Bill Text: GA HB843 | 2009-2010 | Regular Session | Introduced
Bill Title: Insurance; continuing care providers and facilities; extensively revise requirements
Spectrum: Partisan Bill (Republican 2-0)
Status: (Introduced - Dead) 2009-04-03 - House Second Readers [HB843 Detail]
Download: Georgia-2009-HB843-Introduced.html
09 LC
33 3246ER
House
Bill 843
By:
Representatives Jacobs of the
80th
and Knox of the
24th
A
BILL TO BE ENTITLED
AN ACT
AN ACT
To
amend Title 33 of the Official Code of Georgia Annotated, relating to insurance,
so as to extensively revise the requirements for continuing care providers and
facilities; to revise definitions; to provide for enforcement powers of the
Commissioner of Insurance; to revise provisions relating to annual disclosure
statements; to revise requirements for continuing care agreements; to provide
extensive requirements for disclosure statements; to provide for specific
financial requirements; to provide for supervision, rehabilitation, and
liquidation of a continuing care provider facility; to revise provisions
relating to penalties for violations; to provide for related matters; to repeal
conflicting laws; and for other purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
Title
33 of the Official Code of Georgia Annotated, relating to insurance, is amended
by revising Chapter 45, relating to continuing care providers and facilities, as
follows:
"CHAPTER
45
33-45-1.
As
used in this chapter, the term:
(1)
'Continuing care' or 'care' means furnishing pursuant to an agreement
shelter,
lodging in which a resident lives
independently, food, and
either
nursing care
or personal
services, whether such nursing care
or personal
services are
is
provided in the facility or in another setting designated by the agreement for
continuing care, to an individual not related by consanguinity or affinity to
the provider furnishing such care upon payment of an entrance fee.
Other
personal
Personal
services
provided, if
any, shall be designated in the continuing
care agreement. Agreements to provide continuing care include agreements to
provide care for any duration, including agreements that are terminable by
either party.
(2)
'Continuing care agreement' means a contract or agreement to provide continuing
care or other services regulated by this chapter.
(2)(3)
'Entrance fee' means an initial or deferred payment of a sum of money or
property made as full or partial payment to assure the resident
a place in
a facility
continuing
care and lodging in which a resident lives independently. Provided, however,
that such an initial or deferred payment of a sum of money or property made
which is greater than or equal to 12 times the monthly care fee shall be
presumed to be an entrance fee so long as such payment is intended to be a full
or partial payment to assure the resident lodging in which he or she lives
independently and certain other services which do not otherwise constitute
continuing care. An accommodation fee,
admission fee, or other fee of similar form and application shall be considered
to be an entrance fee.
(3)(4)
'Facility' means a place in which it is undertaken to provide continuing care
or other
services regulated by this
chapter.
(4)(5)
'Licensed' means that the provider has obtained a certificate of authority from
the department.
(6)
'Monthly care fee' means the fee charged to a resident for continuing care on a
monthly or periodic basis. Periodic fee payments or other prepayments shall not
be monthly care fees.
(5)(7)
'Personal services' means, but is not limited to, such services as: individual
assistance with eating, bathing, grooming, dressing, ambulation, and
housekeeping; supervision of self-administered medication; arrangement for or
provision of social and leisure services; arrangement for appropriate medical,
dental, nursing, or mental health services; and other similar services which the
department may define. 'Personal services' shall not be construed to mean the
provision of medical, nursing, dental, or mental health services by the staff of
a facility.
(6)(8)
'Provider' means the owner or operator, whether a natural person, partnership,
or other unincorporated association, however organized, trust, or corporation,
of an institution, building, residence, or other place, whether operated for
profit or not, which owner or operator undertakes to provide continuing care
or other
services regulated under this chapter for
a fixed or variable fee, or for any other remuneration of any type, whether
fixed or variable, for the period of care, payable in a lump sum or lump sum and
monthly maintenance charges or in installments.
(7)(9)
'Resident' means a purchaser of or a nominee of or a subscriber to a continuing
care agreement
or other
agreement regulated under this chapter.
Such an agreement may not be construed to give the resident a part ownership of
the facility in which the resident is to reside unless expressly provided for in
the agreement.
33-45-2.
Except
as provided in this chapter, providers of continuing care facilities shall be
governed by the provisions of this chapter and shall be exempt from all other
provisions of this title.
(a) For the
purpose of enforcing the requirements of this chapter, the Commissioner and the
department are authorized to use the powers granted in Chapters 1 and 2 of this
title.
(b)
A facility which charges a resident an entrance fee for lodging in which a
resident lives independently and for certain services which do not constitute
continuing shall not call itself nor be considered a provider of continuing
care, but such facility shall otherwise be subject to the requirements imposed
upon the providers and facilities regulated by this chapter.
33-45-3.
Nothing
in this title or chapter shall be deemed to authorize any provider of a
continuing care facility to transact any insurance business other than that of
continuing care insurance or otherwise to engage in any other type of insurance
unless it is authorized under a certificate of authority issued by the
department under this title. Nothing in this chapter shall be construed so as
to interfere with the jurisdiction of the Department of Human Resources, the
Department of Community Health, or any other regulatory body exercising
authority over continuing care providers.
33-45-4.
The
administration of this chapter is vested in the department, which
shall:
(1)
Prepare and furnish all forms necessary under the provisions of this
chapter;
(2)
Collect in advance, and the applicant shall pay in advance, the following
fees:
(A)
At the time of filing an application for a certificate of authority, an
application fee as provided in Code Section 33-8-1 for each
facility;
(B)
At the time of renewal of a certificate of authority, a renewal fee as provided
in Code Section 33-8-1 for each year or part thereof for each facility where
continuing care is provided; and
(C)
A late fee in an amount equal to 50 percent of the renewal fee in effect on the
last preceding regular renewal date. In addition to any other penalty that may
be provided for under this chapter, the department may levy a fine not to exceed
$50.00 a day for each day of noncompliance;
and
(3)
Adopt rules, within the standards of this chapter, necessary to effect the
purposes of this chapter. Specific provisions in this chapter relating to any
subject shall not preclude the department from adopting rules concerning such
subject if such rules are within the standards and purposes of this
chapter;.
(4)
Adopt rules, within the standards of this chapter, to set a bond conditioned
upon compliance with the provisions of this chapter. The amount of the bond
shall be not less than $10,000.00. The rules adopted by the department shall
provide for consideration of the obligations, financial condition, amounts of
debt, service provisions, and such other features as deemed pertinent and
applicable to the determination of a sufficient bond amount; and
(5)
Impose administrative fines and penalties pursuant to this chapter.
33-45-5.
No
person may engage in the business of providing continuing care or issuing
continuing care agreements in this state without a certificate of authority
therefor obtained from the department as provided in this chapter. The
application for approval or renewal of a certificate of authority shall be on
such forms as provided by the department. The department shall issue such
certificate of authority if the applicant pays the required fees and the
continuing care agreement for the applicant meets the requirements of Code
Section 33-45-7. The department shall renew a certificate of authority if the
provider pays the required fees and furnishes the annual
disclosure
statements required by Code Section 33-45-6 and is otherwise not in violation of
this chapter.
33-45-6.
(a)
Annually, on or before
May
1
the time of
renewal of a certificate of authority, the
provider shall file
an
annual
a revised
disclosure statement and such other
information and data showing its condition as of the last day of the preceding
calendar year or fiscal year of the provider. If the department does not
receive the required information on or before
May
1
the time of
renewal of the certificate of authority or
within 120 days after the last day of the fiscal year of the provider, a late
fee may be charged
pursuant to
Code Section 33-45-4. The department may
approve an extension of up to 30 days.
(b)
The provider shall also make the revised disclosure statement available to all
the residents of the facility. The revised disclosure statement shall include a
narrative describing any material differences between the forecasted statements
of revenues and expenses and cash flows or other forecasted financial data filed
pursuant to paragraph (9) of subsection (d) of Code Section 33-45-9 as a
part of the disclosure statement recorded immediately subsequent to the start of
the provider's most recently completed fiscal year and the actual results of
operations during that fiscal year, together with the revised forecasted
statements of revenues and expenses and cash flows or other forecasted financial
data being filed as a part of the revised disclosure statement. A provider may
also revise its disclosure statement and have the revised disclosure statement
recorded at any other time if, in the opinion of the provider, revision is
necessary to prevent an otherwise current disclosure statement from containing a
material misstatement of fact or omitting a material fact required to be stated
therein. Only the most recently recorded disclosure statement, with respect to
a facility, and in any event, only a disclosure statement dated within one year
plus 120 days prior to the due date of the time of renewal of a certificate of
authority required by this chapter, shall be considered current.
(b)
The annual statement shall be in such form as the department prescribes and
shall contain at least the following:
(1)
Financial statements audited by an independent certified public accountant,
which shall contain, for two or more fiscal years if the facility has been in
existence that long, the following:
(A)
An accountant's opinion and, in accordance with generally accepted accounting
principles:
(I)
A balance sheet;
(ii)
A statement of income and expenses;
(iii)
A statement of equity or fund balances; and
(iv)
A statement of changes in financial position; and
(B)
Notes to the financial statements considered customary or necessary for full
disclosure or adequate understanding of the financial statements, financial
condition, and operation;
(2)
The following financial information:
(A)
A schedule giving additional information relating to property, plant, and
equipment having an original cost of at least $25,000.00 so as to show in
reasonable detail with respect to each separate facility original costs,
accumulated depreciation, net book value, appraised value or insurable value and
date thereof, insurance coverage, encumbrances, and net equity of appraised or
insured value over encumbrances. Any property not used in continuing care shall
be shown separately from property used in continuing care;
(B)
The level of participation in medicare or Medicaid programs, or
both;
(C)
A statement of all fees required of residents including, but not limited to, a
statement of the entrance fee charged, the monthly service charges, the proposed
application of the proceeds of the entrance fee by the provider, and the plan by
which the amount of the entrance fee is determined if the entrance fee is not
the same in all cases; and
(D)
Any change or increase in fees when the provider changes either the scope of, or
the rates for, care or services, regardless of whether the change involves the
basic rate or only those services available at additional costs to the resident;
and
(3)(c)
If the provider is an individual, the annual
revised
disclosure statement shall be sworn to by
the individual; if a limited partnership, by the general partner; if a
partnership other than a limited partnership, by all the partners; if any other
unincorporated association, by all its members or officers and directors; if a
trust, by all its trustees and officers; and, if a corporation, by the president
and secretary thereof.
33-45-7.
(a)
In addition to other provisions considered proper to effectuate any continuing
care agreement, addendum, or
amendment,
each such agreement, addendum, or amendment shall be in writing and
shall:
(1)
Provide for the continuing care of only one resident, or for two persons
occupying space designed for double occupancy under appropriate regulations
established by the provider, and shall
state the
total consideration to be paid, including
a list all properties transferred and
their market value at the time of transfer, including donations, subscriptions,
fees, and any other amounts paid or payable by, or on behalf of, the resident or
residents;
(2)
Specify all services which are to be provided by the provider to each resident,
including, in detail, all items which each resident will receive, whether the
items will be provided for a designated time period or for life, and whether the
services will be available on the premises or at another specified location.
The provider shall indicate which services or items are included in the
agreement for continuing care and which services or items are made available at
or by the facility at extra charge. Such items
shall
may
include, but are not limited to, food,
shelter
lodging,
personal services or nursing care, drugs, burial, and incidentals;
(3)
Estimate the number of residents of the facility to be provided
services;
(3)(4)
Describe the terms and conditions under which an agreement for continuing care
may be canceled by the provider or by a resident and the conditions, if any,
under which all or any portion of the entrance fee will be refunded in the event
of cancellation of the agreement by the provider or by the resident, including
the effect of
death of
or any change in the health or financial
condition of a person between the date of entering an agreement for continuing
care and the date of initial occupancy of a living unit by that
person;
(4)(5)
Describe:
(A)
The living quarters in which the resident will be living
independently;
(B)
Any property rights of the resident;
(C)
The
the
health and financial conditions required for a person to be accepted as a
resident and to continue as a resident, once accepted, including the effect of
any change in the health or financial condition of a person between the date of
entering into a continuing care agreement and the date of taking occupancy in a
living unit;
and
(D)
The conditions under which a living unit occupied by a resident may be made
available by the provider to a different or new resident other than on the death
of the prior resident;
(5)(E)
Describe
the
The policies
to be implemented and the circumstances
under which the resident will be permitted to remain in the facility in the
event of financial difficulties of the resident;
and
(F)
The procedures the provider shall follow to change the resident's accommodation
if necessary for the protection of the health or safety of the resident or the
general and economic welfare of the residents;
(6)
State the fees that will be charged if the resident marries while at the
designated facility, the terms concerning the entry of a spouse to the facility,
and the consequences if the spouse does not meet the requirements for
entry;
(7)
State whether the funds or property transferred for the care of the resident
is:
(A)
Nonrefundable, in which event the agreement shall comply with this subparagraph.
Such agreement shall allow a 90 day trial period of residency in the facility
during which time the provider, resident, or person who provided the transfer of
funds or property for the care of such resident may cancel the agreement after
written notice. A refund
must
shall
be made of such funds, property, or both within 120 days after the receipt of
such notice and shall be calculated on a pro rata basis with the provider
retaining no more than 10 percent of the amount of the entry fee.
Notwithstanding the provisions of this subparagraph, the provisions of paragraph
(8) of this
subsection,
and the provisions of subsections (b) and (e) of this Code section shall apply
to nonrefundable agreements; or
(B)
Refundable, in which event the agreement shall comply with this subparagraph.
Such agreement may be canceled upon the giving of written notice of cancellation
of at least 30 days by the provider, the resident, or the person who provided
the transfer of property or funds for the care of such resident; provided,
however,
that
if an agreement is canceled because there has been a good faith determination
that a resident is a danger to that resident or to others, only such notice as
is reasonable under the circumstances shall be required. The agreement shall
further provide in clear and understandable language, in print no smaller than
the largest type used in the body of the agreement, the terms governing the
refund of any portion of the entrance fee, which terms shall include a provision
that all refunds be made within 120 days of notification.
The agreement
shall further comply with the following requirements:
(i)
For a resident whose agreement with the facility provides that the resident does
not receive a transferable membership or ownership right in the facility and who
has occupied his
or
her unit, the refund shall be calculated
on a pro rata basis with the facility retaining no more than 2 percent per month
of occupancy by the resident and no more than a 4 percent fee for processing.
Such refund shall be paid no later than 120 days after the giving of notice of
intention to
cancel.;
or
(ii)
Alternatively,
if
If
the contract provides for the facility to retain no more than 1 percent per
month of occupancy by the resident, it may provide that such refund will be
payable upon receipt by the provider of the next entrance fee for any comparable
unit upon which there is no prior claim by any resident. Unless the provisions
of subsection (e) of this Code section apply, for any prospective resident,
regardless of whether or not such
a
resident receives a transferable membership or ownership right in the facility,
who cancels the agreement prior to occupancy of the
unit,
the refund shall be the entire amount paid toward the entrance fee, less a
processing fee not to exceed 4 percent of the entire entrance fee, but in no
event shall such processing fee exceed the amount paid by the prospective
resident. Such refund shall be paid no later than 60 days after the giving of
notice of intention to cancel. For a resident who has occupied his unit and who
has received a transferable membership or ownership right in the facility, the
foregoing refund provisions shall not apply but shall be deemed satisfied by the
acquisition or receipt of a transferable membership or an ownership right in the
facility. The provider shall not charge any fee for the transfer of membership
or sale of an ownership right;
(8)
State the terms under which an agreement is canceled by the death of the
resident. These terms may contain a provision that, upon the death of a
resident, the entrance fee of such resident shall be considered earned and shall
become the property of the provider. When the unit is shared, the conditions
with respect to the effect of the death or removal of one of the residents shall
be included in the agreement;
(9)
Require:
(A)
Describe
the policies which may lead to changes in monthly recurring and nonrecurring
charges or fees for goods and services
received. The agreement
shall
to
provide for advance notice to the resident, of not less than 60 days, before any
change in fees or charges or the scope of care or services may be effective,
except for changes required by state or federal assistance
programs;
(B)
A description of the manner by which the provider may adjust periodic charges or
other recurring fees and the limitations on these adjustments, if any;
and
(C)
A description of any policy regarding fee adjustments if the resident is
voluntarily absent from the facility;
(10)
Provide the location of other facilities, if any, which the provider owns or
operates in the State of Georgia;
(10)(11)
Provide that charges for care paid in one lump sum shall not be increased or
changed during the duration of the agreed upon care, except for changes required
by state or federal assistance programs;
(11)
Specify whether or not the facility is, or is affiliated with, a religious,
nonprofit, or proprietary organization or management entity, the extent to which
the affiliate organization will be responsible for the financial and contractual
obligations of the provider, and the provisions of the federal Internal Revenue
Code, if any, under which the provider or affiliate is exempt from the payment
of federal income tax; and
(12)
State any religious or charitable affiliations of the provider and the extent,
if any, to which the affiliate organization will be responsible for the
financial and contractual obligations of the provider; and
(12)(13)
Describe
the policy of the provider regarding reserve
funding
State that the
provider maintains an operating reserve in conformance with the requirements of
Code Section 33-45-10 or is not yet required to maintain an operating reserve
pursuant to that Code
section.
(b)
Notwithstanding
the provisions of subparagraph (a)(7)(A) of this Code section,
a
A
resident has the right to rescind a continuing care agreement
or other
agreement regulated by this chapter,
without penalty or forfeiture, within seven days after executing
the
such
agreement. During the seven-day period, the resident's funds shall be retained
in a separate escrow account under terms approved by the department. A resident
shall not be required to move into the facility designated in the agreement
before the expiration of the seven-day period.
If the
provider fails to meet the requirements for release of funds held in this escrow
account within a time period the Commissioner considers reasonable, these funds
shall be returned to the persons who have made payment to the provider. The
Commissioner shall notify the provider of the length of this time period when
the provider requests release of the funds.
(c)
The agreement shall include or shall be accompanied by a statement, printed in
boldface type, which reads: 'This facility and all other continuing care
facilities in this state are regulated by Chapter 45 of Title 33 of the Official
Code of Georgia Annotated. A copy of the law is on file in this facility. The
law gives you or your legal representative the right to inspect our most recent
annual statement before signing the agreement.'
(d)
Before the transfer of any money or other property, other than an application
fee which shall not exceed $1,500.00, to a provider by or on behalf of a
prospective resident, the provider shall present a typewritten or printed copy
of the agreement
and the
disclosure statement required pursuant to Code Section
33-45-9 to the prospective resident and
all other parties to the agreement. The provider shall secure a signed, dated
statement from each party to the contract certifying that a copy of the
agreement with the specified attachment as required pursuant to this chapter was
received.
(e)
If a resident dies before occupying the facility or, through illness, injury, or
incapacity, is precluded from becoming a resident under the terms of the
continuing care agreement, the agreement
is
shall
be automatically canceled, and the
resident or his
or
her legal representative shall receive a
full refund of all moneys paid to the facility, except those costs specifically
incurred by the facility at the request of the resident and set forth in writing
in a separate addendum, signed by both parties, to the agreement.
(f)
In order to comply with this Code section, a provider may furnish information
not contained in the continuing care agreement through an addendum.
33-45-8.
No
act, agreement, or statement of any resident, or of an individual purchasing
care for a resident, under any agreement to furnish care to the resident shall
constitute a valid waiver of any provision of this chapter intended for the
benefit or protection of the resident or the individual purchasing care for the
resident.
33-45-9.
(a)
Each facility shall maintain as public information, available upon request,
all annual
a copy of its
current disclosure statement and the
disclosure statements that have been filed
with the department
in the
previous years of operation.
(b)
Each facility shall post in a prominent position in the facility so as to be
accessible to all residents and to the general public a summary of the
latest
annual
disclosure
statement
required
pursuant to subsection (d) of this Code
section, indicating in the summary where
the full
annual
disclosure
statement may be inspected in the facility. A listing of any proposed changes
in policies, programs, and services shall also be posted.
(c)
Before entering into an agreement to furnish continuing care
or at the time
of, or prior to, the transfer of any money or other property to a provider by or
on behalf of a prospective resident, whichever occurs
first, the provider undertaking to furnish
the care, or the agent of the provider, shall
make full
disclosure and provide
the current
disclosure statement required pursuant to subsection (d) of this Code section
and copies to the prospective resident, or
his or
her legal representative, of the agreement
to furnish continuing care.
(d)
At the time of, or prior to, the execution of a contract to provide
continuing care, or at the time of, or prior to, the transfer of any money or
other property to a provider by or on behalf of a prospective resident,
whichever occurs first, the provider shall deliver a current disclosure
statement to the person with whom the contract is to be entered into, the text
of which shall contain at least:
(1)
The name and business address of the provider and a statement of whether the
provider is a partnership, corporation, or other type of legal
entity;
(2)
The names and business addresses of the officers, directors, trustees, managing
or general partners, any person having a 10 percent or greater equity or
beneficial interest in the provider, and any person who will be managing the
facility on a day-to-day basis and a description of these persons' interests in
or occupations with the provider;
(3)
The following information on all persons named in response to paragraph (2) of
this subsection:
(A)
A description of the business experience of the person, if any, in the operation
or management of similar facilities;
(B)
The name and address of any professional service firm, association, trust,
partnership, or corporation in which the person has, or which has in the person,
a 10 percent or greater interest and which it is presently intended shall
currently or in the future provide goods, leases, or services to the facility,
or to residents of the facility, of an aggregate value of $500.00 or more within
any year, including a description of the goods, leases, or services and the
probable or anticipated cost thereof to the facility, provider, or residents or
a statement that this cost cannot presently be estimated; and
(C)
A description of any matter in which the person has been convicted of a felony
or pleaded nolo contendere to a felony charge or been held liable or enjoined in
a civil action by final judgment, if the felony or civil action involved fraud,
embezzlement, fraudulent conversion, or misappropriation of property; or is
subject to a currently effective injunctive or restrictive court order or,
within the past five years, had any state or federal license or permit suspended
or revoked as a result of an action brought by a governmental agency or
department, if the order or action arose out of or related to business activity
of health care, including actions affecting a license to operate a foster care
facility, nursing home, retirement home, home for the aged, or facility subject
to this chapter or a similar law in another state;
(4)
A statement as to whether the provider is or is not affiliated with a religious,
charitable, or other nonprofit organization; the extent of the affiliation, if
any; the extent to which the affiliate organization will be responsible for the
financial and contract obligations of the provider; and the provision of the
Federal Internal Revenue Code, if any, under which the provider or affiliate is
exempt from the payment of income tax;
(5)
The location and description of the physical property or properties of the
facility, existing or proposed, and to the extent proposed, the estimated
completion date or dates, whether construction has begun, and the contingencies
subject to which construction may be deferred;
(6)
The provisions that have been made or will be made, including, but not limited
to, the requirements of Code Section 33-45-10, to provide reserve funding or
security to enable the provider to perform its obligations fully under contracts
to provide continuing care at the facility, including the establishment of
escrow accounts, trusts, or reserve funds, together with the manner in which
these funds will be invested, and the names and experience of any individuals in
the direct employment of the provider who will make the investment
decisions;
(7)
Financial statements of the provider certified to by an independent public
accountant as of the end of the most recent fiscal year or such shorter period
of time as the provider shall have been in existence. If the provider's fiscal
year ended more than 120 days prior to the date the disclosure statement is
recorded, interim financial statements as of a date not more than 90 days prior
to the date of recording the statement shall also be included, but need not be
certified to by an independent certified public accountant;
(8)
In the event the provider has had an actuarial report prepared within the prior
two years, the summary of a report of an actuary that estimates the capacity of
the provider to meet its contractual obligations to the residents;
(9)
Forecasted financial statements for the provider of the next five years,
including a balance sheet, a statement of operations, a statement of cash flows,
and a statement detailing all significant assumptions. Reporting routine,
categories, and structure may be further defined by regulations or forms adopted
by the Commissioner;
(10)
A financial statement audited by an independent certified public accountant
which shall contain, for two or more fiscal years if the facility has been in
existence that long, the following:
(A)
An accountant's opinion and, in accordance with generally accepted accounting
principles:
(i)
A balance sheet;
(ii)
A statement of income and expenses;
(iii)
A statement of equity or fund balances; and
(iv)
A statement of changes in financial position;
(B)
Notes to the financial statements considered customary or necessary for full
disclosure or adequate understanding of the financial statements, financial
condition, and operation; and
(C)
The following financial information:
(i)
A schedule giving additional information relating to property, plants, and
equipment having an original cost of at least $25,000.00 so as to show in
reasonable detail with respect to each separate facility original costs,
accumulated depreciation, net book value, appraised value or insurable value and
date thereof, insurance coverage, encumbrances, and net equity of appraised or
insured value over encumbrances. Any property not used in continuing care shall
be shown separately from property used in continuing care;
(ii)
The level of participation in medicare or Medicaid programs, or
both;
(iii)
A statement of all fees required of residents, including, but not limited to, a
statement of the entrance fee charged, the monthly service charges, the proposed
application of the proceeds of the entrance fee by the provider, and the plan by
which the amount of the entrance fee is determined if the entrance fee is not
the same in all cases; and
(iv)
Any change or increase in fees when the provider changes either the scope of, or
the rates for, care or services, regardless of whether the change involves the
basic rate or only those services available at additional costs to the resident;
and
(11)
If a facility is in a stage of being proposed or developed, it shall
additionally provide:
(A)
The summary of the report of an actuary estimating the capacity of the provider
to meet its contractual obligation to the residents; and
(B)
Narrative disclosure detailing all significant assumptions used in the
preparation of the forecasted financial statements, including:
(i)
Details of any long-term financing for the purchase or construction of the
facility, including interest rate, repayment terms, loan covenants, and assets
pledged;
(ii)
Details of any other funding sources that the provider anticipates using to fund
any start-up losses or to provide reserve funds to assure full performance of
the obligations of the provider under contracts for the provision of continuing
care;
(iii)
The total life occupancy fees to be received from or on behalf of residents at,
or prior to, commencement of operations along with anticipated accounting
methods used in the recognition of revenues from and expected refunds of life
occupancy fees;
(iv)
A description of any equity capital to be received by the facility;
(v)
The cost of the acquisition of the facility or, if the facility is to be
constructed, the estimated cost of the acquisition of the land and construction
cost of the facility;
(vi)
Related costs, such as financing any development costs that the provider expects
to incur or become obligated for prior to the commencement of
operations;
(vii)
The marketing and resident acquisition costs to be incurred prior to
commencement of operations; and
(viii)
A description of the assumptions used for calculating the estimated occupancy
rate of the facility and the effect on the income of the facility of government
subsidies for health care services.
(e)
The cover page of the disclosure statement shall state, in a prominent location
and in boldface type, the date of the disclosure statement, the last date
through which the disclosure statement may be delivered if not earlier revised,
and that the delivery of the disclosure statement to a contracting party before
the execution of a contract for the provision of continuing care is required by
this chapter but that the disclosure statement has not been reviewed or approved
by any government agency or representative to ensure accuracy or completeness of
the information set out.
(f)
A copy of the standard form of contract for continuing care used by the provider
shall be attached to each disclosure statement.
(g)(1)
The Commissioner may prescribe a standardized format for the disclosure
statement required by this Code section.
(2)
The Commissioner may also require the provider to submit to him or her a copy of
the standardized format for the disclosure statement and a copy of the
standardized form of contract for continuing care used by the provider.
Provided, however, that nothing in this paragraph shall prohibit the department
from requiring the submission of an individual contract between the continuing
care provider and the resident.
(h)
The disclosure statement shall be in plain English, printed in font no smaller
than ten point, and in language understandable by a layperson and combine
simplicity and accuracy to fully advise residents of the items required by this
Code section.
(i)
The department may require a provider to alter or amend its disclosure statement
in order to provide full and fair disclosure to prospective residents. The
department may also require the revision of a disclosure statement which it
finds to be unnecessarily complex, confusing, or illegible.
33-45-10.
(a)
In addition to the requirements of subsection (b) of Code Section 33-45-7, and
following the seven-day period in which the provider shall place funds in escrow
as required by such Code section, a provider shall ensure that the total amount
of any entrance fee, or any other fee or deposit paid by residents and
prospective residents, shall be placed in a separate account in accordance with
the provisions of this Code section and under terms approved by the department.
The terms of the account required by this subsection shall provide that funds
may be released only as follows:
(1)
When the agreement between a provider and resident or prospective resident
provides that funds deposited by such resident or prospective resident are
refundable, funds shall be released by the provider to such resident or
prospective resident upon the written request of such resident or prospective
resident requesting a refund of the payment made to the provider. The amount
refunded shall be the entire amount deposited or the amount initially deposited
less any withdrawal fee or fee that may be retained by the provider as permitted
pursuant to subparagraphs (a)(9)(A) and (a)(9)(B) of Code Section
33-45-7;
(2)
At the time a new project is financed or after the opening of a facility by a
provider, funds deposited by a resident or prospective resident may be remitted
to a trustee or mortgage holder of a financing instrument, if any, in order to
complete construction or reduce debt, so long as sufficient funds are withheld
to maintain the operating reserve required by this subsection;
(3)
Funds deposited by a resident or prospective resident may be released to a
financing trustee or mortgage holder when:
(A)
The provider has presold at least 50 percent of the independent living units,
having received a minimum 10 percent deposit on the presold units;
(B)
The provider has received a commitment for any permanent mortgage loan or other
long-term financing, and any conditions of the commitment prior to disbursement
of funds thereunder have been substantially satisfied; and
(C)
Aggregate entrance fees received or receivable by the provider pursuant to
binding continuing care contracts, plus the anticipated proceeds of any first
mortgage loan or other long-term financing commitment are equal to not less than
90 percent of the aggregate cost of constructing or purchasing, equipping, and
furnishing the facility plus not less than 90 percent of the funds estimated in
the statement of cash flows submitted by the provider as that part of the
disclosure statement required by this chapter, to be necessary to fund start-up
losses and assure full performance of the obligations of the provider pursuant
to continuing care contracts; or
(4)
When the provider submits a plan of reorganization that is accepted and approved
by the Commissioner.
(b)
A provider shall maintain an operating reserve in accordance with the following
requirements:
(1)
A provider shall maintain after the opening of a facility: an operating reserve
equal to 50 percent of the total operating costs of the facility forecasted for
the 12 month period following the period covered by the most recent disclosure
statement filed with the department. The forecast statements required by
paragraph (9) of subsection (d) of Code Section 33-45-9 shall serve as the basis
for computing the operating reserve. In addition to total operating expenses,
total operating costs shall include debt service, consisting of principal and
interest payments along with taxes and insurance on any mortgage loan or other
long-term financing, but shall exclude depreciation, amortized expenses, and
extraordinary items as approved by the Commissioner. If the debt service
portion is accounted for by way of another reserve account, the debt service
portion may be excluded. If a facility maintains an occupancy level in excess
of 90 percent, a provider shall only be required to maintain a 25 percent
operating reserve upon approval of the Commissioner, unless otherwise instructed
by the Commissioner. The operating reserve may be funded by cash, by invested
cash, or by investment grade securities, including bonds, stocks, United States
Treasury obligations, or obligations of United States government
agencies;
(2)
A provider shall maintain the operating reserve required by this subsection for
a facility no later than five years after the facility reaches an occupancy rate
of 95 percent or higher in lodging in which residents live independently;
and
(3)
An operating reserve shall only be released upon the submittal of a detailed
request from the provider or facility and shall be approved by the Commissioner.
Such requests shall be submitted in writing for the Commissioner to review at
least ten business days prior to the date of withdrawal.
33-45-11.
Any
resident injured by a violation of this chapter may bring an action for the
recovery of damages plus reasonable attorney's fees.
33-45-12.
(a)
If, at any time, the Commissioner determines, after notice and an opportunity
for the provider to be heard, that:
(1)
A provider has been or will be unable, in such a manner as may endanger the
ability of the provider to fully perform its obligations pursuant to contracts
for continuing care, to meet the forecasted financial data previously filed by
the provider;
(2)
A provider has failed to maintain the escrow account deposits or an operating
reserve required by Code Section 33-45-10, or otherwise not complied with the
requirements of such Code section under this chapter; or
(3)
A provider is bankrupt or insolvent, or in imminent danger of becoming bankrupt
or insolvent;
the
Commissioner may commence a supervision proceeding pursuant to applicable law or
may apply to the Superior Court of Fulton County or to the federal bankruptcy
court that may have previously taken jurisdiction over the provider or facility
for an order directing the Commissioner or authorizing the Commissioner to
rehabilitate or to liquidate a facility in accordance with law.
(b)
If, at any time, the court finds, upon petition of the Commissioner or provider
or on its own motion, that the objectives of an order to rehabilitate a provider
have been accomplished and that the facility or facilities owned by, or operated
by, the provider can be returned to the provider's management without further
jeopardy to the residents of the facility or facilities, the court may, upon a
full report and accounting of the conduct of the provider's affairs during the
rehabilitation and of the provider's current financial condition, terminate the
rehabilitation and, by order, return the facility or facilities owned by, or
operated by, the provider, along with the assets and affairs of the provider, to
the provider's management.
(c)
In applying for an order to rehabilitate or liquidate a provider, the
Commissioner shall give due consideration in the application to the manner in
which the welfare of persons who have previously contracted with the provider
for continuing care may be best served.
(d)
An order for rehabilitation may be refused or vacated if the provider posts a
bond, by a recognized surety authorized to do business in this state and
executed in favor of the Commissioner on behalf of persons who may be found
entitled to a refund of entrance fees from the provider or other damages in the
event the provider is unable to fulfill its contracts to provide continuing care
at the facility or facilities, in an amount determined by the court to be equal
to the reserve funding that would otherwise need to be available to fulfill such
obligations.
33-45-10.
33-45-13.
(a)
Any person who knowingly maintains, enters into, performs, or, as manager or
officer or in any other administrative capacity, assists in entering into,
maintaining, or performing any continuing care agreement subject to this chapter
without a valid certificate of authority or renewal thereof, as contemplated by
or provided in this chapter, or who otherwise violates any provision of this
chapter, is guilty of a misdemeanor. Each violation of this chapter constitutes
a separate offense.
(b)
The
In addition to
the powers granted pursuant to Chapters 1 and 2 of this title, the
department may bring an action to enjoin a
violation, threatened violation, or continued violation of this chapter in the
superior court of the county in which the violation occurred, is occurring, or
is about to occur.
(c)
Any action brought by the department against a provider shall not abate by
reason of a sale or other transfer of ownership of the facility used to provide
care, which provider is a party to the action, except with the express written
consent of the Commissioner
of
Insurance.
33-45-12.
33-45-14.
Any
contract or agreement for continuing care executed before July 1, 1991, which is
amended or renewed subsequent to July 1, 1991, and any contract or agreement for
continuing care executed on or after July 1, 1991, is subject to this
chapter."
SECTION
2.
All
laws and parts of laws in conflict with this Act are repealed.