Current Status Bill Number:
347Type of Legislation: General Bill GBIntroducing Body: SenateIntroduced Date: 19950110Primary Sponsor: GieseAll Sponsors: Giese, Passailaigue, Glover, Bryan, Lander, Reese, Rose and J. Verne SmithDrafted Document Number: pfm\7072ac.95Companion Bill Number: 3191Residing Body: SenateCurrent Committee: Banking and Insurance Committee 02 SBISubject: Continuing care retirement community
Body Date Action Description Com Leg Involved ______ ________ _______________________________________ _______ ____________ Senate 19950110 Introduced, read first time, 02 SBI referred to CommitteeView additional legislative information at the LPITS web site.
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.