscal year, including a 44
description of the goods, leases, or services and the actual or probable 45
cost to the provider, or a statement that this cost cannot presently be 46
estimated and the reason why it cannot be presently estimated. 47
c. A description of any matter in which the person (i) has been convicted 48
of any felony or pleaded nolo contendere to a felony charge , (ii) has 49
been held liable or enjoined in a civil action by final judgment 50
involving fraud, embezzlement, fraudulent conversion, or 51
General Assembly Of North Carolina Session 2025
Page 26 Senate Bill 105-First Edition
misappropriation of property, or (iii) is subject to a currently effective 1
injunctive or restrictive court order, or within the past five years, had 2
any state or federal license or permit suspended or revoked as a result 3
of an action brought by a governmental agency or department. 4
(8) A brief summary of the role and responsibilities of the board of directors or 5
other governing body of the provider and, if applicable, the provider 's 6
controlling person, incl uding how the members of the board of directors or 7
other governing body are selected and their responsibilities. 8
(9) A statement disclosing whether any related party provides, or will provide in 9
the case of a continuing care retirement community under deve lopment, 10
goods, leases, or services to the provider of an aggregate value of five 11
thousand dollars ($5,000) or more within any fiscal year, not already disclosed 12
pursuant to subdivision (7) or (15) of this subsection, and a description of the 13
goods, leases, or services and the actual or probable cost to the provider, or a 14
statement that this cost cannot presently be estimated and the reason why it 15
cannot be presently estimated. 16
(10) A statement indicating whether the provider has a relationship with any 17
religious, charitable, or other organization or person, along with the nature and 18
extent of that relationship. 19
(11) The name of any other person who will be responsible for the financial and 20
contractual obligations of the provider not already disclosed and the extent of 21
their responsibility. 22
(12) A statement as to whether the provider is, or will be, a part of an obligated 23
group and, if so, the names of the other persons in, or to be in, the obligated 24
group. 25
(13) A statement as to whether the provider, or any obligated group that the 26
provider is a part of, is not in compliance with any covenant contained in any 27
debt agreement and, if not in compliance, specifying each failure to comply 28
and the steps being taken to cure the noncompliance. 29
(14) A statement indicating whether the provider currently employs or will employ 30
a third-party manager for the continuing care retirement community and, if so, 31
the name of the third -party manager employed and their experience in 32
providing management services within the cont inuing care retirement 33
community industry. 34
(15) If the provider is leasing or intends to lease from another person any part of 35
the real property of the continuing care retirement community, a statement 36
disclosing the parties to the lease, the original leas e term, and the remaining 37
term of the lease. 38
(16) A statement as to whether the provider has endowment funds or has 39
endowment funds available through a related party, that are available to 40
provide financial aid to residents, including a description of the funds and any 41
restrictions on their use. 42
(17) The name, address, and description of the physical property or properties of 43
the continuing care retirement community, existing or proposed, and to the 44
extent proposed, the estimated completion date or dates, whether construction 45
has begun, and the contingencies subject to which construction may be 46
deferred. 47
(18) The number of existing living units, or the number of living units to be 48
constructed, at the continuing care retirement community. 49
General Assembly Of North Carolina Session 2025
Senate Bill 105-First Edition Page 27
(19) If the provider is licensed to provide continuing care at home, a description of 1
the continuing care at home program, including the primary market area 2
served. 3
(20) The number or estimated number of residents of the continuing care retirement 4
community to be provided ser vices by the provider pursuant to a continuing 5
care or continuing care at home contract. 6
(21) The 12-month daily average occupancy rate at the continuing care retirement 7
community, by living unit type, as of the provider's fiscal year-end for the past 8
five years or for each year of the continuing care retirement community 's 9
operation if it has been in operation for less than five years. 10
(22) A statement indicating whether the provider held the semiannual meetings 11
required by G.S. 58-64A-360 during the previ ous fiscal year, including the 12
dates held. 13
(23) A description of any property rights of residents in the real property of the 14
continuing care retirement community. 15
(24) The services provided or proposed to be provided pursuant to continuing care 16
and continuing care at home contracts, including the extent to which health 17
care is furnished, and a clear statement of which services are included for 18
specified periodic fees and which services are or will be made available for an 19
extra charge. The description shall include a statement describing what health 20
care services are or will be provided by the provider directly and what health 21
care services are or will be provided through a contract with a third party. 22
(25) A description of all nonancillary fees required of residents, including entrance 23
fees, periodic fees, transfer fees, and resale fees, if any. The description shall 24
include all of the following: 25
a. A statement of the fees that will be charged if a resident marries or 26
otherwise increases the number of perso ns residing in the resident 's 27
living unit while a resident of the continuing care retirement 28
community, and a statement of the terms concerning the entry of a 29
spouse or other person to the continuing care retirement community 30
and the consequences if the sp ouse or other person does not meet the 31
requirements for entry. 32
b. The manner by which the provider may adjust periodic fees and the 33
limitations on the adjustments, if any; and, if the continuing care 34
retirement community is already in operation, a table sh owing the 35
frequency, average percent increase, and average dollar amount of 36
each increase in periodic fees for the previous five years, or for each 37
year of the continuing care retirement community's and, if applicable, 38
continuing care at home program's operation if it has been in operation 39
for less than five years. If the continuing care retirement community is 40
not yet in operation, the provider shall include a table showing the 41
expected frequency, average percent increase, and average dollar 42
amount of each increase in periodic fees utilized in the five -year 43
prospective financial statements required pursuant to subdivision (37) 44
of this subsection. 45
c. A table showing the current entrance fee charges as well as the 46
frequency, average percent increase, and aver age dollar amount of 47
each increase in entrance fees for the previous five years, or for each 48
year of the continuing care retirement community and, if applicable, 49
continuing care at home program's operation if it has been in operation 50
for less than five years. If the continuing care retirement community is 51
General Assembly Of North Carolina Session 2025
Page 28 Senate Bill 105-First Edition
not yet in operation, the provider shall include a table showing the 1
expected frequency, average percent increase, and average dollar 2
amount of each increase in entrance fees utilized in the five -year 3
prospective financial statements required pursuant to subdivision (37) 4
of this subsection. 5
(26) For providers who offer refundable entrance fee continuing care or continuing 6
care at home contracts, a statement disclosing: 7
a. The conditions that must be met bef ore all or any portion of an 8
entrance fee will be refunded. 9
b. The number and aggregate dollar amount of refundable entrance fee 10
refunds that, as of the provider's most recent fiscal year-end: 11
1. Will be due once all contractual conditions are met. 12
2. Are currently due, including a disclosure of the number and 13
aggregate dollar amount of refunds that are 30 or more days 14
past due. 15
3. Will be due, once all conditions are met, to residents who have 16
permanently vacated their independent living unit and now 17
reside in a non -independent living unit provided by the 18
provider. 19
4. Will be due to residents who have permanently vacated their 20
independent living unit and now reside in a non -independent 21
living unit provided by the provider whose former independent 22
living unit has already been resold. 23
(27) The circumstances under which a resident will be permitted to remain a 24
resident at the continuing care retirement community in the event of possible 25
financial difficulties of the resident. 26
(28) The terms and conditions under which a continuing care and continuing care 27
at home contract may be canceled by the provider, or by the resident, and the 28
conditions, if any, under which all or any portion of the entrance fee or any 29
other fee will be refunded in the event of cancellation of the continuing care 30
or continuing care at home contract by the provider, or by the resident, or in 31
the event of the death of the resident, prior to, or following, occupancy of a 32
living unit or the start of services not already disclosed in subdivision (26) of 33
this subsection. 34
(29) The conditions under which a living unit occupied by a resident may be made 35
available by the provider to a different or new resident other than on the death 36
of the prior resident. 37
(30) The conditions or circumstances under whi ch a provider may require a 38
resident to move from the resident's living unit to another living unit for the 39
safety of the resident or for the good of the provider. 40
(31) The health and financial condition required for an individual to be accepted as 41
a resident and to continue as a resident once accepted, including the effect of 42
any change in the health or financial condition of a person between the date 43
of entering into a continuing care or continuing care at home contract and the 44
date of initial occupancy of a living unit or the start of services. 45
(32) Any age and insurance requirements for admission. 46
(33) The provisions that have been made or will be made, including the 47
requirements of G.S. 58-64A-100 and G.S. 58-64A-245, to provide reserve 48
funding or security to enable the provider to refund entrance fees and deposits 49
when due and to fulfill all of its other obligations under binding reservation 50
agreements, continuing care contracts, and continuing care at home contracts, 51
General Assembly Of North Carolina Session 2025
Senate Bill 105-First Edition Page 29
including the establishment of escrow accounts, trusts, or reserve funds, 1
together with the manner in which these funds will be invested, and the names 2
and experience of any person or persons who will make the investment 3
decisions. The information pro vided shall also include a schedule detailing 4
how the operating reserve for the continuing care retirement community has 5
been calculated which shall agree with the amount calculated and reported to 6
the Commissioner pursuant to G.S. 58-64A-270. 7
(34) A descr iption of any expansion, renovation, or planned expansion or 8
renovation of the continuing care retirement community. 9
(35) An explanation if the provider's most recent audited financial statements were 10
not prepared within 150 days or if an audit opinion was received other than an 11
unqualified opinion. 12
(36) Audited financial statements meeting the requirements of G.S. 58-64A-200. 13
(37) Five-year prospective financial statements of the provider that are either 14
compiled or examined by an independent certified public accountant, that can 15
be prepared on a stand-alone basis, or consolidated or combined with the same 16
persons as the annual audited financial statements filed with the 17
Commissioner pursuant to G.S. 58-64A-200, and that meet all of the 18
following requirements: 19
a. Include a summary of significant assumptions and a summary of 20
significant accounting policies. 21
b. Include, if financial projections, an identification of the hypothetical 22
assumptions and a description of the limitations on the usefulness of 23
the presentation. 24
c. Include as supplemental information, if prepared on a consolidated or 25
combined basis, a consolidating or combining: 26
1. Balance sheet. 27
2. Statement of operations and changes in net assets or equity. 28
3. Statement of cash flows. 29
d. Include a statement of operations as supplemental information for each 30
continuing care retirement community operated under this Article if 31
the provider operates more than one continuing care retirement 32
community or has operations that are separate and distinct from the 33
operation of a continuing care retirement community operating under 34
this Article. 35
e. Contain the same line items and categories as the annual audited 36
financial statements filed with the Commissioner pursuant to 37
G.S. 58-64A-195. 38
f. For continuing care r etirement communities that are under 39
development, the prospective financial statements required by this 40
subdivision shall include narrative disclosure detailing all significant 41
assumptions used in the preparation of the prospective financial 42
statements, including all of the following: 43
1. Details of any long -term financing for the purchase or 44
construction of the continuing care retirement community , 45
including interest rate, repayment terms, loan covenants, and 46
assets pledged. 47
2. Details of any leasing agreements where the provider is leasing 48
from another person any part of the real property of the 49
continuing care retirement community, including the length of 50
the lease and the remaining term. 51
General Assembly Of North Carolina Session 2025
Page 30 Senate Bill 105-First Edition
3. Details of any other funding sources that the provider 1
anticipates using to fund any start -up losses or to provide 2
reserve funds to assure full performance of the obligations of 3
the provider under continuing care contracts. 4
4. The total entrance fees to be received from or on behalf of, 5
residents at, or prior to, commencement of operations along 6
with anticipated accounting methods used in the recognition of 7
revenues from and expected refunds of entrance fees. 8
5. A description of any equity capital to be received by the 9
provider. 10
6. The cost of the acquisition of th e continuing care retirement 11
community or, if the continuing care retirement community is 12
to be constructed, the estimated construction cost and cost to 13
acquire the land. 14
7. Related costs, including financing and development costs, that 15
the provider expects to incur or become obligated for prior to 16
the commencement of operations. 17
8. The marketing and resident acquisition costs to be incurred 18
prior to commencement of operations. 19
9. A description of the assumptions used for calculating the 20
estimated occupancy rate of the continuing care retirement 21
community and the effect on the income of the provider of 22
government subsidies for health care services. 23
(38) A narrative describing the reasons for any material differences between (i) the 24
five-year prospective financial statements included as a part of the disclosure 25
statement recorded most immediately subsequent to the start of the provider's 26
most recently completed fiscal year and (ii) the actual results of operations of 27
the provider's most recently completed fiscal year. 28
(39) A table detailing the following key financial metrics for the past three fiscal 29
years, including the most recent fiscal year, or for each year the provider has 30
been in operation if the provider has been in operation for less than three years, 31
plus the next three fiscal years, based on the provider 's current and prior 32
annual audited financial statements and current five-year prospective financial 33
statements. If there is a material year over year change in any of the key 34
financial metrics, the provider shall include a narrative describing the reasons 35
for the material change. For providers who are part of an obligated group, the 36
ratios shall be computed for the provider alone and for the obligated group. 37
a. Liquidity ratios: 38
1. Days cash on hand ratio. 39
2. Cushion ratio. 40
b. Profitability ratios: 41
1. Operating ratio. 42
2. Net operating margin ratio. 43
3. Adjusted net operating margin ratio. 44
c. Capital structure ratios: 45
1. Debt service coverage ratio. 46
2. Unrestricted cash and investments to long-term debt ratio. 47
3. Capital expenditures as a percentage of depreciation expense 48
ratio. 49
(40) If the provider has had an actuarial study prepared within the prior three years, 50
a statement of actuarial opinion which includes a description of the key 51
General Assembly Of North Carolina Session 2025
Senate Bill 105-First Edition Page 31
assumptions used to prepare the actuarial study and an opinion on satisfactory 1
actuarial balance. 2
(41) A summary of the last examination report issued by the Commissioner, if any, 3
with references to the page numbers of the examination report noting any 4
deficiencies found by the Commissioner, and the actions taken by the provider 5
to rectify those deficiencies, indicating in the summary where the full 6
examination report may be inspected at the continuing care retirement 7
community. The summary required by this subdivision shal l not be required 8
if the last examination report is more than three years old. 9
(42) Any other material information concerning the continuing care retirement 10
community, the provider, or any related party of the provider, which, if 11
omitted, would lead a reas onable person not to enter a continuing care or 12
continuing care at home contract with the provider. 13
(b) A copy of the most common continuing care and continuing care at home contract 14
used by the provider shall be attached to each disclosure statement. To the extent multiple 15
continuing care or continuing care at home contracts are utilized by the provider for the 16
continuing care retirement community, a narrative shall be included within the disclosure 17
statement listing each contract type offered and the material differences of each. 18
(c) The cover page of the disclosure statement shall, in a prominent location and in 19
boldface type, include all of the following: 20
(1) The date of the disclosure statement. 21
(2) The last date through which the disclosure statement may be delivered. 22
(3) That the delivery of the disclosure statement to a contracting party before the 23
execution of a binding reservation agreement, continuing care contract, or 24
continuing care at home contract is required by this Article. 25
(4) That the disc losure statement has not been reviewed or approved by any 26
government agency or representative to ensure accuracy of the information set 27
out. 28
(5) That the disclosure statement has been filed with, and recorded by, the North 29
Carolina Department of Insurance in accordance with this Article. 30
(6) That the disclosure statement contains all of the information required by this 31
Article, that it is correct, in all material respects, and that knowingly delivering 32
a disclosure statement that contains an untrue statemen t or omits a material 33
fact may subject the provider to penalties as set forth in this Article. 34
(d) The date on the cover page of the disclosure statement shall coincide with the last day 35
of the provider's fiscal year covered by the information contained within the disclosure statement. 36
(e) The disclosure statement shall be in plain English and in language understandable by 37
a layperson and combine conciseness, simplicity, and accuracy to fully advise residents and 38
potential residents of the items required by this section. 39
(f) The Commissioner shall review the disclosure statement for completeness but is not 40
required to review the disclosure statement for accuracy. 41
(g) The Commissioner may require a provider to alter or amend a disclosure statement to 42
provide full and fair disclosure to residents and prospective residents, and the Commissioner may 43
require the revision of a disclosure statement which the Commissioner finds to be incomplete, 44
unnecessarily complex, voluminous, confusing, or illegible. 45
(h) The Commissioner may prescribe a standardized format for the disclosure statement 46
required by this section. 47
(i) The Commissioner shall post the current disclosure statement for each continuing care 48
retirement community on the Department's website in accordance with this Article. 49
"§ 58-64A-155. Required delivery of disclosure statement. 50
General Assembly Of North Carolina Session 2025
Page 32 Senate Bill 105-First Edition
(a) A provider shall deliver a current disclosure statement meeting the requirements of 1
G.S. 58-64A-150 to the person or the person 's legal representative with whom a binding 2
reservation agreement, continuing care contract, or continuing care at home contract is to be 3
entered into. The disclosure statement shall be delivered no later than the earliest of the following 4
occurrences: (i) the execution of a binding reservation agre ement, continuing care contract, or 5
continuing care at home contract, or (ii) the transfer of any money or other consideration, other 6
than a nonbinding reservation agreement deposit, to a provider by or on behalf of a prospective 7
resident. For purposes of this subsection, a disclosure statement is current if (i) it is dated within 8
one year plus 160 days prior to the date of delivery and (ii) it is the most recently recorded 9
disclosure statement on file with the Commissioner. 10
(b) The delivery required by thi s section may be by electronic means if the provider 11
obtains the written consent of the person with whom the binding reservation agreement, 12
continuing care contract, or continuing care at home contract is to be entered into. For the 13
purposes of this subsec tion, delivery by electronic means shall mean delivery by either of the 14
following methods: 15
(1) Delivery to an electronic mail address at which the person has consented to 16
receive the disclosure statement. 17
(2) Both of the following: 18
a. Posting the disclosure statement on an electronic network or site 19
accessible by the internet through use of a mobile application, 20
computer, mobile device, tablet, or any other electronic device. 21
b. Sending separate notice of the posting described in sub-subdivision a. 22
of this subdivision to the electronic mail address at which the person 23
consented to receive notice of the disclosure statement posting. 24
(c) After receiving delivery of a disclosure statement pursuant to this section, a 25
prospective resident shall sign an a cknowledgement of receipt. The acknowledgement shall 26
include (i) the date, (ii) the name of the person signing, and (iii) the date of the disclosure 27
statement received, including date revised, if any. The provider shall provide a copy of the 28
acknowledgement of receipt to the person signing and shall maintain the original. The 29
acknowledgement of receipt required by this subsection may be received, given, and maintained 30
in either an electronic or paper form. 31
(d) A copy of all disclosure statements, including all amendments, filed with and 32
recorded by the Commissioner shall be maintained by the provider, in either electronic or paper 33
form, for at least five years. 34
"§ 58-64A-165. Other revisions to disclosure statement. 35
(a) A provider may revise its disclosure statement at any time if, in the opinion of the 36
provider, revision is necessary to prevent an otherwise current disclosure statement from 37
containing a material misstatement of fact or omitting a material fact required to be stated therein. 38
A provider that revises its disclosure statement for this purpose shall submit the revised disclosure 39
statement to the Commissioner before delivery of the disclosure statement to any resident or 40
prospective resident. 41
(b) If a disclosure statement is revised in accordance with this section or 42
G.S. 58-64A-150(g), the cover page shall additionally be revised to reflect the revision date. 43
(c) Within five business days of receipt of a revised disclosure statement pursuant to this 44
section, the Commissioner shall notify the provi der in writing that the revised disclosure 45
statement has been received and recorded and is considered to be the current disclosure statement 46
for purposes of this Article. After sending this notification, the Commissioner shall post the 47
revised disclosure s tatement on the Department 's website within five business days. After 48
receiving the Commissioner's notification, a provider revising its disclosure statement pursuant 49
to this section shall make the revised disclosure statement available to all residents ei ther in 50
electronic or paper form. 51
General Assembly Of North Carolina Session 2025
Senate Bill 105-First Edition Page 33
"Part 6. Binding Reservation Agreement and Continuing Care Contract. 1
"§ 58-64A-170. Binding reservation agreement. 2
A binding reservation agreement shall include all of the following: 3
(1) A provision that the person entering into the agreement may rescind the 4
agreement within 30 days following the later of the following occurrences: (i) 5
the execution of the agreement or (ii) the receipt of a disclosure statement that 6
meets the requirements of G.S. 58-64A-150. 7
(2) A provision that the agreement shall be automatically canceled if either of the 8
following occurs: (i) a depositor dies before signing a continuing care contract 9
or (ii) a depositor would be precluded from signing a continuing care contract 10
and occupying a living unit in the continuing care retirement community under 11
the terms of a continuing care contract due to illness, injury, or incapacity. 12
(3) A provision that, if an agreement is rescinded, automatically canceled, or 13
otherwise canceled by the depositor, the depositor shall receive a refund of all 14
money or other consideration transferred to the provider. All of the following 15
shall be deducted from the depositor's refund: 16
a. Nonstandard costs specifically incurred by the provider at the request 17
of the depositor and described in the agreement. 18
b. Any nonrefundable fees specifically set forth in the agreement. 19
c. Any service charge specifically set forth in the agreement that shall 20
not exceed the greater of (i) three thousand dollars ($3,000) or (ii) two 21
percent (2%) of the entrance fee. In no event shall the service charge 22
exceed the amount of consideration transferred to the provider by the 23
depositor or a service charge be assessed due to the termination of the 24
agreement because of the failure of the provider to meet its obligations 25
under the agreement, or upon the failure of the provider to obtain a 26
permanent license in accordance with this Article. 27
(4) A provision that any refund due to a depositor for a cancellation or termination 28
for reasons not provided for in this section shall be computed in accordance 29
with the terms of the agreement. 30
"§ 58-64A-175. Continuing care contract. 31
(a) A continuing care contract shall include all of the following: 32
(1) A provision that the person contracting with the provider may rescind the 33
contract within 30 days following the later of (i) the execution of the contract 34
or (ii) the receipt of a disclosure statement that meets the requirements of 35
G.S. 58-64A-150, and a resident to whom the contract pertains is not required 36
to move into the continuing care retirement community before the expiration 37
of the 30-day period. 38
(2) A provision that, if a resident dies before occupying a living unit in the 39
continuing care retirement community, or if, on account of illness, injury, or 40
incapacity, a resident would be precluded from occupying a living unit in the 41
continuing care retirement community under the terms of the contract, the 42
contract is automatically canceled. 43
(3) A provision that, for rescinded or canceled contracts under this subsection and 44
contracts canceled before a living unit is initially available for occupancy by 45
the first resident of a living unit, the resident or the resident 's legal 46
representative, shall r eceive a refund of all money or other consideration 47
transferred to the provider, less (i) periodic fees specified in the contract and 48
applicable only to the period a living unit was actually occupied by the 49
resident; (ii) those nonstandard costs specifical ly incurred by the provider at 50
the request of the resident and described in the contract or any contract 51
General Assembly Of North Carolina Session 2025
Page 34 Senate Bill 105-First Edition
amendment signed by the resident; (iii) nonrefundable fees, if set out in the 1
contract; and (iv) a reasonable service charge, if set out in the contract, not to 2
exceed the greater of three thousand dollars ($3,000) or two percent (2%) of 3
the entrance fee. In no event shall the service charge exceed the amount of 4
consideration transferred to the provider by the resident, or a service charge 5
be assessed due to the termination of the contract because of the failure of the 6
provider to meet its obligations under the contract, or upon the failure of the 7
provider to obtain a permanent license in accordance with this Article. 8
(4) A provision that any refund due to a resident for a cancellation or termination 9
for reasons not provided for in this section shall be computed in accordance 10
with the terms of the contract. 11
(b) A continuing care contract shall specify all of the following: 12
(1) All fees required of resident s, including any entrance fee and any ongoing 13
periodic fees. 14
(2) The services to be provided. 15
(3) The policy regarding changing the resident 's living unit, if necessary, for the 16
protection of the health or safety of the resident or the general and economic 17
welfare of other residents. 18
(4) The policies to be implemented if the resident cannot pay the periodic fees. 19
(5) The terms governing the refund of any portion of the entrance fee in the event 20
of death or cancellation by the resident or provider. 21
(6) The policy regarding increasing the periodic fees. 22
(7) A description of the living unit. 23
(8) Any property rights of the resident. 24
(9) The policy, if any, regarding periodic fee adjustments if the resident is absent 25
from the continuing care retirement community. 26
(10) Any requirement that the resident maintain long-term care insurance or apply 27
for Medicaid benefits or any other public assistance program. 28
(c) A continuing care contract shall include the following notice immediately above the 29
contract signature line and be in type that is boldfaced, capitalized, underlined, or otherwise set 30
out from the surrounding written material so as to be conspicuous: 31
"NOTICE 32
33
Because the authority to enter into continuing care contracts granted by the North Carolina 34
Department of Insurance is neither a guarantee of performance by the provider nor an 35
endorsement of any continuing care contract provision, prospective residents must carefully 36
consider the risks, benefits, and costs before signing a continuing care contract and are strongly 37
encouraged to seek financial and legal advice before doing so." 38
"Part 7. Continuing Care at Home. 39
"§ 58-64A-180. Home care services defined. 40
As used is this Part, "home care services" is defined in G.S. 131E-136. 41
"§ 58-64A-185. Application. 42
(a) No person shall arrange or provide continuing care at home unless licensed by the 43
Commissioner pursuant to this Article. Only a provider who has obtained a permanent license or 44
a restricted permanent license pursuant to this Article may apply to the Commis sioner for a 45
continuing care at home license. The application shall include all of the following: 46
(1) An application fee of five hundred dollars ($500.00). 47
(2) A draft amended disclosure statement containing a description of the proposed 48
continuing care at home program, including the primary market area to be 49
served, the types of services to be provided, and the fees to be charged. 50
(3) A copy of the proposed continuing care at home contract. 51
General Assembly Of North Carolina Session 2025
Senate Bill 105-First Edition Page 35
(4) An actuarial study prepared in accordance with accepted actuarial standards 1
of practice which estimates when the continuing care at home program is 2
projected to be in satisfactory actuarial balance. Providers who do not collect 3
entrance fees or some other type of up -front prepayment of costs are exempt 4
from thi s requirement and shall only be required to submit an actuarial 5
projection of future population flows and adult care home bed and nursing bed 6
needs using appropriate mortality, morbidity, withdrawal, occupancy, and 7
other demographic assumptions, and using a projection period that extends to 8
a point at which, in the actuary 's professional judgment, the use of a longer 9
period would not materially affect the results and conclusions. 10
(5) A market study prepared by a person experienced in the preparation of market 11
studies for continuing care at home or similar programs that demonstrates 12
sufficient interest in a continuing care at home program. 13
(6) Prospective financial statements prepared by an independent certified public 14
accountant that show the financial impac t of providing continuing care at 15
home on the provider and the continuing care retirement community. The 16
prospective financial statements shall include a statement of activities 17
reporting the revenue and expense details for providing continuing care at 18
home, as well as the impact the program will have on the operations of the 19
provider and the continuing care retirement community, including the 20
operating reserve. 21
(7) Evidence of the license required under Part 3 of Article 6 of Chapter 131E of 22
the General St atutes to provide home care services, or a contract with a 23
licensed home care agency for the provision of home care services to be 24
provided to residents under the continuing care at home program. 25
(b) The Commissioner shall comply with the review schedule in G.S. 58-64A-70 in 26
response to an application for a continuing care at home license. 27
(c) The Commissioner shall approve an application for a continuing care at home license 28
if all of the following requirements are met: 29
(1) The application complies with this section. 30
(2) None of the grounds for denial listed in G.S. 58-64A-280 apply to the 31
applicant. 32
(3) The applicant is able to provide continuing care at home as proposed. 33
(4) There is sufficient consumer interest in the continuing care at home program 34
proposed by the applicant, as evidenced by the market study. 35
(5) The program proposed by the applicant will not have a detrimental financial 36
impact on the applicant and continuing care retirement communit y, as 37
determined by the Commissioner. 38
(d) After receiving a continuing care at home license, the provider may arrange or provide 39
continuing care at home and shall file an amended disclosure statement with the Commissioner 40
which contains the information regarding continuing care at home required by G.S. 58-64A-150. 41
(e) After the issuance of a continuing care at home license, the Commissioner shall 42
require a provider to submit periodic reports in a form prescribed by the Commissioner to monitor 43
the status of the continuing care at home program. 44
"§ 58-64A-190. Continuing care at home contract. 45
(a) A continuing care at home contract shall include all of the following provisions: 46
(1) A provision that the individual contracting with the provider may rescind the 47
contract within 30 days following the later of (i) the execution of the contract 48
or (ii) the receipt of a disclosure statement that meets the requirements of 49
G.S. 58-64A-150. 50
General Assembly Of North Carolina Session 2025
Page 36 Senate Bill 105-First Edition
(2) A provision that, if a resident dies prior to the effective start date of services, 1
or if, on account of illness, injury, or incapacity, a resident would be precluded 2
from meeting the eligibility terms of the contract, the contract is automatically 3
canceled. 4
(3) A provision that, for rescinded or canceled contracts under this subsection, the 5
resident, or the resident 's legal representative, shall receive a refund of all 6
money or other consideration transferred to the provider, less (i) periodic fees 7
specified in the contract and applicable only to the period when services were 8
provided to the resident; (ii) nonrefundable fees, if set out in the contract; and 9
(iii) a reasonable service charge, if set out in the contract, not to exceed the 10
greater of three thousand dollars ($3,000) or two percent (2%) of the entrance 11
fee, if any. 12
(4) A provision that any refund due to a resident for any other cancellation or 13
termination not provided for in subdivisions (1) and (2) of this subsection shall 14
be computed in accordance with the terms of the contract. 15
(b) A continuing care at home contract shall specify all of the following: 16
(1) All fees required, including any entrance fee and any ongoing periodic fees. 17
(2) The services to be provided. 18
(3) The policies to be implemented if the resident cannot pay the periodic fees. 19
(4) The terms governing the refund of any portion of the entrance fee in the event 20
of death or cancellation by the resident or provider. 21
(5) The policy regarding the adjustment of periodic fees. 22
(6) Whether transportation will be provided to residents, including travel to and 23
from the continuing care retirement community for services. 24
(7) The mechanism for monitoring residents who live outside the continuing care 25
retirement community. 26
(8) The process that will be followed to establish priority if a resident wishes to 27
exercise the resident 's right to move into an independent living unit at a 28
continuing care retirement community operated by the provider. 29
(9) The process the provider will follow if it becomes necessary for the resident 30
to move into a long-term care facility. 31
(10) The policy that will be followed if a resident chooses not to move to a 32
long-term care facility when recommended by the provider. 33
(11) The policy, if any, that would entitle a resident to select placement in a 34
long-term care facility that is not owned and operated by the provider or by a 35
related party of the provider. 36
(12) A statement describing any applicable geographical limits of the continuing 37
care at home program, and the policy that will be followed in the event that a 38
resident relocates to a different residence outside the geographical limits 39
covered by the continuing care at home program. 40
(c) A continuing care at home contract shall include the following notice immediately 41
above the contract signature line and be in type that is boldfaced, capitalized, underlined, or 42
otherwise set out from the surrounding written material so as to be conspicuous: 43
"NOTICE 44
45
Because the authority to enter into continuing care at home contracts grante d by the North 46
Carolina Department of Insurance is neither a guarantee of performance by the provider nor an 47
endorsement of any continuing care at home contract provision, prospective residents must 48
carefully consider the risks, benefits, and costs before signing a continuing care at home contract 49
and are strongly encouraged to seek financial and legal advice before doing so." 50
"Part 8. Financial Reporting and Monitoring. 51
General Assembly Of North Carolina Session 2025
Senate Bill 105-First Edition Page 37
"§ 58-64A-195. General requirements related to filing and extensions for filing of annual 1
audited financial statements. 2
(a) All providers shall have an annual audit by an independent certified public accountant 3
and shall file audited financial statements with the Commissioner within 150 days following the 4
end of each fiscal year. 5
(b) Extensions of the filing date may be granted by the Commissioner for 30-day periods 6
upon a showing by the provider and its independent certified public accountant of the reasons for 7
requesting an extension and determination by the Commissioner of good cause for an extension. 8
The request for extension must be received in writing not less than 10 days before the due date 9
and in sufficient detail to permit the Commissioner to make an informed decision with respect to 10
the requested extension. 11
(c) If an initial ext ension is granted in accordance with the provisions in subsection (b) 12
of this section, a similar extension of 30 days is granted for the filing of the provider 's annual 13
disclosure statement. 14
"§ 58-64A-200. Contents of annual audited financial statements. 15
(a) The annual audited financial statements shall report the financial position of the 16
provider as of the end of the most recent fiscal year and the results of its operations, cash flows, 17
and changes in equity or net assets for the year then ended. The audited financial statements shall 18
be comparative, presenting the amounts as of the end of the most current year -end and the 19
amounts as of the immediately preceding year-end. However, in the first year in which a provider 20
is required to file audited financial statements, the comparative data may be omitted. 21
(b) The audited financial statements shall include the following: 22
(1) Report of independent certified public accountant. 23
(2) Balance sheet reporting assets, liabilities, and net assets or equity. 24
(3) Statement of operations. 25
(4) Statement of cash flows. 26
(5) Statement of changes in net assets or equity. 27
(6) Notes to financial statements. 28
(c) The audited financial statements shall be prepared in accordance with one of the 29
following requirements: 30
(1) If a provider is required by generally accepted accounting principles to have 31
their financial statements consolidated with other persons, the audited 32
consolidated financial statements shall include a consolidating balance sheet, 33
a consolidating statement of op erations and changes in net assets or equity, 34
and a consolidating statement of cash flows as supplemental information to 35
the audited consolidated financial statements. This supplemental information 36
shall also include a statement of operations for each continuing care retirement 37
community operated by the provider under this Article. 38
(2) If the provider includes one or more persons acting in concert to offer and 39
provide continuing care, the audited financial statements shall be combined 40
and shall include a co mbining balance sheet, a combining statement of 41
operations and changes in net assets or equity, and a combining statement of 42
cash flows as supplemental information to the audited combined financial 43
statements. This supplemental information shall also inclu de a statement of 44
operations for each continuing care retirement community operated by the 45
provider under this Article. 46
(3) If a provider is part of an obligated group, the audited financial statements 47
shall be either consolidated or combined with the othe r members of the 48
obligated group and shall include a combining or consolidating balance sheet, 49
a combining or consolidating statement of operations and changes in net assets 50
or equity, and a combining or consolidating statement of cash flows as 51
General Assembly Of North Carolina Session 2025
Page 38 Senate Bill 105-First Edition
supplemental information to the audited combined or consolidated financial 1
statements. This supplemental information shall also include a statement of 2
operations for each continuing care retirement community operated by the 3
provider under this Article. 4
(4) If the provider is not required by generally accepted accounting principles to 5
have their financial statements consolidated with other persons, does not 6
include one or more persons acting in concert to offer and provide continuing 7
care, and is not part of an obli gated group, then the audited financial 8
statements shall be a stand -alone financial audit of the provider. The audited 9
financial statements must include as supplemental information, if the provider 10
operates more than one continuing care retirement communit y or has 11
operations that are separate and distinct from the operation of a continuing 12
care retirement community or communities under this Article, a statement of 13
operations for each continuing care retirement community operated by the 14
provider under this Article. 15
(d) If a provider is also licensed to provide continuing care at home, the audited financial 16
statements shall account for the related revenue and expenses generated from the continuing care 17
at home program separate from the provider 's other operations when providing the information 18
required by this section. 19
"§ 58-64A-205. Quarterly reporting. 20
Within 45 days after the end of each fiscal quarter , a provider shall file with the 21
Commissioner all of the following: 22
(1) Quarterly unaudited financial statements of the provider and any obligated 23
group of which the provider is a member, which shall include a balance sheet, 24
a statement of operations, and a statement of cash flows, which shall contain 25
the same categories and line items as the annual audited financial statements 26
filed with the Commissioner pursuant to G.S. 58-64A-195. 27
(2) The 12 -month daily average occupancy rate by living unit type at each 28
continuing care retirement community operated by the provider in this St ate 29
in a form prescribed by the Commissioner. 30
(3) Notice of the following: 31
a. Any change in the provider 's or the provider 's controlling person 's 32
board of directors or other governing body, president, chief executive 33
officer, and chief financial officer. N otice shall include the name of 34
the provider, the name of the controlling person, if applicable, the 35
name of the person previously holding the position, the name of the 36
person currently holding the position, a brief biography of the person 37
currently holding the position, and the date the position change took 38
place. 39
b. Any change in the organizational documents of the provider, including 40
changes in the provider's articles of incorporation and bylaws. Copies 41
of the changed documents shall be submitted with th e notification to 42
the Commissioner. 43
"§ 58-64A-210. Actuarial study. 44
(a) A provider shall submit to the Commissioner, at least once every three years, an 45
actuarial study prepared in accordance with accepted actuarial standards of practice for each 46
continuing care retirement community operated by the provider in this State and any continuing 47
care at home program that the provider is licensed for pursuant to this Article. 48
(b) If the actuary is unable to form an opinion, or if the opinion is adverse or qualifi ed, 49
the statement of actuarial opinion and the actuarial study shall specifically state the reason. 50
General Assembly Of North Carolina Session 2025
Senate Bill 105-First Edition Page 39
(c) The Commissioner may request the information required in this section more 1
frequently to assist in the determination of a possible hazardous condition. 2
(d) A provider required to file an actuarial study under this section that held a license on 3
the effective date of this section shall file an actuarial study with the Commissioner before the 4
expiration of three years following the effective date of this se ction. Thereafter, each provider 5
shall file its required actuarial study before the expiration of three years following the date it last 6
filed an actuarial study with the Commissioner. 7
(e) A provider required to file an actuarial study under this section that did not hold a 8
license on the effective date of this section shall file its first actuarial study within 45 days 9
following the due date for the provider's annual audited financial statements for the fiscal year in 10
which the provider obtained its permanent license. Thereafter, the provider shall file its required 11
actuarial study before the expiration of three years following the date it last filed an actuarial 12
study with the Commissioner. 13
(f) A provider that only offers health care on a fee -for-service basis or only provides a 14
limited discount or limited number of free days in a long-term care facility shall be exempt, unless 15
otherwise required by the Commissioner, from the actuarial study requirement in this section. 16
Providers exempt pursuant to this su bsection shall submit to the Commissioner, at least once 17
every five years, an actuarial projection of future population flows and adult care home bed and 18
nursing bed needs using appropriate mortality, morbidity, withdrawal, occupancy, and other 19
demographic assumptions and using a projection period that extends to a point at which, in the 20
actuary's professional judgment, the use of a longer period would not materially affect the results 21
and conclusions. The Commissioner may require an actuarial projection of future population 22
flows and adult care home bed and nursing bed needs sooner if there has been an increase or 23
decrease of twenty percent (20%) or more of one or more types of living units at a continuing 24
care retirement community during the provider's most recent fiscal year. 25
"§ 58-64A-215. Additional reporting. 26
If the Commissioner determines that additional information is needed to properly monitor the 27
financial condition or operations of a provider or continuing care retirement community or is 28
otherwise needed to protect the interests of residents and the general public, the Commissioner 29
may require a provider licensed under this Article to file any of the following: 30
(1) Monthly unaudited financial statements in the format required by 31
G.S. 58-64A-205 which shall be due no later than 45 days after the end of 32
each month. 33
(2) Any other data, financial statements, and pertinent information as the 34
Commissioner may reasonably require regarding (i) the provider, (ii) the 35
provider's obligated group, (iii) the continuing care retirement community, or 36
(iv) any related party, if the provider relies on a contractual or financial 37
relationship with the related party in order to meet the financial requirements 38
of this Article, or has a material amount invested in, or has a material amount 39
of receivables due from, the related party. 40
"Part 9. Notification Requirements. 41
"§ 58-64A-220. Notifications to Commissioner and residents. 42
A provider shall notify the Commissioner and all residents in writing within 10 business days 43
whenever any of the following apply: 44
(1) The provider fails to maintain the operating reserve required pursuant to Part 45
11 of this Article. 46
(2) The provider, or any obligated group of which the provider is a member, 47
violates or seeks modification, waiver, or extension of any material covenant 48
or material payment terms contained in any debt agreement. 49
(3) The provider has any entrance fee refunds that become more than 30 days 50
contractually past due. 51
General Assembly Of North Carolina Session 2025
Page 40 Senate Bill 105-First Edition
(4) The provider plans to reduce the number of any type of living unit by twenty 1
percent (20%) or more. The notification shall include a statement describing 2
the reasons for the reduction and the effect, if any, on residents and the 3
financial condition of the provider. For the purposes of this subdi vision, the 4
percentage shall be based on the type of living unit being reduced. 5
(5) The provider makes any change to its name, or the name of a continuing care 6
retirement community operated by the provider in this State, including the 7
adoption of an assumed business name. 8
(6) Any proceeding for denial, suspension, or revocation of any license or permit 9
needed to operate all or part of a continuing care retirement community in this 10
State. 11
"§ 58-64A-225. Material changes or deviations in information. 12
(a) An applicant or provider shall notify the Commissioner of material changes or 13
deviations in any information submitted to the Commissioner pursuant to this Article within 10 14
business days after the applicant or provider becomes aware of the change or deviation. 15
(b) Within 30 days after receiving notice of a material change or deviation, the 16
Commissioner shall advise the applicant or provider in writing whether any additional action 17
needs to be taken as a result of the material change or deviation. 18
(c) The Commissioner may suspend any approval, certification, license, or permit issued 19
pursuant to this Article if the applicant or provider fails to give written notice of material changes 20
or deviations required by this section. The suspension shall remain in effect until the 21
Commissioner has (i) assessed the potential impact of the material changes or deviations on the 22
applicant or provider and the interests of residents and depositors and (ii) taken any action 23
necessary under this Article to protect the interests of any residents and depositors. 24
(d) For the purposes of this section, material changes or deviations mean any change or 25
extraordinary occurrence which creates or causes, or could create or cause, an applicant or 26
provider to be in a hazardous condition or, for a proposed continuing care retirement community 27
or proposed expansion of a continuing care retirement community, to no longer be financially 28
viable. 29
"Part 10. Other Transactions and Changes. 30
"§ 58-64A-230. Purchase, sale, or transfer of ownership interest in the real property of a 31
continuing care retirement community. 32
(a) No permit, certificate, or license issued pursuant to this Article is transferable, and no 33
permit, certificate, or license issued pursuant to this Article has value for sale or ex change as 34
property. 35
(b) A provider or any other person who owns the real property used in the operations of 36
a continuing care retirement community shall obtain approval from the Commissioner before 37
consummating any sale or transfer of any real property use d in the operations of a continuing 38
care retirement community, including a sale-leaseback transaction, or any interest in a continuing 39
care retirement community, other than the sale of an independent living unit to a resident or other 40
transferee. 41
(c) A provider shall obtain approval from the Commissioner before consummating any 42
purchase of real property currently leased and used by the provider in the operations of a 43
continuing care retirement community. Any purchase option to be entered into by the provide r 44
that requires a purchase option deposit shall only be entered into if the deposit is placed in an 45
escrow account or secured in another method acceptable to the Commissioner. 46
(d) A provider shall request approval of any transaction listed in subsection (b ) or (c) of 47
this section by filing a request for approval with the Commissioner, made under oath or 48
affirmation, at least 45 days prior to consummating the transaction. The request for approval 49
required by this subsection shall include all of the following: 50
(1) The identity and description of the persons involved in the transaction. 51
General Assembly Of North Carolina Session 2025
Senate Bill 105-First Edition Page 41
(2) A description of the transaction and the terms of the transaction. 1
(3) A description of the financial impact on the applicant. 2
(4) If applicable, a plan for ensuring performance of existing continuing care and 3
continuing care at home contract obligations. 4
(5) Any other information reasonably required by the Commissioner. 5
(e) The Commissioner shall comply with the review schedule in G.S. 58-64A-70 in 6
response to a request for approval pursuant to this section. 7
(f) The Commissioner shall approve a request for approval if all of the following 8
requirements are met: 9
(1) The request complies with this section. 10
(2) None of the grounds for denial listed in G.S. 58-64A-280 apply to the 11
applicant. 12
(3) The transaction does not jeopardize the financial stability of the applicant or 13
prejudice the interest of residents. 14
(g) A provider shall give written notice to all affected residents and depositors of the 15
proposed transaction within 10 business days after receiving approval from the Commissioner. 16
(h) The Commissioner may revoke or restrict the certificate or license of a provider or 17
take other administrative action pursuant to Part 12 of this Article if a provider violates the 18
provisions of this section. 19
"§ 58-64A-235. Change of control of a provider. 20
(a) No person shall enter into an agreement to merge with, or to otherwise acquire control 21
of, a provider holding a certificate or license under this Article unless the transaction is approved 22
by the Commissioner. To obtain the Commissioner 's approval, the acquiring person shall file a 23
request for approval with the Commissioner. 24
(b) The request for approval required by this section shall be in a form prescribed by the 25
Commissioner, made under o ath or affirmation, and shall contain all of the following 26
information: 27
(1) The name and address of each acquiring person and the following additional 28
information regarding those persons: 29
a. If the person is not an individual, a report of the nature of its business 30
operations during the past five years or for a lesser period as the person 31
and any predecessors have been in existence. 32
b. A description of the business intended to be done by the person and 33
the person's related parties. 34
c. A list of all individuals who are or who have been selected to become 35
directors or executive officers of the person, or who perform or will 36
perform functions appropriate to those positions. 37
d. For each individual listed pursuant to this subdivision, the person 's 38
principal occupation and all offices and positions held during the past 39
five years and any conviction of crimes other than minor traffic 40
violations during the past 10 years. 41
(2) The source, nature, and amount of the consideration used or to be used in 42
effecting t he merger or other acquisition of control; a description of any 43
transaction wherein funds were or are to be obtained for that purpose, 44
including any pledge of the provider 's stock, or the stock of any of its 45
subsidiaries or controlling persons; and the ide ntity of persons providing the 46
consideration. 47
(3) Fully audited financial information as to the earnings and financial condition 48
of each acquiring person for the preceding five fiscal years, or for a lesser 49
period as the acquiring person and any predecesso rs have been in existence, 50
General Assembly Of North Carolina Session 2025
Page 42 Senate Bill 105-First Edition
and similar unaudited information as of a date not earlier than 90 days prior 1
to the filing of the written notice. 2
(4) Any plans or proposals that each acquiring person may have to liquidate the 3
provider, or any continuing care r etirement community operated by the 4
provider in this State, to sell its assets or merge or consolidate it with any 5
person, or to make any other material change in its business or corporate 6
structure or management. 7
(5) A description of the effect, if any, t hat the merger or other acquisition of 8
control will have on the financial condition of the provider. 9
(6) A description of any change in the provision of goods and services to the 10
provider and residents. 11
(7) A description of any agreements made or to be made with residents which will 12
amend any continuing care or continuing care at home contract at the time of 13
the transfer of control. 14
(8) A description of any service or contractual obligation with residents which 15
will change as a result of the change in control. 16
(9) Any additional information as the Commissioner may require as necessary or 17
appropriate for the protection of residents or in the public interest. 18
(c) The Commissioner shall comply with the review schedule in G.S. 58-64A-70 in 19
response to a request for approval pursuant to this section. 20
(d) The Commissioner shall approve a request for approval pursuant to this section if all 21
of the following requirements are met: 22
(1) The request for approval complies with this section. 23
(2) None of the grounds for den ial listed in G.S. 58-64A-280 apply to the 24
applicant. 25
(3) After the change of control, the provider will be able to satisfy the certification 26
or licensure requirements, as applicable, of this Article. 27
(4) The financial condition of any acquiring person will not jeopardize the 28
financial stability of the provider or prejudice the interest of any residents. 29
(5) Any plans or proposals that any acquiring person has to liquidate the provider, 30
or any continuing care retirement community operated by the provider in this 31
State, sell its assets or consolidate or merge it with any person, or to make any 32
other material change in its business or corporate structure or management, 33
are fair and reasonable to residents and in the public interest. 34
(6) The competence, expe rience, and integrity of those persons who would 35
control the operation of the provider are such that the change of control will 36
not harm the interests of residents or of the public. 37
(e) A provider shall give written notice to all affected residents and dep ositors of the 38
proposed merger or other acquisition of control within 10 business days after the acquiring person 39
has received approval from the Commissioner. 40
(f) The Commissioner may revoke or restrict the license or certificate of a provider or 41
take othe r administrative action pursuant to Part 12 of this Article if a provider violates the 42
provisions of this section. 43
"§ 58-64A-240. Third-party management. 44
(a) A provider shall request the approval of the Commissioner before entering into a 45
contract with a third party for the management of a continuing care retirement community. The 46
request for approval required by this section shall include a copy of the proposed management 47
contract, the information required by subdivisions (6) and (7) of G.S. 58 -64A-150(a) regarding 48
the proposed third -party manager, a description of the third party's experience in managing 49
continuing care retirement communities, and the reason for the change in management. 50
General Assembly Of North Carolina Session 2025
Senate Bill 105-First Edition Page 43
(b) The provider shall inform all residents in writing of the request for approval submitted 1
to the Commissioner pursuant to this section within 10 business days after the request for 2
approval is submitted to the Commissioner. 3
(c) The Commissioner shall comply with the review schedule in G.S. 58-64A-70 in 4
response to a request for approval pursuant to this section. 5
(d) The Commissioner may disapprove of the request for approval if the Commissioner 6
determines either of the following: 7
(1) The proposed third -party manager is incompetent or untrustworthy or so 8
lacking in managerial experience as to make the operation of the continuing 9
care retirement community potentially hazardous to residents. 10
(2) The proposed third -party manager is affiliated directly or indirectly through 11
ownership, control, or business relations with any person or persons whose 12
business operations are or have been marked by manipulation of assets or 13
accounts or by bad faith, to the detriment of residents, members, stockholders, 14
investors, creditors, or the public. 15
(e) The provider shall remove any thir d-party manager immediately upon discovery of 16
either of the following: 17
(1) That a manager has been convicted of any felony or pleaded nolo contendere 18
to a felony charge or has been held liable or enjoined in a civil action by final 19
judgment involving fraud , embezzlement, fraudulent conversion, or 20
misappropriation of property. 21
(2) That a manager is now, or was in the past, affiliated directly or indirectly 22
through ownership interest of ten percent (10%) or more in, or control of, any 23
business, corporation, or other entity that has been convicted of any felony or 24
pleaded nolo contendere to a felony charge or has been held liable or enjoined 25
in a civil action by final judgment involving fraud, embezzlement, fraudulent 26
conversion, or misappropriation of property. 27
"Part 11. Operating Reserve. 28
"§ 58-64A-245. Operating reserve requirement. 29
(a) A provider shall maintain after the opening of a continuing care retirement 30
community an operating reserve equal to fifty percent (50%) of the total operating costs of the 31
continuing care retirement community forecasted or projected for the 12-month period following 32
the period covered by the most recent disclosure statement filed with the Department. 33
(b) Once a continuing care retirement community achieves a 12 -month daily a verage 34
independent living unit occupancy rate of ninety percent (90%) or higher, a provider shall only 35
be required to maintain an operating reserve in an amount calculated using the table below, unless 36
otherwise instructed by the Commissioner: 37
12-Month Daily Average Operating Reserve Requirement as a Percentage 38
Independent Living Unit of Total Operating Costs of the Continuing Care 39
Occupancy Rate Retirement Community 40
90% or above..................................................................................................................... 25.00% 41
86% to 89.9% .................................................................................................................... 31.25% 42
83% to 85.9% .................................................................................................................... 37.50% 43
80% to 82.9% .................................................................................................................... 43.75% 44
Below 80% ........................................................................................................................ 50.00% 45
(c) A provider who has a 12-month daily average independent living unit occupancy rate 46
equal to or in excess of ninety -three percent (93%) and has no long -term debt or a debt service 47
coverage ratio in excess of 2.00 as of the provider 's most recent fiscal year -end shall only be 48
required to maintain an operating reserve equal to twelve and one -half percent (12.5%) of total 49
operating costs of the continuing care retirement community, unless otherwise instructed by the 50
Commissioner. 51
General Assembly Of North Carolina Session 2025
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(d) The Commissioner may increase the amount a provider is required to maintain as its 1
operating reserve, not to exceed fifty percent (50%) of total operating costs as calculated in 2
accordance with G.S. 58-64A-250, for a continuing care retirement community operated by the 3
provider or require that a provider immediately place the operating reserve on deposit with the 4
Commissioner if the Commissioner has determined that the provider is in a hazardous condition 5
pursuant to G.S. 58-64A-285. 6
(e) A provider shall notify a ll residents in writing within 10 business days if the 7
Commissioner, pursuant to subsection (d) of this section, increases the amount a provider is 8
required to maintain as its operating reserve for a continuing care retirement community operated 9
by the provider or requires the operating reserve to be placed on deposit with the Commissioner. 10
(f) If the Commissioner requires a provider to place an operating reserve on deposit with 11
the Commissioner, the provider shall at the same time deliver to the Commission er a power of 12
attorney executed by the provider 's president and secretary, or other proper person or persons, 13
authorizing the sale or transfer of said qualifying assets, or any part, for the purpose of paying 14
any of the liabilities of the provider related to the continuing care retirement community for 15
which the operating reserve is maintained. 16
"§ 58-64A-250. Operating reserve calculation. 17
(a) The five -year prospective financial statements as required by 18
G.S. 58-64A-150(a)(37), together with the 12 -month daily average independent living unit 19
occupancy rate of the continuing care retirement community, shall serve as the basis for 20
computing the operating reserve. A provider shall calculate and adjust, if necessary, the required 21
operating reserve on at least a semiannual basis, including the date the operating reserve is 22
certified in accordance with G.S. 58-64A-270. 23
(b) In addition to total operating expenses, total operating costs will include debt service, 24
consisting of principal and interest payments, along with taxes and insurance on any mortgage 25
loan or other long -term financing, but will exclude depreciation, amortized expenses, and 26
extraordinary items as approved by the Commissioner. If the debt service portion is accounted 27
for by way of another reserve account, the debt service portion may be excluded upon satisfactory 28
evidence of the existence and purpose of the other reserve account. 29
(c) A provider shall apply in writing for a determination by the Commissioner in order 30
to exclude extraordinary it ems from total operating costs and shall provide documentation to 31
support the request. The Commissioner shall comply with the review schedule in G.S. 58-64A-70 32
in response to a request for approval pursuant to this subsection. 33
(d) For providers that have v oluntarily and permanently discontinued entering into 34
continuing care contracts, or who operate a continuing care retirement community where not all 35
occupants are under continuing care contracts, the Commissioner may allow a reduced operating 36
reserve if the Commissioner finds that the reduction is consistent with the financial protections 37
imposed by this Article. In making this determination, the Commissioner may consider factors 38
including the financial condition of the provider, the number of outstanding c ontinuing care 39
contracts, the ratio of persons under continuing care contracts to those persons who do not hold 40
a continuing care contract, and the 12 -month daily average independent living unit occupancy 41
rate. 42
(e) A provider who has increased the number o f independent living units available at a 43
continuing care retirement community in excess of twenty percent (20%) shall be allowed to 44
exclude the total number of independent living units in the expansion project for a period of 18 45
months after the independent living units become available for occupancy when computing the 46
operating reserve required by this Part. 47
(f) The Commissioner may allow a different calculation for a provider 's required 48
operating reserve for a continuing care retirement community operate d by the provider if the 49
calculation, in the opinion of the Commissioner, does not diminish the residents ' protections 50
provided for by this Part. 51
General Assembly Of North Carolina Session 2025
Senate Bill 105-First Edition Page 45
"§ 58-64A-255. Qualifying assets. 1
(a) A provider shall fund its operating reserve with any of the following qualifying assets: 2
(1) Cash. 3
(2) Cash equivalents. 4
(3) Investment grade securities. For the purposes of this subdivision, investment 5
grade securities are any of the following: 6
a. Securities issued or directly and fully guaranteed or insured by the 7
government of the United States of America or any of its agencies or 8
instrumentalities. 9
b. Debt securities or debt instruments with a rating of BBB- or higher by 10
Standard & Poor 's or Baa3 or higher by Moody 's, or, if no rating of 11
Standard & Poor's or Moody's then exists, the equivalent of that rating 12
by any other nationally recognized statistical rating organizations 13
maintained by the National Association of Insurance Commissioners. 14
c. Investments in any fund that invests exclusively in investments of the 15
type described in sub -subdivision a. or b. of this subdivision, which 16
fund may also hold immaterial amounts of cash pending investment or 17
distribution. 18
(4) Corporate stock that is traded on a public securities exchange that can be 19
readily valued and liqu idated for cash, including shares in mutual funds and 20
exchange-traded funds that hold portfolios consisting predominantly of these 21
stocks. 22
(5) Other assets considered to be acceptable to the Commissioner on a 23
case-by-case basis. 24
(b) Except as otherwise provided in this subsection, the assets maintained by the provider 25
as an operating reserve for a continuing care retirement community operated by the provider 26
under this Article shall not be subject to any liens, charges, judgments, garnishments, or creditors' 27
claims and shall not be hypothecated, pledged as collateral, or otherwise encumbered in any 28
manner. A provider may encumber assets held as an operating reserve as part of a security pledge 29
of assets or similar collateralization that is part of the provider 's debt financing and is included 30
in the provider's debt indenture security instruments related thereto or other similar instrument. 31
(c) For the purpose of calculating the amount to be maintained by the provider to satisfy 32
its operating reserve requirement, all qualifying assets shall be valued at their current fair market 33
value. 34
"§ 58-64A-260. Surety bond; letter of credit. 35
(a) Alternative Funding Methods. – In lieu of funding the operating reserve with 36
qualifying assets as set forth in G.S. 58-64A-255, a provider may fund all or a portion of the 37
operating reserve required by this Part by filing with the Commissioner a surety bond or letter of 38
credit as set forth in this section. 39
(b) Surety Bond. – A surety bond shall be in a form acceptable to the Commissioner and 40
issued by an insurer authorized by the Commissioner to write surety business in this State. All of 41
the following shall apply to surety bonds issued pursuant to this Article: 42
(1) The surety bond may be exchanged or replaced with another surety bond if (i) 43
the surety bond applies to obligations and liabilities that arose during the 44
period of the original surety bond, (ii) the surety bond meets the requirements 45
of this section, and (iii) 90 days ' advance written notice is provided to the 46
Commissioner. 47
(2) Notice of cancellation or nonrenewal of the surety bond required by this 48
section shall be provided to the provider and the Commissioner in writing at 49
least 45 days before cancellation or nonrenewal. 50
General Assembly Of North Carolina Session 2025
Page 46 Senate Bill 105-First Edition
(3) A surety bond may be canceled by the issuer of the bond with respect to future 1
obligations or liabilities upon proper notice pursuant to this section and 2
without regard to approval or acceptance of the Commissioner. 3
(c) Letter of Credit. – A provider may file a clean, irrevocable, unconditional letter o f 4
credit issued or confirmed by a qualified United States financial institution as defined in 5
G.S. 58-7-26(b) naming the Commissioner as beneficiary. The terms of the letter of credit shall 6
be approved by the Commissioner before issuance and before its ren ewal or modification. The 7
letter of credit shall provide all of the following information: 8
(1) Ninety days' prior written notice to both the provider and the Commissioner 9
of the financial institution's determination not to renew or extend the term of 10
the letter of credit. 11
(2) Unless otherwise arranged by the provider to the satisfaction of the 12
Commissioner, deposit by the financial institution of letter of credit funds in 13
an account designated by the Commissioner no later than 30 days before the 14
expiration of the letter of credit. 15
(3) Deposit by the financial institution of letter of credit funds in an account 16
designated by the Commissioner within five business days following written 17
instructions from the Commissioner that, in the sole judgment of the 18
Commissioner, funding of the operating reserve is required. 19
"§ 58-64A-265. Operating reserve release. 20
(a) An operating reserve shall only be released, in whole or in part, upon the submittal of 21
a detailed request from the provider and approval of that request by the Commissioner. This 22
request shall be submitted in writing for the Commissioner to review at least 10 business days 23
prior to the proposed date of release. 24
(b) In order to receive the approval of the Commissioner, a provider shall explain why a 25
release is necessary and , if applicable, submit a repayment schedule to replenish the operating 26
reserve to the amount required by G.S. 58-64A-245. Within five business days after the date a 27
request is deemed complete, the Commissioner shall provide the provider w ith a written notice 28
of approval or disapproval of the request. The Commissioner may disapprove any request to 29
release the funds if it is determined that the release is not in the best interest of residents. 30
(c) A provider shall give written notice to resi dents of any request made pursuant to 31
subsection (a) of this section at the same time the written request is submitted to the 32
Commissioner. 33
"§ 58-64A-270. Operating reserve certification. 34
At the time a provider files its annual audited financial statement s pursuant to 35
G.S. 58-64A-195, a provider shall file a form acceptable to the Commissioner computing, 36
reporting, and certifying all of the following: 37
(1) The 12 -month daily average independent living unit occupancy rate at the 38
continuing care retirement co mmunity, or a shorter period of time that the 39
continuing care retirement community has been in operation, as of the date of 40
certification. 41
(2) The amount the provider is required to hold as its operating reserve. 42
(3) A description of the qualifying assets or other form of security and , if 43
applicable, their respective values, as defined and valued in accordance with 44
G.S. 58-64A-255, that the provider maintains for its operating reserve. 45
"Part 12. Offenses and Penalties. 46
"§ 58-64A-275. Definition of impairment. 47
As used is this Part, "impaired" means a weakened financial state or condition that may affect 48
a provider's ability to pay its obligations as they come due in the normal course of business. 49
"§ 58-64A-280. Grounds for discretionary refusal, res triction, or revocation of a permit, 50
certificate, or license. 51
General Assembly Of North Carolina Session 2025
Senate Bill 105-First Edition Page 47
(a) The Commissioner may (i) deny an application or any other request for approval or 1
(ii) restrict or revoke any permit, certificate, license, or other authorization issued under this 2
Article if the Commissioner finds that the applicant or provider did any of the following: 3
(1) Willfully violated any provision of this Article or of any rule or order of the 4
Commissioner. 5
(2) Made a material omission, misstatement, or misrepresentation, or commit ted 6
fraud in obtaining a permit, certificate, license, or other authorization. 7
(3) Engaged in any fraudulent or dishonest practices in the conduct of its business. 8
(4) Misappropriated, converted, or improperly withheld any monies. 9
(5) Failed to file an ann ual disclosure statement, annual audited financial 10
statements, or any other materials requested by the Commissioner or 11
otherwise required by this Article. 12
(6) Failed to deliver to prospective residents a disclosure statement as required by 13
this Article. 14
(7) Delivered to prospective residents a disclosure statement that makes a material 15
misstatement or omits a material fact and the provider, at the time of the 16
delivery of the disclosure statement, had actual knowledge of the misstatement 17
or omission. 18
(8) Failed to make a revised disclosure statement available to residents. 19
(9) Made any material misrepresentations to depositors, prospective residents, or 20
residents of a continuing care retirement community operated or to be 21
operated in this State. 22
(10) Failed to maintain the escrow account required under this Article or released 23
a portion of an escrow account required to be maintained under this Article. 24
(11) Failed to deposit entrance fees and deposits into an escrow account as required 25
by this Article. 26
(12) Failed to maintain the operating reserve required under this Article or released 27
a portion of the operating reserve required to be maintained under this Article 28
without Commissioner approval. 29
(13) Violated a restriction of its permit, certificate, or license. 30
(14) After request by the Commissioner for an investigation or examination, 31
refused access to records or information; refused to be investigated or 32
examined or to produce its accounts, records, and files for an investigation or 33
examination; refused to give information with respect to its affairs; or refused 34
to perform any other legal obligations related to an investigation or 35
examination. 36
(15) Failed to fulfill obligations under continuing care and continuing care at home 37
contracts. 38
(16) Violated the provisions of G.S. 58-64A-230, 58-64A-235, or 58-64A-240. 39
(17) Failed to comply with the terms of a cease and desist order. 40
(18) Has been determined by the Commissioner to be in a hazardous condition. 41
(b) Findings of fact in support of a denial, restriction, or revocation shall be accompanied 42
by an explicit statement of the Commissioner's understanding of the underlying facts supporting 43
the findings. 44
(c) If the Commissioner has good cause to believe that a provider has committed a 45
violation for which revocati on could be ordered, the Commissioner may first issue a cease and 46
desist order. If the cease and desist order is not or cannot be effective in remedying the violation, 47
the Commissioner may, after notice and hearing, order that a permit, certificate, or lic ense be 48
revoked. That revocation order may be appealed to the Superior Court of Wake County in the 49
manner provided by G.S. 58-63-35. The provider shall accept no new deposits or entrance fees 50
while the revocation order is under appeal. 51
General Assembly Of North Carolina Session 2025
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(d) If the Commissioner issues a cease and desist order or restricts or revokes a provider's 1
permit, certificate, or license, the provider shall notify all residents and depositors of the cease 2
and desist order, restriction, or revocation within five business days. 3
(e) The Co mmissioner may, upon finding of changed circumstances, remove a 4
restriction. 5
(f) The revocation by the Commissioner of a certificate or license shall not release the 6
provider from obligations assumed through continuing care and continuing care at home 7
contracts. 8
(g) Within 20 business days after receiving a notice of revocation of a license, a provider 9
shall provide to the Commissioner and all residents a written plan detailing specifically how the 10
provider intends to continue to meet its continuing care obligations. 11
(h) A provider who has their permanent license revoked shall continue to maintain an 12
operating reserve and to file its annual audited financial statements, annual disclosure statement, 13
and pay annual fees to the Commissioner as required under this Article as if the permanent license 14
had continued in full force, but the provider shall not issue any new continuing care or continuing 15
care at home contracts. 16
(i) A provider who has a permit, certificate, or license revoked shall provide written 17
notice within five business days to all depositors, shall reimburse all deposits collected, and shall 18
provide documentation to the Commissioner verifying that all deposits have been returned to 19
depositors. 20
"§ 58-64A-285. Hazardous condition. 21
The Commissioner may consider any of the following standards to determine whether a 22
provider is in a hazardous condition: 23
(1) Whether the provider is impaired or insolvent. 24
(2) Adverse findings reported in examinat ion reports, audit financial statements, 25
and actuarial opinions, reports, or summaries. 26
(3) Whether the provider has failed to establish, maintain, or has substantially 27
depleted the operating reserve required by this Article. 28
(4) Whether the provider is contractually past due on entrance fee refunds. 29
(5) The age and collectability of receivables. 30
(6) Whether a related party is impaired, insolvent, bankrupt, or threatened with 31
insolvency or bankruptcy, or delinquent in payment of its monetary or any 32
other obligations and which in the opinion of the Commissioner may affect 33
the solvency of the provider. 34
(7) Whether the provider, or any obligated group that the provider is a part of, is 35
not in compliance with any covenant contained in any debt agreement. 36
(8) Whether the provider is aware of any existing circumstances which would 37
hinder or cause the provider, or any member of an obligated group that the 38
applicant or provider is a part of, to not be able to perform on any debt 39
agreement. 40
(9) Contingent liabilities, pledges, or guaranties that either individually or 41
collectively involve a total amount that in the Commissioner 's opinion may 42
affect a provider's solvency. 43
(10) Whether the management of a provider, including officers, directors, or any 44
other person who directly or indirectly controls the operations of an applicant, 45
provider, or continuing care retirement community, fails to possess and 46
demonstrate the competence, experience, or integrity considered by the 47
Commissioner to be necessary to serve the provide r or continuing care 48
retirement community in that position. 49
(11) Whether the management of a provider has failed to respond to the 50
Commissioner's inquiries about the condition of the applicant or provider or 51
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has furnished false and misleading information i n response to an inquiry by 1
the Commissioner. 2
(12) Whether the applicant or provider has failed to meet financial, disclosure 3
statement, or other filing requirements in the absence of a reason satisfactory 4
to the Commissioner. 5
(13) Whether the management of an applicant or provider has filed any false or 6
misleading financial statement, has released a false or misleading financial 7
statement to a lending institution or to the general public, or has made a false 8
or misleading entry or omitted an entry of mate rial amount in the applicant 's 9
or provider's books. 10
(14) Whether the applicant or provider has experienced or will experience in the 11
foreseeable future cash flow or liquidity problems. 12
(15) Any other finding determined by the Commissioner to be hazardous t o the 13
applicant's or provider's depositors, residents, creditors, or the general public. 14
"§ 58-64A-290. Corrective action plan. 15
(a) If the Commissioner has determined that a provider is in a hazardous condition, the 16
Commissioner may, in lieu of taking act ion under G.S. 58-64A-280 or G.S. 58-64A-335, and 17
after notice and opportunity for hearing, issue an order requiring a provider to (i) submit a 18
corrective action plan within 45 days and (ii) notify all residents and depositors within five 19
business days of the Commissioner's order. The corrective action plan shall include both of the 20
following: 21
(1) Proposals of corrective actions the provider intends to take which would be 22
expected to result in the elimination of the hazardous condition. 23
(2) A date when the provider anticipates it will rectify the problems and 24
deficiencies identified by the Commissioner. 25
(b) Within 45 days after the submittal of a corrective action plan, the Commissioner shall 26
notify the provider whether the corrective action plan shall be implemented or is, in the judgment 27
of the Commissioner, unsatisfactory. If the Commissioner determines the corrective action plan 28
is unsatisfactory, the notification to the provider shall set forth the reasons for the determination 29
and may set forth proposed revisions that will render the corrective action plan satisfactory in the 30
judgment of the Commissioner. After receiving notification from the Commissioner, the provider 31
shall prepare a revised corrective action plan, if applicable, which may incorporate by reference 32
any revisions proposed by the Commissioner and shall submit the revised corrective action plan 33
to the Commissioner within 30 days after notification from the Commissioner. If the corrective 34
action plan is approved, the provider shall immediatel y implement the corrective action plan, 35
distribute a copy of the plan to all residents and depositors, and begin reporting to the 36
Commissioner on the implementation and progress of the corrective action plan in accordance 37
with a schedule and in a format es tablished by the Commissioner. Each report shall also be 38
distributed to all residents and depositors at the time the report is submitted to the Commissioner. 39
(c) If the corrective action plan is disapproved, or if a corrective action plan is not 40
submitted, the Commissioner may engage consultants to develop a corrective action plan. After 41
the corrective action plan is developed, the Commissioner shall direct the provider to implement 42
the corrective action plan and to distribute a copy of the corrective actio n plan to all residents 43
and depositors. Expenses incurred by the Commissioner to engage consultants shall be paid by 44
the provider. 45
(d) This section shall not be construed to delay or prevent the Commissioner from taking 46
any regulatory measures deemed necessary regarding the provider. 47
(e) The provider shall distribute its approved corrective action plan and its most recent 48
report to the Commissioner to a prospective resident at the time the provider distributes its current 49
disclosure statement pursuant to G.S. 58-64A-155. Subsections (b) and (c) of G.S. 58-64A-155 50
General Assembly Of North Carolina Session 2025
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shall apply to the corrective action plan and the most recent report to the Commissioner required 1
to be distributed pursuant to this subsection. 2
"§ 58-64A-295. Investigations and subpoenas. 3
(a) The Commissioner may make public or private investigations within or outside of this 4
State as necessary to (i) determine whether any person has violated or is about to violate any 5
provision of this Article, (ii) aid in the enforcement of this Article, or (iii ) verify statements 6
contained in any disclosure statement or other filing filed or delivered under this Article. 7
(b) For the purpose of any investigation or proceeding under this Article, the 8
Commissioner may require or permit any person to file a statemen t in writing, under oath or 9
otherwise, as to any of the facts and circumstances concerning the matter to be investigated. 10
(c) For the purpose of any investigation or proceeding under this Article, the 11
Commissioner or the Commissioner 's designee may exercis e all powers granted to the 12
Commissioner with respect to insurance companies. 13
"§ 58-64A-300. Civil liability. 14
(a) A provider who enters into a binding reservation agreement, continuing care contract, 15
or continuing care at home contract under this Article without having first delivered a disclosure 16
statement meeting the requirements of Part 5 of this Article to the person with whom the binding 17
reservation agreement, continuing care contract, or continuing care at home contract was entered 18
into, or enters into a binding reservation agreement, continuing care contract, or continuing care 19
at home contract with a person who has relied on a disclosure statement that materially 20
misrepresents or omits to state a material fact required to be stated therein or necess ary in order 21
to make the statements made therein, in light of the circumstances under which they are made, 22
not misleading, shall be liable to that person for actual damages and repayment of all fees paid 23
to the provider violating this Article, less the costs of care, services, and housing provided to the 24
resident by or on whose behalf the binding reservation agreement, continuing care contract, or 25
continuing care at home contract was entered into prior to discovery of the violation, 26
misstatement, or omission or the time the violation, misstatement, or omission should reasonably 27
have been discovered, together with interest thereon at the legal rate for judgments, and court 28
costs and reasonable attorneys' fees. 29
(b) Liability under this section exists regardles s of whether the provider had actual 30
knowledge of the misstatement or omission. 31
(c) A person may not file or maintain an action under this section if the person, before 32
filing the action, received a written offer of a refund of all amounts paid to the provider, together 33
with interest at the rate established monthly by the Commissioner of Banks pursuant to 34
G.S. 24-1.1(c), less the cost of care, services, and housing provided prior to receipt of the offer, 35
and if the offer recited the provisions of this section and the recipient of the offer failed to accept 36
it within 30 days of actual receipt. 37
(d) An action may not be maintained to enforce a liability created under this Article unless 38
brought before the expiration of three years after the alleged violation. 39
"§ 58-64A-305. Criminal penalties. 40
(a) Any person who willfully and knowingly violates any provision of this Article is 41
guilty of a Class 1 misdemeanor. The Commissioner may refer any available evidence concerning 42
a violation of this Article, or of any rule adopted or order issued pursuant to this Article, to the 43
Attorney General or a district attorney. The Attorney General or a district attorney may institute 44
the appropriate criminal proceedings under this Article, with or without evidentiary referral from 45
the Commissioner. Nothing in this Article limits the power of the State to punish any person for 46
any conduct that constitutes a crime under any other statute. 47
(b) Any action brought against any person shall not abate by reason of a sale or other 48
transfer of ownership of the continuing care retirement community except with the express 49
written consent of the Commissioner. 50
"§ 58-64A-310. Forfeiture. 51
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(a) A permit, certificate, license, or other approval issued by the Commissioner pursuant 1
to this Article s hall be forfeited, after notice and opportunity for hearing, when any one of the 2
following occurs: 3
(1) The provider terminates marketing a proposed continuing care retirement 4
community. 5
(2) The provider surrenders to the Commissioner its permit, certificate, or license. 6
(3) The provider sells or otherwise transfers all or part of a continuing care 7
retirement community without the Commissioner 's approval in accordance 8
with G.S. 58-64A-230. 9
(4) A change occurs in the control of the provider without the Commissioner's 10
approval in accordance with G.S. 58-64A-235. 11
(5) The provider merges with another person without the Commissioner 's 12
approval in accordance with G.S. 58-64A-235. 13
(6) The provider moves the continuing care retirement community from one 14
location to another without the Commissioner's prior approval. 15
(7) The provider abandons the continuing care retirement community or its 16
obligations under continuing care and continuing care at home contracts. 17
(8) The provider is evicted from the structures that make up the continuing care 18
retirement community. 19
(9) The provider closes a continuing care retirement community. 20
(b) The provider shall notify all residents and depositors within five business days after 21
a forfeiture of a permit, certificate, or license. 22
"§ 58-64A-315. Remedies available in cases of unlawful contracting. 23
(a) If the Commissioner determines that a provider is or has been violating the provisions 24
of this Article, the Commissioner may, after notice and opportunity for hearing, order the 25
provider to cease entering into binding reservation agreements, continuing care contracts, and 26
continuing care at home contracts and make a rescission offer to any resident or depositor who 27
entered into a binding reservation agreement, continuing care contract, or continuing care at 28
home contract while the provider was violating the provisions of this Article in accordance with 29
the provisions of this section. 30
(b) After the Commissioner issues an order pursuant to subsection (a) of this section, 31
every binding res ervation agreement, continuing care contract, or continuing care at home 32
contract entered into in violation of this Article may be rescinded at the election of the resident 33
or depositor without penalty. 34
(c) No resident or depositor shall have the benefit of this section who, within 30 days of 35
receipt, has refused or failed to accept an offer made in writing by the provider to rescind the 36
binding reservation agreement, continuing care contract, or continuing care at home contract in 37
question and to refund the full amount paid by the resident or depositor with interest at the rate 38
established monthly by the Commissioner of Banks pursuant to G.S. 24-1.1(c) on the full amount 39
paid for the binding reservation agreement, continuing care contract, or continuing care at home 40
contract for the period from the date of payment by the depositor or resident to the date of 41
repayment, less the cost of care, services, and housing provided, if applicable, and the amount of 42
any costs specifically incurred by the provider at the request of the resident or depositor and set 43
forth in writing, signed by both parties to the binding reservation agreement, continuing care 44
contract, or continuing care at home contract. 45
"§ 58-64A-325. Nonexclusive remedies. 46
The civil, criminal, and admi nistrative remedies available to the Commissioner pursuant to 47
this Article are not exclusive and may be sought and employed by the Commissioner, in any 48
combination, to enforce this Article. 49
"§ 58 -64A-330. Soliciting or accepting new agreements or contract s by impaired or 50
insolvent providers. 51
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Regardless of whether delinquency proceedings as to a provider have been or are to be 1
initiated, a provider may not actively solicit, approve the solicitation of, or enter into new binding 2
reservation agreements, conti nuing care contracts, or continuing care at home contracts in this 3
State after the provider knew, or reasonably should have known, that the provider was impaired 4
or insolvent except with the written permission of the Commissioner. The Commissioner shall 5
approve or disapprove the continued marketing of new binding reservation agreements, 6
continuing care contracts, and continuing care at home contracts within 15 days after receiving a 7
request from a provider. If the provider has declared bankruptcy, the bankruptcy court or trustee 8
appointed by the court has jurisdiction over those matters. 9
"Part 13. Delinquency Proceedings. 10
"§ 58-64A-335. Supervision, rehabilitation, and liquidation. 11
(a) The Commissioner may commence a supervision proceeding pursuant to Article 30 12
of this Chapter or may apply to the Superior Court of Wake County or to the federal bankruptcy 13
court that may have previously taken jurisdiction over the provider or continuing care retirement 14
community for an order directing the Commissioner or authorizing the Commissioner to 15
rehabilitate or liquidate a provider or continuing care retirement community in accordance with 16
Article 30 of this Chapter, if the Commissioner determines, after notice and an opportunity for 17
hearing, that any of the following apply: 18
(1) A portion of an escrow account or operating reserve required to be maintained 19
under this Article has been or is proposed to be released in violation of this 20
Article. 21
(2) A provider has been or will be unable to fully perform its obligations pursuant 22
to continuing care and continuing care at home contracts, or to meet 23
prospective financial data previously filed by the provider. 24
(3) A provider has failed to maintain the escrow a ccount required under this 25
Article. 26
(4) A provider is in a hazardous condition. 27
(5) A provider is bankrupt or insolvent, or in imminent danger of becoming 28
bankrupt or insolvent. 29
(b) If the Commissioner commences a supervision proceeding, the provider shall notify 30
all residents and depositors of the proceeding within five business days. 31
(c) If an order is issued directing or authorizing the Commissioner to rehabilitate or to 32
liquidate a provider or continuing care retirement community, the Commissioner shall notify all 33
affected residents and depositors of the rehabilitation or liquidation order within five business 34
days or as otherwise directed by the Court. 35
(d) If, at any time, the Court finds, upon petition of the Commissioner, a provider, or on 36
its own motion, that the objectives of an order to rehabilitate a provider have been accomplished 37
and that the continuing care retirement community or communities owned by, or operated by, 38
the provider can be returned to the provider 's management without further jeop ardy to the 39
residents or depositors of the continuing care retirement community or communities, the Court 40
may, upon a full report and accounting of the conduct of the provider 's affairs during the 41
rehabilitation and of the provider 's current financial cond ition, terminate the rehabilitation and, 42
by order, return the continuing care retirement community or communities owned by, or operated 43
by, the provider, along with the assets and affairs of the provider, to the provider's management. 44
(e) When applying for an order to rehabilitate or liquidate a provider, the Commissioner 45
shall give due consideration in the application to the manner in which the welfare of persons who 46
have contracted with the provider for continuing care may be best served. 47
(f) An order for rehabilitation shall be refused or vacated if the provider posts a bond, by 48
a recognized surety authorized to do business in this State and executed in favor of the 49
Commissioner on behalf of persons who may be found entitled to a refund of entrance fees a nd 50
deposits from the provider or other damages in the event the provider is unable to fulfill its 51
General Assembly Of North Carolina Session 2025
Senate Bill 105-First Edition Page 53
contracts to provide continuing care, in an amount determined by the Court to be equal to the 1
reserve funding that would otherwise need to be available to fulfill the provider's obligations. 2
(g) G.S. 58-30-12 shall not apply to providers under this Article. 3
"§ 58-64A-340. Receiverships; exception for long-term care facility beds. 4
When the Commissioner has been appointed as a receiver under Article 30 of this C hapter 5
for a provider or a continuing care retirement community subject to this Article, the Department 6
of Health and Human Services may, notwithstanding any other provision of law, accept and 7
approve the addition of adult care home beds or nursing beds fo r a continuing care retirement 8
community owned by, or operated by, the provider, if it appears to the Court, upon petition of 9
the Commissioner or the provider, or on the Court's own motion, that (i) the best interests of the 10
provider or (ii) the welfare of persons who have previously contracted with the provider or may 11
contract with the provider may be best served by the addition of adult care home beds or nursing 12
beds. 13
"§ 58-64A-345. Contracts as preferred claims in liquidation. 14
(a) In the event of liquidation of a provider, all continuing care and continuing care at 15
home contracts executed by the provider shall be deemed preferred claims against all assets 16
owned by the provider. 17
(b) Notwithstanding subsection (a) of this section, the claims of all c ontinuing care and 18
continuing care at home contracts shall be subordinate to the liquidator 's cost of administration 19
or any secured claim. 20
"Part 14. Residents' Rights to Organization and Semiannual Meetings. 21
"§ 58-64A-350. Definition of residents' council. 22
As used is this Part, "residents' council" means a group duly elected by residents at a 23
continuing care retirement community to advocate for residents ' rights and to serve as a liaison 24
between residents and the provider with respect to resident welfare and interests. 25
"§ 58-64A-355. Right to organization. 26
A resident living in a continuing care retirement community operated by a provider licensed 27
under this Article has the right of self -organization, the right to be represented by an individual 28
of the resident's own choosing, and the right to engage in concerted activities to keep informed 29
on the operation of the provider and the continuing care retirement community in which the 30
resident resides or for other mutual aid or protection. The right to organi ze includes the right to 31
establish a residents' council. 32
"§ 58-64A-360. Semiannual meetings. 33
(a) The board of directors or other governing body of a provider or its designated 34
representative shall hold in -person semiannual meetings with the residents of e ach continuing 35
care retirement community operated by the provider in this State for free discussions of subjects, 36
including, but not limited to, income, expenditures, financial trends and problems, and proposed 37
changes in policies, programs, and services a s they apply to the provider, the continuing care 38
retirement community, and the continuing care retirement community 's residents. For the 39
purposes of this section, a semiannual meeting shall be a single meeting that is open to all 40
residents and not a serie s of meetings with individual residents. Nothing in this section shall 41
prevent a provider from making a semiannual meeting available via electronic means to residents 42
of the continuing care retirement community who are unable to attend in person. 43
(b) At least one independent member of the board of directors or other governing body 44
of the provider shall attend the semiannual meetings in person. A provider may apply to the 45
Commissioner for a waiver from the requirement of this subsection based on unique 46
circumstances. 47
(c) Residents shall be entitled to at least seven days' advance notice of each meeting under 48
subsection (a) of this section. The agenda and any materials that are distributed at the meetings 49
shall remain available upon request to residents for at least 60 days after each semiannual 50
meeting. 51
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(d) Whenever a state of emergency or disaster has been proclaimed in this State or for an 1
area within this State under G.S. 166A-19.20 or G.S. 166A-19.21, or whenever the President of 2
the United States has issu ed a major disaster declaration for the State or for an area within the 3
State under the Stafford Act, 42 U.S.C. § 5121, et seq., that directly affects the continuing care 4
retirement community, semiannual meetings required under this section may be held by 5
electronic means, including any of the following: 6
(1) Telephone. 7
(2) Video conference. 8
(3) Video broadcast. 9
(e) If a semiannual meeting is held under subsection (d) of this section, notice of the 10
method residents may use to attend the meeting shall be published with the notice of the meeting. 11
The meeting shall be recorded in the format in which it is conducted . Acceptable recording 12
formats include, but are not limited to, all of the following: 13
(1) A sound-only recording. 14
(2) A video recording with sound and picture. 15
(3) A digital or analog broadcast capable of being recorded. 16
(f) Recordings made pursuant to subsection (e) of this section shall remain available to 17
residents for at least 60 days after being made available to residents. 18
(g) A provider shall report in the disclosure statement required under G.S. 58-64A-150 19
the dates on which the semiannual meetings were held during the provider's previous fiscal year. 20
"Part 15. Miscellaneous Provisions. 21
"§ 58-64A-365. Waiver of statutory protection. 22
No act, agreement, or statement of any resident, or of an individual purchasing continuing 23
care for a resident under any continuing care or continuing care at home contract shall constitute 24
a valid waiver of any provision of this Article intended for the benefit or protection of the resident 25
or the individual purchasing continuing care for the resident. 26
"§ 58-64A-370. Continuing Care Advisory Committee. 27
(a) There shall be a 12-member Continuing Care Advisory Committee appointed by the 28
Commissioner. The Committee shall be comprised of providers, residents, and professionals 29
involved in the continuing care retirement community industry. At a minimum, the Committee 30
shall include at least two representatives of, and nominated by, the North Carolina Continuing 31
Care Residents Association and two representatives of, and nominated by, LeadingAge North 32
Carolina. 33
(b) The Committee shall meet all of the following requirements: 34
(1) Meet at least twice per year. 35
(2) Hold other meetings at times and places as the Committee chair may direct. 36
(3) Act in an advisory capacity to the Commissioner on matters pertaining to the 37
operation and regulation of continuing care retirement communities and 38
continuing care at home programs. 39
(4) Report to the Commissioner on deve lopments in the continuing care 40
retirement community industry, including continuing care at home and similar 41
programs, and problems or concerns of providers and residents. 42
(5) Recommend changes in relevant statutes and rules. 43
(c) The term of each Committee member shall be three years, but each Committee 44
member shall serve until a successor has been appointed. Committee members may serve two 45
consecutive terms. Any appointment to fill a vacancy on the Committee created by resignation, 46
dismissal, death, or disability of a member shall be for the remainder of the unexpired term. 47
(d) Committee members shall serve without pay but shall be reimbursed for travel 48
expenses by the Department at the rates set out in G.S. 138-6. 49
"§ 58-64A-375. Other licensing or regulation. 50
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(a) Nothing in this Article affects the authority of the Department of Health and Human 1
Services or any successor agency otherwise provided by law to license or regulate any long-term 2
care facility. 3
(b) Continuing care retirement communities and providers licensed under this Article that 4
are also subject to the provisions of the North Carolina Condominium Act under Chapter 47C of 5
the General Statutes shall not be subject to the provisions of Chapter 39A of the General Statutes, 6
provided that the continuing care retirement community's declaration of condominium does not 7
require the payment of any fee or charge not otherwise provided for in a resident 's continuing 8
care contract, or other separate contract for the provisions of membership or services. 9
"§ 58-64A-380. Examination. 10
(a) The Commissioner or the Commissioner 's designee may, in the Commissioner 's 11
discretion, visit a provider offering continuing care in this State to examine its books and records. 12
Expenses incurred by the Commissioner in cond ucting examinations under this section shall be 13
paid by the provider examined. 14
(b) The provisions of G.S. 58-2-131, 58-2-132, 58-2-133, 58-2-134, 58-2-155, 58-2-180, 15
58-2-185, and 58-6-5 apply to this Article and are hereby incorporated by reference. 16
(c) If a provider relies on a contractual or financial relationship with another person in 17
order to meet the financial requirements of this Article, the Commissioner or the Commissioner's 18
designee may examine the person that has a contractual or financial relationship with the provider 19
to the extent necessary to ascertain the financial condition of the provider. 20
(d) A provider shall make a copy of the examination report issued by the Commissioner 21
available for inspection by all residents within 10 business days after issuance." 22
SECTION 3. This act becomes effective December 1, 2025, and applies to (i) 23
offenses committed on or after that date and (ii) contracts issued, renewed, or amended on or 24
after that date. 25