H 4857 Session 110 (1993-1994)
H 4857 General Bill, By P.B. Harris, Neilson and D.C. Waldrop
Similar(S 1224)
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 amending Section
37-11-30, relating to licensing of continuing care retirement communities, so
as to revise information that must accompany license applications; 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; and by amending Section 37-11-50, relating to
eligibility for licensure, so as to provide that only those continuing care
retirement communities which require payment of an entrance fee or other fee
in return for a promise of future care must obtain a license rather than all
continuing care retirement communities.
03/02/94 House Introduced and read first time HJ-7
03/02/94 House Referred to Committee on Labor, Commerce and
Industry HJ-8
04/13/94 House Committee report: Favorable with amendment Labor,
Commerce and Industry HJ-6
04/27/94 House Amended HJ-45
04/27/94 House Read second time HJ-45
04/28/94 House Read third time and sent to Senate HJ-312
05/03/94 Senate Introduced and read first time SJ-13
05/03/94 Senate Referred to Committee on Banking and Insurance SJ-13
Indicates Matter Stricken
Indicates New Matter
AMENDED
April 27, 1994
H. 4857
Introduced by REPS. P. Harris, Waldrop and Neilson
S. Printed 4/27/94--H.
Read the first time March 2, 1994.
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 AMENDING SECTION
37-11-30, RELATING TO LICENSING OF CONTINUING CARE
RETIREMENT COMMUNITIES, SO AS TO REVISE
INFORMATION THAT MUST ACCOMPANY LICENSE
APPLICATIONS; 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; AND BY AMENDING SECTION 37-11-50,
RELATING TO ELIGIBILITY FOR LICENSURE, SO AS TO
PROVIDE THAT ONLY THOSE CONTINUING CARE
RETIREMENT COMMUNITIES WHICH REQUIRE PAYMENT OF
AN ENTRANCE FEE OR OTHER FEE IN RETURN FOR A
PROMISE OF FUTURE CARE MUST OBTAIN A LICENSE
RATHER THAN ALL CONTINUING CARE RETIREMENT
COMMUNITIES.
Amend Title To Conform
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 this 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 shall immediately 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. 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 4. 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 5. 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 6. This act takes effect upon approval by the Governor.
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