H*3191 Session 111 (1995-1996)
H*3191(Rat #0031, Act #0019 of 1995) General Bill, By P.B. Harris, J. Brown,
Inabinett, Neilson, Rhoad, J.S. Shissias and D.C. Waldrop
Similar(S 347)
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 House Introduced and read first time HJ-74
01/10/95 House Referred to Committee on Labor, Commerce and
Industry HJ-74
02/01/95 House Committee report: Favorable Labor, Commerce and
Industry HJ-1
02/07/9 5 House Read second time HJ-17
02/08/95 House Read third time and sent to Senate HJ-16
02/09/95 Senate Introduced and read first time SJ-8
02/09/95 Senate Referred to Committee on Banking and Insurance SJ-8
03/09/95 Senate Committee report: Favorable Banking and Insurance SJ-17
03/15/95 Senate Read second time SJ-19
03/23/95 Senate Read third time and enrolled SJ-12
03/30/95 Ratified R 31
04/04/95 Signed By Governor
04/04/95 Effective date 04/04/95
04/11/95 Copies available
04/11/95 Act No. 19
(A19, R31 , H3191)< p>
AN ACT 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:
Approval needed to distribute dividend
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."
Financial plan may be required if financial condition is
unsound
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 de termined
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."
Exemptions
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)."
Application requirements
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
application for a license is filed, interim financial statements as of a date
not more than ninety days before the date of filing the application must
be included but need not be certified;
(10) if the continuing care contract provides for services for 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;"
Financial responsibility considerations
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 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;"
Time effective
SECTION 6. This act takes effect upon approval by the Governor.
Approved the 4th day of April, 1995. |