CONTINUING CARE RETIREMENT COMMUNITIES ACT.-AB

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View NCGA Bill Details2023-2024 Session
Senate Bill 145 (Public) Filed Wednesday, February 22, 2023
AN ACT TO ENACT THE CONTINUING CARE RETIREMENT COMMUNITIES ACT, AS RECOMMENDED BY THE DEPARTMENT OF INSURANCE.
Intro. by Johnson.

Status: Ref To Com On Rules, Calendar, and Operations of the House (House action) (Jun 28 2023)

SOG comments (1):

S 145

Bill Summaries:

  • Summary date: Jun 20 2023 - View Summary

    Senate committee substitute to the 2nd edition makes the following changes.

    Part 13.

    Amends GS 58-64A-370 by amending the membership of the Continuing Care Advisory Committee as follows. Instead of requiring all 12 members to be appointed by the Commissioner, divides the appointments between the Commissioner and the NCGA and updates membership qualifications as follows. Requires six members to be appointed by the Commissioner as follows: two residents of continuing care retirement communities, one owner of a continuing care retirement community, one provider of continuing care at a continuing care retirement community or one provider of a continuing care at home program, one person who can be classified as a representative of residents of continuing care retirement communities, and one person who can be classified as a representative of continuing care retirement communities. Requires three members to be appointed by the President Pro Tempore of the Senate as follows: one person who can be classified as a representative of residents of continuing care retirement communities, one person who can be classified as a representative of continuing care retirement communities, and one person who is a certified public accountant licensed to practice public accountancy in North Carolina. Requires three members to be appointed by the House of Representatives as follows: one person who can be classified as a representative of residents of continuing care retirement communities, one person who can be classified as a representative of continuing care retirement communities, and one person who is a certified public accountant licensed to practice public accountancy in North Carolina. No longer requires the inclusion of any individuals representing and nominated by the North Carolina Continuing Care Residents Association or by LeadingAge North Carolina. Makes conforming changes to the filling of vacancies. Adds the requirement that any appointment to fill a vacancy on the Committee that is due to resignation, dismissal, death, or disability must be for the remainder of the unexpired term and filled by the appointing authority.


  • Bill S 145
    Summary date: Jun 6 2023 - View Summary

    Senate committee substitute to the 1st edition makes the following changes.

    Part 1.

    Amends GS 58-64A-5 (new Article 64A, Continuing Care Retirement Communities, definitions provisions) to remove provision stating that definitions therein apply unless context requires otherwise. Deletes the following defined terms: assisted living care, depositor, expansion, generally accepted accounting principles, immediately accessible site, life plan community, living unit days available, lodging, nursing care, occupancy rates, processing fee, renovation, and restriction. Enacts new definition, continuing care at home (a program offered by a provider holding a permanent license under the Article that provides continuing care to an individual who is not yet receiving housing, including programs that offer an individual an opportunity to move to an independent living unit at a future date, if desired, according to the provider's established priority and admissions policies at the continuing care retirement community sponsoring the continuing care at home program). Incorporates the statutory definitions of assisted living care (GS 131D-2.1) and nursing care (GS 131E-176), into definition of continuing care. Replaces prior definition of continuing care retirement community so that it now means a retirement community consisting of one or more structures where a provider renders continuing care to residents. A distinct phase of development approved by the Commissioner may be considered to be the continuing care retirement community when a project is being developed in successive distinct phases over a period of time. Narrows scope of entrance fee to exclude consideration that is just promised to be made by the individual entering into the specified contracts. Removes specific reference to bank from what can be considered a person under definition of escrow agent. Clarifies that for purposes of the defined term occupancy rate, the term living unit days available means the maximum number of living unit days that would have been provided if all available living units were filled during the given time period. The total shall equal the sum of all living units, minus any living units that are unavailable for occupancy, on each day for the given time period. For purposes of this definition, defines "occupied living unit days" as the sum of each daily living unit census at the continuing care retirement community for a given time period, excluding any second person occupants. Requires the total to equal the sum of each daily census for the given time period.

    Makes conforming changes throughout the Article to refer to newly defined term continuing care at home instead of continuing care without lodging. Makes technical changes.

    Amends GS 58-64A-25 (leasing real property for a continuing care retirement community) to refer to applicants in addition to provider.

    Amends GS 58-64A-35, which permits the Commissioner to waive or modify any provisions of new Article 64A to remove Commissioner’s authority to do so if there is a sound actuarial, accounting, business principles, or other reasonable reason that does not diminish the Article’s protections. Removes language that prohibited any waiver or modification that results in a greater regulator burden, unless it was agreed to in writing by the applicant or provider.

    Removes statements filed with the Commissioner regarding any significant disagreements with a former manager from the confidentiality provisions of GS 58-64A-40. Makes clarifying change.

    Part 2.

    Enacts new GS 58-64A-67, setting forth a general review schedule in response to the following applications: (1)permit to accept deposits, (2) a start-up certificate, (3) a preliminary certificate, (4) a permanent license, (5) an expansion, (6) a continuing care at home license, (7) an  expansion notification, and (8) a request for approval pursuant to GS 58-64A-215, GS 58-64A-220, or GS 58-64A-240.

    Makes conforming change to GS 58-64A-50 to now require that the Commissioner comply with the review schedule set forth in new GS 58-64A-67 (discussed above) when responding to an application for a permit to accept deposits. Makes other clarifying changes.

    Amends GS 58-64A-55 (start-up certificates) as follows. Deletes provisions requiring proof of authority for person signing on behalf of an applicant under penalty of perjury if authority is not apparent as well as language specifying means of such proof. Changes requirements for the market study that is required to be submitted as part of the application to no longer require it be acceptable to the Commissioner. Allows Commissioner to require (was, reasonably require) the person applying for a start-up certificate to submit any other data, financial statements, and pertinent information to assist in its determination. Makes conforming change to now require that the Commissioner comply with the review schedule set forth in new GS 58-64A-67 (discussed above).   Changes one of the five listed requirements for approval of a start-up application to now require that the market study and the five-year prospective financial statements included in the applicant’s disclosure statement demonstrate that a market for the proposed continuing care retirement community appears to exist and the continuing care retirement community appears to be financially viable. (Prior version had no reference to market study or financial statements.) Requires the applicant and its governing body, officers, and management to be of good moral character (was, demonstrate integrity) in addition to other listed attributes. 

    Amends GS 58-64A-60 (preliminary certificates) as follows. Makes organizational, technical, and clarifying changes. Changes the standard governing the feasibility study to have it project (was, reasonably project) the market and financial viability of the proposed continuing care retirement community.  Makes conforming change to now require that the Commissioner comply with the review schedule set forth in new GS 58-64A-67 (discussed above). Changes provisions governing required actuarial study/projects to specify that the projections must meet metrics determined by the Commissioner (prior version had no reference to determination of metrics by Commissioner).

    Amends the statement requirement for a permanent license (GS 58-64A-65) by making technical and conforming changes. Removes discretion for the Commissioner to permit lesser amounts of signed binding reservation agreements or continuing care contracts under the amounts specified in GS 58-64-65. Makes conforming change to now require that the Commissioner comply with the review schedule set forth in new GS 58-64A-67 (discussed above). Changes the explanation requirements accompanying a provisional license so that the Commission must explain the conditions the applicant (was, provider) must satisfy to qualify for a permanent license.  Makes clarifying, technical, and organizational changes.

    Changes references from person to provider in GS 58-64A-70 (expiration of a permit to accept deposits and start-up certificates).

    Makes clarifying changes to when the applicant must submit a request of review of the Commissioner’s denial under GS 58-64A-74 (pertaining to denials of applications, notifications, or other requests for approval).

    Part 3.

    Makes conforming change to GS 58-64A-75 (exemption notifications) to now require that the Commissioner comply with the review schedule set forth in new GS 58-64A-67 (discussed above). Makes clarifying and technical changes.

    Changes references from provider to applicant throughout GS 58-64A-80 (expansion applications). Changes the standard governing the feasibility study to have it project (was, reasonably project) the market and financial viability of the proposed expansion. Makes conforming change to now require that the Commissioner comply with the review schedule set forth in new GS 58-64A-67 (discussed above). Makes clarifying changes.

    Part 4.

    Changes one of the 12 provisions required by GS 58-64A-120 (escrow agreements) to be included the written escrow agreement between the provider and escrow agent so that it must specify that funds deposited shall (was, may) not be subject to any liens or charges by the escrow agent.

    Makes technical change to GS 58-64A-130 (entrance fee and deposit delivery to the escrow agent).

    Makes organizational changes to GS 58-64A-140 (earnings from funds held in escrow).

    Amends GS 58-64A-135(b) (investment of funds in escrow) to require that any investment not diminish the funds held in escrow below the amounts required by the Article (was, investments “may” not diminish the funds).

    Amends the delayed refund provisions of GS 58-64A-150 (refunds of escrowed entrance fees and deposits) to allow a provider or an escrow agent (was, just escrow agent) to demonstrate good cause for an extension of a delayed refund beyond one year. Makes organizational changes.

    Amends GS 58-64A-155 (release of escrowed entrance fees and deposits) as follows. Changes one of the three required certifications for release of the first 25% of the each escrowed entrance fee and deposit to now make the provider demonstrate that they have received a commitment for any permanent mortgage loan or other long-term financing of the proposed continuing care retirement community or expansion, and more than 70% of any conditions of the commitment prior to disbursement of funds thereunder have been satisfied. (Prior version did not have 70% requirement.)   Makes clarifying changes.

    Part 5.

    Makes clarifying and technical changes to GS 58-64A-160 (pertaining to disclosure statements).

    Changes reference from prospective resident to a person in GS 58-64A-165 when noting who must sign an acknowledgement of receipt of the specified disclosure statement. Makes a clarifying change.

    Part 6.

    Amends GS 58-64A-185 by requiring that a binding reservation agreement include a provision that the depositor (was, person) entering into the agreement may rescind the agreement within 30 days of the specified occurrences.

    Amends GS 58-64A-190 by requiring that a continuing care contract include a provision that the resident (was, person) contracting with the provider may rescind the contract within 30 days of the specified occurrences.

    Part 7.

    Amends GS 58-64A-195, concerning applications for a continuing care at home license, as follows. Amends the items that must be included in an application to include a market study prepared by a person experienced in the preparation of market studies for continuing care at home or similar programs that demonstrates sufficient interest in a continuing care at home program (was, experienced in the preparation of market studies for continuing care without lodging or similar programs, and acceptable to the Commissioner, that demonstrates sufficient interest in a continuing care without lodging program). Make a conforming change to require compliance with the review schedule in GS 58-64A-67 in responding to an application. Amends the criteria that must be met for an application to be approved by making clarifying changes and to specify that the sufficient consumer interest in the proposed continuing care at home program must be as evidenced by the market study; also specifies that the Commissioner must determine whether the proposed program will have a detrimental impact on the overall operation of the applicant and continuing care retirement community. Makes additional clarifying changes.

    Amends GS 58-64A-200 by requiring a continuing at home contract include a provision that the resident (was, person) contracting with the provider may rescind the contract within 30 days of the specified occurrences. Makes additional clarifying changes.

    Part 8.

    Amends GS 58-64A-205 by requiring the annual report to include audited financial statements of the provider’s most recent fiscal year (was, audited financial statements as of the end of the provider's most recent fiscal year).

    Amends GS 58-64A-210 by making a clarifying change.

    Amends GS 58-64A-215 as follows. Requires a provider to request approval of the specified sales, transfers, and purchase of property used in the operations of a continuing care retirement community by filing a request for approval with the Commissioner (was, by providing written notice to the Commissioner). Makes conforming changes. Amends the items that must be in the request for approval (previously in the written notice), to include a description of the financial impact on the applicant (was, on the provider). Makes a conforming change to require compliance with the review schedule in GS 58-64A-67 in responding to a request for approval. Amends the requirements to be met for the approval of the request for approval to include that the transaction does not jeopardize the financial stability of the application (was, of the provider). Makes additional clarifying changes.

    Amends GS 65-64A-220, which requires Commissioner approval to enter into an agreement to merge with, or otherwise acquire control of, a provider holding a certificate or license under this Article. Amends the information that must be included in a request for approval as follows. Specifies that that names and addresses that must be included are for each acquiring person (was, each person by whom or on whose behalf the merger or other acquisition of control is to be effected). No longer provides that when the source of the consideration is a loan made in the lender's ordinary course of business the identity of the lender must remain confidential, if requested. Requires inclusion of a description of any changes in the provision of goods and services to the provider and residents (was, a description of any change in the persons who currently provide goods and services to the provider and residents, including health care and management). Makes additional technical changes.

    Further amends the statute by making a conforming change to require compliance with the review schedule in GS 58-64A-67 in responding to a request for approval. Amends the conditions that must be met for approval of a request for approval by making clarifying changes and adding the requirement that the request for approval comply with the statute.

    Amends GS 58-64A-230, concerning the actuarial study by requiring the study to specifically state the reason when the actuary is unable to form an opinion (was, form a needed opinion). Makes additional technical changes.

    Amends GS 58-64A-240 to require a provider to request approval from the Commissioner (was, notify and receive the approval of the Commissioner) before entering into a contract with a third party for the management of a continuing care retirement community; makes conforming changes. No longer requires the inclusion, when applicable, of a statement as to whether there were any significant disagreements with the former manager. Makes a conforming change to require compliance with the review schedule in GS 58-64A-67 in responding to a request for approval. Amends the provision that requires the provider to remove a third-party manager immediately upon discovery of either of the two listed conditions by no longer requiring that the conditions had not been disclosed in the required notice to the Commissioner or in any disclosure statement filed with the Commissioner.

    Part 9.

    Amends GS 58-64A-270 by making clarifying changes.

    Amends GS 58-64A-280 to require submitting a request for the release of an operation reserve at least 10 business days before the proposed date of the release (was, proposed date of the withdrawal). Provides that the Commissioner may disapprove any request to release (was, withdrawal) the funds if the release (was, withdrawal) is not in the residents’ best interests.

    Part 10.

    Amends GS 58-64A-285 by amending the conditions under which the Commissioner may deny an application or any other request for approval, or restrict or revoke any permit, certificate, license, or other authorization issued under the Article, by making clarifying and technical changes.

    Amends GS 58-64A-295 by amending the required content of a corrective action plan, which must be completed when the Commissioner has determined that a provider is in a hazardous condition, to require that it include proposals of corrective actions the provider intends to take that would be expected (was, would be reasonably expected) to result in the elimination of the hazardous condition. Limits the requirements that apply to a revised corrective action plan by specifying that they are required when a revised corrective action plan is applicable. Makes a clarifying change.

    Amends GS 58-64A-300 by amending the provision that gives the Commission or his designee, for purposes of any investigation or proceeding under this Article, all the powers given to him for insurance companies, by no longer specifying that the Commissioner may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, agreements, or other documents or records deemed relevant or material to the inquiry.

    Part 12.

    Amends GS 58-64A-360 by changing the purpose of the semiannual meetings that the board of directors or other governing body of a provider or its designated representative must hold with the residents of each continuing care retirement community, to require free discussions of subjects affecting and concerning the continuing care retirement community and its residents (was, for free discussions of subjects, including, but not limited to, income, expenditures, and financial matters, trends, and problems as they apply to the continuing care retirement community and discussions of proposed changes in policies, programs, fees, facilities, and services). No longer sets out examples of the members of the governing body of the provider who must attend the meetings. No longer allows a provider to petition the Commissioner for a waiver if, in the provider’s opinion, a semiannual meeting cannot reasonably be held. Makes an additional clarifying change.

    Part 13.

    Amends GS 58-64A-370 by amending the membership of the Continuing Care Advisory Committee to require at least two (was, four) representatives of, and nominated by, the North Carolina Continuing Care Residents Association and two (was, four) representatives of, and nominated by, LeadingAge North Carolina. Removes the requirement that the Commissioner notify the Committee in writing of proposed statute or rule changes and hearings related to the administration of this Article.

    Amends the act’s effective date by adding that it applies to contracts entered into on or after October 1, 2023.


  • Summary date: Feb 22 2023 - View Summary

    Repeals Article 64, Continuing Care Retirement Communities, of GS Chapter 58. Instead, enacts new Article 64A, Continuing Care Retirement Communities, which provides as follows.

    Part 1.

    States the NCGA’s intent to promote the dignity and protect the health, safety, and welfare of older NC citizens by (1) encouraging the development of continuing care retirement communities and (2) requiring providers offering or providing continuing care in the State to be licensed and to be monitored and regulated by the North Carolina Department of Insurance (Department) under this new Article. Specifies that the Article applies to for-profit and non-profit providers.

    Sets out and defines 63 terms as they are used in the Article. Defines a continuing care retirement community as a retirement community consisting of one or more structures where a provider renders or will render some or all services promised in a continuing care or continuing care without lodging contract, whether or not the structures and land that make up the community are constructed, owned, leased, rented, managed, or otherwise contracted for by the provider. Provides that a continuing care retirement community may include one or more structures on a primary or contiguous site or an immediately accessible site. Excludes from the term, a person's personal residence if the residence is not a living unit provided by the provider. Allows a distinct phase of development approved by the Commissioner of Insurance (Commissioner) to be considered to be the continuing care retirement community when a project is being developed in successive distinct phases over a period of time. Specifies that “continuing care retirement community” and “life plan community” are the same thing. Defines provider as a person that offers or undertakes to provide continuing care under a continuing care or continuing care without lodging contract, or that represents themselves as providing continuing care. Defines continuing care as rendering to an individual other than an individual related by blood, marriage, or adoption to the person rendering the care housing in an independent living unit, together with related services, including access, when needed, to progressive levels of health care, including either assisted living care or nursing care, or both, regardless of whether the health care is provided at the continuing care retirement community where the individual resides or another location or through a contractual relationship with a third party, pursuant to a contract effective for the life of the individual or for a period longer than one year. Defines continuing care without lodging  as a program offered by a licensed provider that provides continuing care to an individual who is not yet receiving housing, including programs that offer an individual an opportunity to move to an independent living unit at a future date, if desired, according to the provider's established priority and admissions policies at the continuing care retirement community sponsoring the continuing care without lodging program.

    Allows the Commissioner to adopt rules to implement the Article.

    Prohibits a provider from paying a dividend or other distribution of equity or net assets after the Commissioner has determined that the provider is in a hazardous condition or has been determined to not be in satisfactory actuarial balance in an actuarial study filed with the Commission, or when the payment would have the effect of creating a hazardous condition in the provider or cause the provider to not be in satisfactory actuarial balance.

    Requires a person to have a certification, license, permit, or other approval from the Commissioner before offering or providing continuing care in this State. Sets out eight acts that are considered to be engaging in the business of offering or providing continuing care, including accepting any deposit or any other payment related to continuing care; entering into any non-binding or binding reservation agreement, continuing care contract, or continuing care without lodging contract; commencing construction or converting an existing building for a continuing care retirement community; and expanding the number of independent living units at a continuing care retirement community in an amount equal to or in excess of 20% of existing independent living units.

    Prohibits a provider who intends to collect or does collect entrance fees from leasing land or real property from another person if the land or property is to be used as a material part of a continuing care retirement community operated by the provider without first obtaining approval from the Commissioner. Entrance fees are defined as the sum of any initial, amortized, or deferred transfer of consideration made or promised by, or on behalf of, an individual entering into a continuing care or continuing care without lodging contract. Sets out the factors that the Commissioner must consider when deciding whether to allow an applicant or provider to lease any of the real property of a continuing care retirement community.

    Requires all filings required under the Article by applicants and providers to be submitted electronically.

    Allows the Commissioner to waive or modify the Article’s provisions if there is a state of emergency or disaster; there is an incident beyond a provider’s reasonable control that substantially affects the daily business operations of the provider or continuing care retirement community; or there is a sound actuarial, accounting, business principles, or other reasonable reason that does not diminish the Article’s protections. Prohibits any waiver or modification that results in a greater regulator burden, unless agreed to in writing by the applicant or provider.

    Specifies contracts, leases, notices, approvals, studies, and other documents that are confidential and privileged and are not considered public record and are not subject to subpoena or discovery or admissible as evidence in civil actions. Allows the Commissioner to use the same documents and information in furtherance of any regulatory or legal action brought as a part of the Commissioner’s official duties. Sets out the steps the Commissioner must take before making those items public. Requires any information shared with the Commissioner that is not covered under these provisions but a person believes to be confidential or a trade secret to make it as such before submission to the Commissioner. Sets out provisions governing when the Commissioner may (1) share information, including confidential and privileged documents, with regulatory agencies or law enforcement or (2) receive information, including confidential and privileged items, from regulatory and law enforcement officials of other foreign or domestic jurisdictions and how those documents must be treated.

    Prohibits providers from advertising a continuing care retirement community if the ad includes a statement or representation which materially conflicts with the disclosures required under this Article or materially conflicts with any continuing care or continuing care without lodging contract offered by the provider.

    Part 2.

    Requires a permit to accept deposits in order to market a proposed continuing care retirement community to measure its viability. Sets out the process for submitting the application to the Commissioner. Sets out the timeline within which the Commissioner must respond to the application. Sets out the conditions that must be met in order to approve the application. Allows the applicant, after having been issued a permit, to: (1) disseminate materials describing the intent to develop a continuing care retirement community; (2) enter into non-binding reservation agreements; and (3) collect deposits in an amount not to exceed $5,000, to be placed in escrow and released on in accordance with Part 4 of this Article. Providers that have been issued a permit are required to filed periodic status reports.

    Allows a person to apply for a start-up certificate by submitting the required information and paying a $2,00 application fee. Sets out the timeline within which the Commissioner must respond to the application. Sets out the conditions that must be met in order to approve the application. Once the certificate has been issued, requires the Commissioner to: (1) require the provider to submit periodic sales, development, and financial reports and (2) post the disclosure statement of the continuing care retirement community on the Department’s website. Allows the applicant, after having been issued the certificate, to: (1) enter into binding reservation agreements and continuing care contracts; (2) accept entrance fees and deposits greater than $5,000, to be placed in escrow and only released in accordance with Part 4 of this Article; (3) begin site preparation work; and (4) construct model independent living units for marketing.

    Allows a person to apply for a preliminary certificate by submitting the required information. Sets out the timeline within which the Commissioner must respond to the application. Sets out the conditions that must be met in order to approve the application. Once the certificate has been issued, requires the Commissioner to: (1) require the provider to submit periodic sales, development, and financial reports and (2) post the disclosure statement of the continuing care retirement community on the Department’s website. Allows the applicant, after having been issued the certificate, to: (1) construct a continuing care retirement community and (2) convert existing structure(s) into a continuing care retirement community.

    Allows a person to apply for a permanent license by submitting the required information. Sets out the timeline within which the Commissioner must respond to the application. Sets out the conditions that must be met in order to approve the application. Allows for the issuance of a restricted license. Once the license has been issued, requires the Commissioner to: (1) require the provider to submit periodic occupancy and financial statements and (2) post the disclosure statement of the continuing care retirement community on the Department’s website. Allows the applicant, after having been issued a permanent license, to: (1) open the continuing care retirement community and (2) provide continuing care. Allows applicants that receive a restricted permanent license to operate a continuing care retirement community under restrictions established by the Commissioner until the Commissioner issues a permanent license. Provides that when a restricted license is issued, the provider must inform all depositors and residents within 10 business days of all restrictions imposed by the license and conditions that the provider must satisfy to qualify for a permanent license.

    Sets the duration of a permit to accept deposits and a start-up certificate at 36 months. Allows a person with a permit to accept deposits or a start-up certificate to request an extension and sets out the information that must be included in the request. Allows the Commissioner to extend the permit or certificate for up to one year if there is satisfactory cause for the delay, and allows the Commissioner to require the provider to update information that was previously filed before approving an extension. Does not limit the number of extensions that may be granted. Provides that if there is no satisfactory cause for the delay, the Commissioner must instruct the escrow agent to refund all deposits held in escrow, plus interest. Requires the provider, within 10 days of denial of an extension, to notify each depositor of the denial, of the expiration of the permit or certificate, and of any right to a deposit refund.

    Sets out the process to be followed when an applicant or provider has material changes or deviation from the information submitted to the Commissioner.

    Sets out the steps to be followed when the Commissioner denies an application, notification, or any other request for approval under this Article. Sets out the process under which applicants can demand a review to determine the reasonableness of the denial.

    Part 3.

    Requires a provider, before marketing and collecting deposits for a proposed expansion of a continuing care retirement community that is 20% or more of existing independent living units, to: (1) notify and obtain written approval from the Commissioner and (2) give all residents written warning of the intent to expand the number of units. Sets out information that must be included in the notice to the Commissioner. Sets out the timeline within which the Commissioner must respond to the notification. Sets out the conditions that must be met in order to approve the expansion notification. Once the notification has been approved, requires the Commissioner to require the provider to submit periodic sales and development reports. Allows the provider, after approval of the expansion notification, to: (1) disseminate materials, including advertisements, describing the intent to expand the number of independent living units at the continuing care retirement community; (2) enter into non-binding reservation agreements, binding reservation agreements, and continuing care contracts for the proposed independent living units; and (3) collect entrance fees and deposits for the proposed independent living units, with deposits placed in escrow and only released in accordance with Part 4 of this Article.

    Requires a provider, before commencing construction of an expansion of a continuing care retirement community that is 20% or more of existing independent living units, to receive the Commissioner’s approval of an expansion notification and apply to the Commissioner for approval to commence construction. Sets out information that must be included with the expansion application, including  a $1,000 application fee. Sets out the timeline within which the Commissioner must respond to the application. Sets out the conditions that must be met in order to approve the expansion application. Once the application has been approved, requires the Commissioner to require the provider to submit periodic sales and development reports. Allows the provider, after approval of the expansion application, to commence construction of the new independent living units at the continuing care retirement community as proposed, and upon completion of construction and the satisfaction of all other legal requirements, open the expansion and provide continuing care to the residents of the new units.

    Requires all entrance fees and deposits collected for independent living units in an expansion that requires approval from the Commissioner to be placed in escrow unless otherwise exempted by the Commissioner.

    Part 4.

    Requires entrance fees and deposits required under the Article to be deposited by the provider in an escrow account and maintained in a segregated account without commingling with other funds. Requires the Commissioner to approve in advance the escrow agent and all terms governing the account. Specifies 12 provisions that must be included in the written escrow agreement between the provider and escrow agent. Requires changes to the agreement to be approved by the Commissioner before they are used. Sets out provisions governing the delivery of the entrance fees or deposits to the escrow agent. Sets out the manners in which the entrance fees and deposits must be maintained by the escrow agent.

    Requires approval from the Commissioner for interest, income, and other gains from funds held in escrow to be released or distributed. Sets out conditions for such approval. Requires interest to be distributed to the provider or depositors when the release of earnings is approved.

    Prohibits using funds in an escrow account as collateral without prior written approval from the Commissioner.

    Requires a refund of the escrowed funds upon notice from the provider of the death of a depositor, nonacceptance by the provider, voluntary cancellation, the denial of an application, or upon written notice from the Commissioner.

    Sets out the process for requirements for petitioning the Commissioner for the release of: (1) the first 25% of each escrowed entrance fee and deposit and (2) the remaining 75% of escrowed entrance fees and deposits. Sets out requirements for the release of those funds.

    Part 5.

    Requires a provider to prepare a disclosure statement for each continuing care retirement community operated or to be operated in the State that contains the 34 specified pieces of information, including: (1) specified information about the officers, directors, trustees, managers, managing or general partners, or any person having a 10% or greater equity or beneficial interest in the provider and any person who will be managing the community on a day-to-day basis; (2) names of any other person who will be responsible for the financial and contractual obligations of the provider not already disclosed and the extent of their responsibilities; (3) the number of existing living units, or the number of units to be constructed at the community; (4) a description of any property rights of residents in the community; (5) circumstances under which a resident will be allowed to remain a resident at the community in the event of possible resident financial difficulties; (6) terms and conditions under which a contract may be canceled by the provider, or by the resident, and the conditions under which fees can be refunded; (7) conditions under which a provider may require a resident to move into another unit for their safety or for the provider’s good; and (8) a five-year prospective financial statement. Requires a copy of the most common continuing care and continuing care without lodging contract used by the provider to be attached to each disclosure statement. Sets out requirements for the disclosure statement’s cover page and for the readability of the disclosure statement. Requires the Commissioner to review the statement for completeness. Requires the Commissioner to post the current disclosure statement for each continuing care retirement community on the Department’s website.

    Sets out requirements for the delivery of a disclosure statement to a person or their legal representative with whom a binding reservation agreement, continuing care contract, or continuing care without lodging contract is being entered into. Sets out the required timing for delivery. Allows electronic delivery if the person consents. Requires an acknowledgment of receipt of a disclosure statement. Requires the Commissioner to maintain copies of all disclosure statements and amendments for at least five years

    Requires providers to file a revised disclosure statement within 150 days following the end of each fiscal year along with an annual filing fee of $2,000. Sets out requirements for the receipt that the Commissioner must provide and requires posting the annual revised disclosure statement on the Department’s website within the specified timeframe. Also requires the provider to make the annual revised statement available to all residents and depositors. Allows for extension of the due date, of no more than 30 days. Provides for a late fee, which can be waived for good cause.

    Sets out conditions under which other revisions may be made to a disclosure statement.

    Part 6.

    Sets out items that must be included in a binding reservation agreement, defined as a binding contractual agreement between a provider and a depositor that requires the payment of a deposit to reserve the right to purchase continuing care, including the right to live in an independent living unit at a continuing care retirement community. Specifies that a purchase and sale agreement for an independent living unit is not considered a binding reservation agreement for the purposes of this Article. Items that must be included in the agreement relate to rescinding the agreement, automatic cancellation of the agreement, the refund of money or other consideration transferred to the provider upon a rescinding or cancellation, and the computation of any refund due to a depositor for cancellation or termination.

    Sets out the provisions that must be included in a continuing care contract.

    Part 7.

    Requires a license for a person to arrange or provide continuing care without lodging. Allows a provider with a permanent license or a restricted permanent license to apply for a continuing care without lodging license. Sets out items that must be included in the application, including a $500 application fee. Sets out the timeline within which the Commissioner must respond to the application. Sets out the conditions that must be met in order to approve the application. Once the application has been approved, allows the Commissioner to require the provider to submit periodic reports to monitor the status of the program. Allows the applicant, after approval of the application, to arrange or provide continuing care without lodging, and requires filing an amended disclosure statement that contains the required information on continuing care without lodging.

    Sets out items that must be included in a continuing care without lodging contract.

    Part 8.

    Requires a provider that has a permanent license or a restricted permanent license to submit an annual report to the Commissioner. Specifies items that must be included related to audited financial statements, five-year prospective financial statements, operating reserve certification, disclosure statements, and dates on which the required semiannual meetings were held. Requires additional information if the provider is also licensed to provide continuing care without lodging. Sets out the timing for filing the annual report and allows an extension for no more than 30 days. Sets out late fees, which may be waived for good cause.

    Allows the Commissioner to require additional information. Requires the provider to notify the Commissioner and residents when the provider fails to maintain the operating reserve; the 12-month daily average independent living unit occupancy rate has fallen below 85% and remained there for more than 90 days; the provider or any group the provider is a part of has violated any covenant in the debt agreement, or the provider seeks modification, waiver, or extension of the material financial covenants or material payment terms under a mortgage loan, bond indenture, or other long-term financial agreement.

    Prohibits the transfer of a permit, certificate, or license issued under this Article. Requires approval from the Commissioner before a provider or other owing person can sell or transfer any real property used in the operations of a continuing care retirement community or any interest in a community, other than the sale of an independent living unit to a resident or other transferee. Requires a provider to get approval from the Commissioner before consummating any purchase of real property currently leased and used by the provider in the operations of a continuing care retirement community. Sets out requirements for the timing and content of the requests for these transactions. Sets out the timeline within which the Commissioner must respond to the request. Sets out the conditions that must be met in order to approve the request. Allows the Commissioner to revoke or restrict a certificate or license of a provider or take other administrative actions if a provider violates these provisions.

    Requires the Commissioner’s approval to enter into an agreement to merge with, or otherwise acquire control of, a provider holding a certificate or license. Requires the acquiring person to file the request for approval. Sets out the required content for the approval request. Sets out the timeline within which the Commissioner must respond to the request. Sets out the conditions that must be met in order to approve the request. Requires providers to give notice to all affected residents and depositors of the proposed merger or other acquisition of control within 5 business days after receiving approval. Allows the Commissioner to revoke or restrict a certificate or license of a provider or take other administrative actions if a provider violates these provisions.

    Requires a provider to maintain, after the opening of a continuing care retirement community, an operating reserve and sets out reporting requirements.

    Requires a provider to submit an actuarial study to the Commissioner, at least once every three years. Sets out additional requirements governing the study. Exempts from these actuarial study requirements a provider that only offers health care on a fee-for-service basis or only provides a limited discount or a limited number of free days in a long-term care facility; sets out documents that these individuals must provide instead.

    Requires notifying the Commissioner before the provider changes its name or the name of a community it operates. Sets out requirements for notifying residents and depositors of the proposed change. 

    Requires approval from the Commissioner before a provider enters into a contract with a third party for the management of a continuing care retirement community. Sets out required content of the notification given to the Commissioner and for providing notice to residents. Sets out the timeline for the Commissioner’s review of the notification. Sets out conditions under which the Commissioner may disapprove of the proposed third-party manager and conditions under which the provider must immediately remove a third-party manager. 

    Requires the provider to notify the Commissioner before reducing the number of living units at a continuing care retirement community by 20% or more. Specifies the information that must be provided in the notice and for providing notice to residents. 

    Part 9. 

    Requires providers to maintain after the opening of a continuing care retirement center an operating reserve equal to 50% of the total operating costs of the community forecasted or projected for the 12-month period following the period covering the most recent disclosure statement. Provides that once a community achieves a 12-month daily average independent living unit occupancy rate of 90% or higher, a provider is only required to maintain an operating reserve in the amount specified, with amounts ranging from 12.5% to 50% depending on the occupancy rate. Allows the Commissioner to increase the operating reserve amount if the provider is in a hazardous condition. Sets out related resident notification requirements. Sets out provisions for calculating the operating reserve amount. Specifies the types of assets that can be used by a provider to fund the operating reserve.  

    Allows a provider, instead of funding the operating reserve with qualifying assets, to fund all or a portion of the reserve by filing a surety bond or letter of credit. Sets out the requirements for the surety bond or letter of credit. 

    Requires approval from the Commissioner before an operating reserve can be released. Sets out requirements for the request. Allows disapproval of the request to withdraw funds if it is determined that it would not be in the resident’s best interest. Sets out requirements for providing notice to residents. 

    Part 10. 

    Allows the Commissioner to (1) deny an application or any other request or approval or (2) restrict or revoke any permit, certificate, license, or other authorization issued under the Article if the Commissioner finds that the applicant or provider committed one of the 20 specified acts, including: (1) willfully violated any provision of this Article or the Commissioner’s rules or orders; (2) engaged in fraudulent or dishonest business practices; (3) failed to maintain the escrow account; (4) violated a restriction of its permit, certificate, or license; or (5) has been determined to be in a hazardous condition. Requires the Commissioner to first issue a cease-and-desist order; if the order is not or cannot remedy the violation, allows the Commissioner, after notice and hearing, to order revocation. Allows a revocation order to be appealed to the Wake County Superior Court. Allows the Commissioner to remove a restriction upon finding changed circumstances. Sets out requirements for notice to residents. Specifies that revocation does not release a provider from obligations assumed through continuing care and continuing care without lodging contracts. 

    Sets out 14 standards that the Commissioner may consider in determining whether a provider is in a hazardous condition, including: (1) whether the provider is impaired or insolvent; (2) adverse findings reported in examination reports, audit reports, and actuarial opinions, reports, or summaries; (3) whether the provider has failed to establish, maintain, or has substantially depleted the required operating reserve; (4) whether the management of a provider has failed to respond to the Commissioner's inquiries about the condition of the applicant or provider or has furnished false and misleading information in response to an inquiry by the Commissioner; or (5) whether the applicant or provider has experienced or will experience in the foreseeable future cash flow or liquidity problems. 

    Allows the Commissioner, upon determining that a provider is in a hazardous condition, to issue an order, after notice and opportunity for hearing, requiring a provider to (1) submit a corrective action plan within 45 days and (2) notify all residents and depositors within five business days of the Commissioner's order. Requires the corrective action plan to include: (1) proposals of corrective actions the provider intends to take which would reasonably be expected to result in the elimination of the hazardous condition and (2) a date when the provider anticipates it will rectify the problems and deficiencies. Sets out the timeline under which the Commissioner must act on the plan. Allows for submission of a revised plan based on notification from the Commissioner. Requires immediate implementation of an approved plan, distribution of the plan to residents and depositors, and reporting progress to the Commissioner. Allows the Commissioner to engage consults to develop a corrective action plan when a submitted plan is disapproved. 

    Sets out the Commissioner’s investigate and subpoena powers. 

    Makes a provider civilly liable for entering into a binding reservation agreement, continuing care contract, or continuing care without lodging contract without having first delivered a disclosure statement to the person with whom the agreement or contract was entered into, or for entering into a binding reservation agreement, continuing care contract, or continuing care without lodging contract with a person who has relied on a disclosure statement that materially misrepresents or omits a material fact required to be stated or necessary in order to make the statement, in light of the circumstances under which they are made, not misleading. Specifies that liability exists regardless of whether the provider had actual knowledge of the misstatement or omission. Prohibits a person from bringing an action if the person was offered and failed to timely accept an offer of a refund that meets the specified amounts. Requires the action to be brought within three years of the alleged violation. 

    Makes it a Class 1 misdemeanor to willfully and knowingly violate the Article.  

    Sets out the conditions under which a permit, certificate, license, or other approval must be forfeited, after notice and opportunity for hearing. Sets out requirements for notifying residents and depositors of forfeiture. 

    Allows the Commissioner, after determining that a provider is or has been violating the Article, to, after notice and opportunity for hearing, order the provider to cease entering into binding reservation agreements, continuing care contracts, and continuing care without lodging contracts and make a rescission offer to any resident or depositor who entered into such an agreement or contract while the violation was occurring.  Allows for the agreements and contracts to be rescinded without penalty by the resident or depositor. Bars residents and depositors from benefitting from this provision if they have refused or failed to timely accept an offer by the provider to rescind the agreement or contract and refund the full amount paid plus interest (less specified costs). 

    Sets out the conditions under which the Commissioner may order payment of a penalty (of $100-$1,000 per violation) or petition the court for an order directing payment of restitution. 

    Prohibits a provider from actively soliciting, approving the solicitation of, or entering into new binding reservation agreements, continuing care contracts, or continuing care without lodging contracts in this State after the provider knew, or reasonably should have known, that the provider was impaired or insolvent except with the Commissioner’s written permission. 

    Part 11. 

    Sets out the conditions under which the Commissioner may commence supervision proceedings or apply to the Wake County Superior Court or federal bankruptcy court that may have previously taken jurisdiction over the provider or community for an order directing or authorizing the Commissioner to rehabilitate or to liquidate a provider or continuing care retirement community. Sets out requirements for providing notice to residents and depositors. Sets out the conditions under which the rehabilitation may be terminated and the community and its assets and affairs are returned to the provider’s management. Requires an order for rehabilitation to be refused or vacated if the provider posts a bond, as specified. 

    Allows, when the Commissioner has been appointed as a receiver for a provider or a continuing care retirement community, the Department of Health and Human Services to accept and approve the addition of adult care home beds or nursing beds for a continuing care retirement community owned by, or operated by, the provider, if it appears to the Court that (1) the best interests of the provider or (2) the welfare of persons who have previously contracted with the provider or may contract with the provider, may be best served by the addition of adult care home beds or nursing beds. 

    Provides that in the event of liquidation of a provider, all continuing care and continuing care without lodging contracts executed by the provider are deemed preferred claims against all of the provider’s assets (although claims are subordinate to the liquidator’s cost of administration or any secured claim). 

    Part 12.

    Gives a resident of a continuing care retirement community operated by a licensed provider the right of self-organization, the right to be represented by an individual of the resident's own choosing, and the right to engage in concerted activities to keep informed on the community’s operations or for other mutual aid or protection. Specifies that this includes the right to establish a residents' council. 

    Requires the provider’s board of directors or other governing body to hold in-person semiannual meetings with the residents of each continuing care retirement community operated by the provider in this State for free discussions of subjects include specified topics. Specifies that a provider is allowed to make a semiannual meeting available via electronic means to residents who are unable to attend in person. Sets out requirements for providing notice of the meetings. Sets out emergency conditions under which the meetings can be held electronically.  

    Section 13. 

    Provides that no act, agreement, or statement of any resident, or of an individual purchasing continuing care for a resident under any continuing care or continuing care without lodging contract, is a valid waiver of any provision of this Article intended for the benefit or protection of the resident or the individual purchasing continuing care for the resident.  

    Establishes the 12 member Continuing Care Advisory Committee comprised of providers, residents, and professionals involved in the continuing care retirement community industry. Sets out additional membership requirements and sets membership terms at 3 years, with two consecutive terms allowed. Requires the Committee to: (1) act in an advisory capacity to the Commissioner on matters pertaining to the operation and regulation of continuing care retirement communities and continuing care without lodging programs; (2) report to the Commissioner on developments in the continuing care retirement community industry and problems or concerns of providers and residents; and (3) recommend changes in relevant statutes and rules.  

    Provides that this Article does not affect the authority of the Department of Health and Human Services or any successor agency otherwise provided by law to license or regulate any long-term care facility. Exempts continuing care retirement communities and providers licensed under this Article that are also subject to the provisions of the North Carolina Condominium Act from the provisions of GS Chapter 39A (Transfer Fee Covenants Prohibited), if the continuing care retirement community's declaration of condominium does not require the payment of any fee or charge not otherwise provided for in a resident's continuing care contract, or other separate contract for the provisions of membership or services. 

    Allows the Commissioner, or designee, to visit a provider to examine its books and records. Also allows the Commissioner, or designee, to examine a person with a contractual or financial relationship with the provider, to the extent necessary to ascertain the provider’s financial condition, if the provider relies on a contractual or financial relationship with another person in order to meet the Article’s financial requirements. 

    Applies to contracts issued, renewed, or amended on or after October 1, 2023.