S 347 Session 111 (1995-1996)
S 0347 General Bill, By Giese, Bryan, Glover, Lander, Passailaigue, Reese,
M.T. Rose and J.V. Smith
Similar(H 3191)
A Bill to amend the Code of Laws of South Carolina, 1976, by adding Section
37-11-95 so as to require an operator of a continuing care retirement
community to obtain approval from the Department of Consumer Affairs to
distribute a dividend or similar distribution; by adding Section 37-11-105 so
as to require an operator of a continuing care retirement community to submit
a financial plan to the Department for approval if the Department has reason
to believe the operator is or may become insolvent; by adding Section
37-11-135 so as to exempt from certain licensing requirements a continuing
care retirement community which does not require payment of an entrance fee;
by amending Section 37-11-30, relating to licensing of continuing care
retirement communities, so as to revise information that must accompany
license applications; and by amending Section 37-11-40, relating to the
determination of financial responsibility of an applicant for licensure, so as
to revise conditions under which a bond or other guarantee is required.
01/10/95 Senate Introduced and read first time SJ-147
01/10/95 Senate Referred to Committee on Banking and Insurance SJ-147
A BILL
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA,
1976, BY ADDING SECTION 37-11-95 SO AS TO REQUIRE AN
OPERATOR OF A CONTINUING CARE RETIREMENT
COMMUNITY TO OBTAIN APPROVAL FROM THE
DEPARTMENT OF CONSUMER AFFAIRS TO DISTRIBUTE A
DIVIDEND OR SIMILAR DISTRIBUTION; BY ADDING
SECTION 37-11-105 SO AS TO REQUIRE AN OPERATOR OF
A CONTINUING CARE RETIREMENT COMMUNITY TO
SUBMIT A FINANCIAL PLAN TO THE DEPARTMENT FOR
APPROVAL IF THE DEPARTMENT HAS REASON TO
BELIEVE THE OPERATOR IS OR MAY BECOME
INSOLVENT; BY ADDING SECTION 37-11-135 SO AS TO
EXEMPT FROM CERTAIN LICENSING REQUIREMENTS A
CONTINUING CARE RETIREMENT COMMUNITY WHICH
DOES NOT REQUIRE PAYMENT OF AN ENTRANCE FEE; BY
AMENDING SECTION 37-11-30, RELATING TO LICENSING
OF CONTINUING CARE RETIREMENT COMMUNITIES, SO
AS TO REVISE INFORMATION THAT MUST ACCOMPANY
LICENSE APPLICATIONS; AND BY AMENDING SECTION
37-11-40, RELATING TO THE DETERMINATION OF
FINANCIAL RESPONSIBILITY OF AN APPLICANT FOR
LICENSURE, SO AS TO REVISE CONDITIONS UNDER
WHICH A BOND OR OTHER GUARANTEE IS REQUIRED.
Be it enacted by the General Assembly of the State of South
Carolina:
SECTION 1. Chapter 11, Title 37 of the 1976 Code is amended
by adding:
"Section 37-11-95. (A) An operator shall obtain approval
from the department before declaring or distributing a dividend or
similar distribution which generates a retained deficit or increases
an existing retained deficit.
(B) The department's approval required under subsection (A)
must be given within thirty days from the date of the request unless
the department determines in writing that the distribution is not
reasonable in relation to the operator's or facility's outstanding
liabilities or would otherwise affect the financial soundness of the
operator or the facility."
SECTION 2. Chapter 11, Title 37 of the 1976 Code is amended
by adding:
"Section 37-11-105. (A) At any time when the department
has reason to believe that the operator is insolvent, is in imminent
danger of becoming insolvent, is in a financially unsound or unsafe
condition, or that a continuing care retirement community's
financial condition is such that it may otherwise be unable to fully
perform its obligations pursuant to continuing care contracts, the
department in addition to other remedies may require the operator
to submit for approval within sixty days a financial plan detailing
the method by which the operator proposes to overcome the
deficiencies noted by the department. The department shall approve
or disapprove the plan within thirty days of the receipt.
(B) If the plan is approved, the operator immediately shall
implement the plan.
(C) If the plan is disapproved or if at any time after approval
the department determines that the plan is not being fully
implemented, the department may require the operator to obtain
new or additional management capability to solve its difficulties.
The department must give the reorganized management a reasonable
period of time, as determined by the department, to develop a plan
which, subject to the approval of the department, will reasonably
assure that the operator will meet its responsibilities under the law.
The deadlines for action described in this subsection may be
extended upon mutual agreement of the operator and the
department.
(D) Failure to implement the plan may result in suspension or
revocation of a license."
SECTION 3. Chapter 11, Title 37 of the 1976 Code is amended
by adding:
"Section 37-11-135. A continuing care retirement
community which does not require payment of an entrance fee is
exempt from the requirements of Sections 37-11-30(B)(9),
37-11-40, and 37-11-50(2)."
SECTION 4. Section 37-11-30(B)(9) and (10) of the 1976
Code, as added by Act 97 of 1989, is amended to read:
"(9) certified financial statements of the operator,
including a balance sheet as of the end of the most recent fiscal
year and income statements for the three most recent fiscal years of
the operator or for all of the years in existence if less than three
years. If the operator's fiscal year ended more than one hundred
twenty days before the date the disclosure statement is
recorded the application for a license is filed, interim
financial statements as of a date not more than ninety days before
the date of recording the statement filing the
application must be included but need not be certified;
(10) if the continuing care contract provides for services for a
fixed fee for the life of the person or for more than one year
the life of the person or for more than one year including
mutually terminable contracts, a summary of a report of an
actuary, updated every two years, that estimates the capacity of the
operator to meet its contractual obligation to the residents;"
SECTION 5. Section 37-11-40(3) of the 1976 Code, as added
by Act 97 of 1989, is amended to read:
"(3) if the continuing care contract provides for services
for a fixed fee for the life of the person or for more than one
year the life of the person or for more than one year
including mutually terminable contracts, a surety bond,
financial reserves, letter of credit, or other financial arrangement to
guarantee the performance of contractual obligations;"
SECTION 6. This act takes effect upon approval by the
Governor.
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