S 1224 Session 110 (1993-1994)
S 1224 General Bill, By Giese, Glover and Passailaigue
Similar(H 4857)
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 Senate Introduced and read first time SJ-3
03/02/94 Senate Referred to Committee on Banking and Insurance SJ-3
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.
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 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. Section 37-11-50(2) of the 1976 Code, as added by
Act 97 of 1989, is amended to read:
"(2) The continuing care retirement community which
requires payment of an entrance fee or other fee in return for a
promise of future care is financially responsible and can meet its
obligations to residents."
SECTION 6. This act takes effect upon approval by the Governor.
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