Bill Text: FL S0438 | 2018 | Regular Session | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Continuing Care Contracts
Spectrum: Bipartisan Bill
Status: (Failed) 2018-03-10 - Died in Rules [S0438 Detail]
Download: Florida-2018-S0438-Introduced.html
Bill Title: Continuing Care Contracts
Spectrum: Bipartisan Bill
Status: (Failed) 2018-03-10 - Died in Rules [S0438 Detail]
Download: Florida-2018-S0438-Introduced.html
Florida Senate - 2018 SB 438 By Senator Lee 20-00386-18 2018438__ 1 A bill to be entitled 2 An act relating to continuing care contracts; amending 3 s. 651.011, F.S.; defining and redefining terms; 4 amending s. 651.012, F.S.; conforming a cross 5 reference; deleting an obsolete date; amending s. 6 651.013, F.S.; revising applicability of specified 7 provisions of the Florida Insurance Code as to the 8 Office of Insurance Regulation’s authority to regulate 9 providers of continuing care and continuing care at 10 home; amending s. 651.019, F.S.; revising notice and 11 filing requirements for providers and facilities with 12 respect to new and additional financing and 13 refinancing; amending s. 651.021, F.S.; conforming 14 provisions to changes made by the act; amending s. 15 651.022, F.S.; revising information required in an 16 application for a provisional certificate of 17 authority; specifying requirements for application 18 amendments if material changes occur; revising 19 procedures and requirements for the office’s review of 20 such applications; making technical changes; amending 21 s. 651.023, F.S.; revising requirements for an 22 application for a certificate of authority; revising 23 procedures and requirements for the office’s review of 24 such applications; conforming provisions to changes 25 made by the act; conforming cross-references; amending 26 s. 651.024, F.S.; providing and revising applicability 27 of certain requirements for a person seeking to 28 acquire or assume a specified role of a provider or 29 seeking specified ownership, possession, or control of 30 a provider’s assets; providing applicability of 31 certain requirements for a person seeking to acquire 32 and become the provider for a facility; providing 33 procedures for filing a disclaimer of control; 34 providing construction; creating s. 651.0245, F.S.; 35 prohibiting a person, without the office’s prior 36 written approval, from acquiring a facility operating 37 under a subsisting certificate of authority and 38 engaging in the business of providing continuing care; 39 specifying requirements for an application for the 40 simultaneous acquisition of a facility and issuance of 41 a certificate of authority and for the applicant; 42 defining terms; providing standing to the office to 43 petition a specified circuit court under certain 44 circumstances; providing procedures for filing a 45 disclaimer of control; providing construction; 46 requiring and authorizing the Financial Services 47 Commission to adopt, amend, and repeal rules; creating 48 s. 651.0246, F.S.; requiring written approval from the 49 office before construction or marketing for specified 50 expansions of a certificated facility may commence; 51 providing applicability; specifying application 52 requirements; requiring the office to consider certain 53 factors in reviewing such applications; specifying 54 requirements for moneys to be escrowed and for the 55 release of the moneys; defining the term “initial 56 entrance fee”; providing procedures and requirements 57 for the office’s review of applications; providing 58 construction; creating s. 651.025, F.S.; prohibiting 59 persons who served in specified capacities with 60 insolvent facilities or providers within a specified 61 timeframe from thereafter serving in such capacities, 62 except under certain circumstances; amending s. 63 651.026, F.S.; revising requirements for annual 64 reports filed with the office by providers and 65 facilities; amending s. 651.0261, F.S.; revising 66 requirements for quarterly statements filed with the 67 office by providers and facilities; authorizing the 68 office to require, under certain circumstances, 69 providers or facilities to file monthly statements and 70 certain other information; authorizing the commission 71 to adopt rules; amending s. 651.033, F.S.; revising 72 requirements for and restrictions on agents of escrow 73 accounts; revising permissible investments for funds 74 in an escrow account; creating s. 651.034, F.S.; 75 specifying requirements for providers if a company 76 information level event occurs; specifying procedures 77 and requirements for the office’s review of provider 78 company information reports; requiring the office to 79 take specified actions if a regulatory action level 80 event occurs; authorizing the office to retain 81 consultants for specified purposes; requiring affected 82 providers or parties directed by the office to bear 83 fees, costs, and expenses for such consultants; 84 requiring and authorizing the office to take certain 85 actions if an impairment occurs; requiring the office 86 to transmit any notice that may result in regulatory 87 action; providing construction; authorizing the 88 commission to adopt rules; authorizing the office to 89 exempt a provider from specified requirements under 90 certain circumstances; amending s. 651.035, F.S.; 91 revising provider minimum liquid reserve requirements 92 under specified circumstances; deleting an obsolete 93 date; authorizing providers to withdraw funds from 94 specified reserves with the office’s consent; 95 providing procedures and requirements to request 96 approval for certain withdrawals; providing procedures 97 and requirements for the office’s review of such 98 requests; authorizing the office, under certain 99 circumstances, to order the immediate transfer of 100 funds in the minimum liquid reserve to the custody of 101 the Department of Financial Services; requiring 102 facilities to file annual calculations of their 103 minimum liquid reserves with the office and maintain 104 such reserves beginning at specified periods; creating 105 s. 651.043, F.S.; defining the term “management”; 106 providing requirements for a contract for management; 107 specifying procedures and requirements for providers 108 filing notices of change in management with the 109 office; specifying procedures and requirements for the 110 office’s review of such changes; requiring management 111 disapproved by the office to be removed within a 112 specified timeframe; authorizing the office to take 113 certain disciplinary actions; requiring providers to 114 immediately remove management under certain 115 circumstances; amending s. 651.051, F.S.; requiring 116 all provider records and assets to be maintained in 117 this state; requiring the office’s prior approval for 118 a certain electronic storage platform; amending s. 119 651.057, F.S.; conforming a cross-reference; amending 120 s. 651.071, F.S.; revising construction as to the 121 priority of continuing care and continuing care at 122 home contracts in the event of receivership or 123 liquidation proceedings against a provider; amending 124 s. 651.091, F.S.; revising requirements for continuing 125 care facilities and providers relating to the 126 availability, distribution, and posting of reports and 127 records; amending s. 651.105, F.S.; providing 128 applicability of a provision of the Insurance Code 129 relating to examinations and investigations to the 130 office’s authority in examining certain applicants and 131 providers; authorizing the office to examine certain 132 parents, subsidiaries, or affiliates to ascertain the 133 financial condition of a provider; creating s. 134 651.1055, F.S.; requiring providers to cooperate with 135 the office; amending s. 651.106, F.S.; authorizing the 136 office to deny an application on certain grounds; 137 revising and adding grounds for application denial or 138 disciplinary action by the office; creating s. 139 651.1065, F.S.; prohibiting certain persons of a 140 continuing care retirement community, except with the 141 office’s written permission, from permitting the 142 retirement community to solicit or accept new 143 continuing care contracts if they knew or should have 144 known that the retirement community was impaired or 145 insolvent; providing a criminal penalty; amending s. 146 651.111, F.S.; authorizing residents to file 147 complaints that include requests for an inspection of 148 a provider’s records and related financial affairs; 149 revising procedures of and requirements for the 150 office’s review and response to such complaints; 151 amending s. 651.114, F.S.; authorizing the office to 152 request that a provider make a plan for obtaining 153 compliance or solvency in delinquency proceedings; 154 providing construction; defining the term “impaired”; 155 requiring a provider to provide, within a specified 156 timeframe, a certain notice to residents after the 157 initiation of a delinquency proceeding; providing 158 procedures and requirements for providers in 159 delinquency proceedings; revising conditions under 160 which the office’s rights are subordinate to the 161 rights of a trustee or lender pursuant to certain 162 instruments; creating s. 651.1141, F.S.; providing 163 that violations of certain provisions constitute an 164 immediate danger to the public health, safety, or 165 welfare; authorizing the office to issue an immediate 166 final order to cease and desist from such violations; 167 amending s. 651.1151, F.S.; requiring providers to 168 submit to the office certain administrative, vendor, 169 and management contracts; authorizing the office to 170 disapprove such contracts under certain circumstances; 171 deleting an obsolete date; amending s. 651.121, F.S.; 172 revising the composition of the Continuing Care 173 Advisory Council; amending s. 651.125, F.S.; providing 174 a criminal penalty for certain actions performed 175 without a valid provisional certificate of authority; 176 making a technical change; providing an effective 177 date. 178 179 Be It Enacted by the Legislature of the State of Florida: 180 181 Section 1. Section 651.011, Florida Statutes, is amended to 182 read: 183 651.011 Definitions.—As used in this chapter, the term: 184 (1) “Actuarial opinion” means an opinion issued by an 185 actuary in accordance with the standards of practice adopted by 186 the Actuarial Standards Board. 187 (2) “Actuarial study” means an analysis addressing the 188 current actuarial financial condition of a provider or the 189 projected actuarial financial condition of an applicant, which 190 is performed by an actuary in accordance with accepted actuarial 191 principles and the standards of practice adopted by the 192 Actuarial Standards Board and which includes all of the 193 following: 194 (a) An actuarial report. 195 (b) A statement of actuarial opinion. 196 (c) An actuarial balance sheet. 197 (d) A cohort pricing analysis. 198 (e) A cash-flow projection. 199 (f) A description of the actuarial methodology, formulas, 200 and assumptions used in the study. 201 (g) Other information as reasonably requested by the 202 office. 203 (3) “Actuary” means an individual who is qualified to sign 204 an actuarial opinion in accordance with the American Academy of 205 Actuaries’ qualification standards and who is a member in good 206 standing of the American Academy of Actuaries. 207 (4)(1)“Advertising” means the dissemination of written, 208 visual, or electronic information by a provider, or any person 209 affiliated with or controlled by a provider, to potential 210 residents or their representatives for the purpose of inducing 211 such persons to subscribe to or enter into a contract for 212 continuing care or continuing care at-home. 213 (5) “Company information level event” means that any of the 214 following has occurred: 215 (a) A provider’s debt service coverage ratio is less than 216 1.3:1. 217 (b) A provider’s days cash on hand is less than 125. 218 (c) The occupancy at a provider’s facility is less than 80 219 percent, unless the provider’s debt service coverage ratio is 220 greater than 3:1 or the provider’s days cash on hand is greater 221 than 365. 222 (6)(2)“Continuing care” or “care” means, pursuant to a 223 contract, furnishing shelter and nursing care or personal 224 services to a resident who resides in a facility, whether such 225 nursing care or personal services are provided in the facility 226 or in another setting designated in the contract for continuing 227 care, by an individual not related by consanguinity or affinity 228 to the resident, upon payment of an entrance fee. 229 (7)(3)“Continuing Care Advisory Council” or “advisory 230 council” means the council established in s. 651.121. 231 (8)(4)“Continuing care at-home” means, pursuant to a 232 contract other than a contract described in subsection (6)(2), 233 furnishing to a resident who resides outside the facility the 234 right to future access to shelter and nursing care or personal 235 services, whether such services are provided in the facility or 236 in another setting designated in the contract, by an individual 237 not related by consanguinity or affinity to the resident, upon 238 payment of an entrance fee. 239 (9) “Corrective order” means an order issued by the office 240 which specifies corrective actions the office has determined are 241 required. 242 (10) “Days cash on hand” means the quotient reached by 243 dividing the value of the sum in paragraph (a) by the value of 244 the quotient in paragraph (b): 245 (a) The sum of unrestricted cash, unrestricted short- and 246 long-term investments, and the minimum liquid reserve, where 247 unrestricted cash, unrestricted short- and long-term 248 investments, and minimum liquid reserve are as of the reporting 249 date. 250 (b) Operating expenses less depreciation and amortization, 251 divided by 365. Operating expenses, depreciation, and 252 amortization are each the sum of their respective values over 253 the prior 12 months ending with the reporting date. 254 255 With prior written approval of the office, a demand note or 256 other parental guarantee may be considered a short- or long-term 257 investment for the purposes of paragraph (a). However, the total 258 of all demand notes issued by the parent may not, at any time, 259 be more than the sum of unrestricted cash and unrestricted 260 short- and long-term investments held by the parent. 261 (11) “Debt service coverage ratio” means the quotient 262 reached by dividing the value of the difference in paragraph (a) 263 by the value of the sum in paragraph (b): 264 (a) The sum of total expenses less interest expense on the 265 facility, depreciation, and amortization, subtracted from the 266 sum of total revenues and gross entrance fees received less 267 earned entrance fees and refunds paid. Expenses, interest 268 expense on the facility, depreciation, amortization, revenues, 269 gross entrance fees, earned entrance fees, and refunds are each 270 the sum of their respective values over the prior 12 months 271 ending with the reporting date. 272 (b) Total annual principal and interest expense due on the 273 facility. Principal is as of the reporting date and interest due 274 is the sum of the interest over the prior 12 months ending with 275 the reporting date. 276 (12)(5)“Entrance fee” means an initial or deferred payment 277 of a sum of money or property made as full or partial payment 278 for continuing care or continuing care at-home. An accommodation 279 fee, admission fee, member fee, or other fee of similar form and 280 application are considered to be an entrance fee. 281 (13)(6)“Facility” means a place where continuing care is 282 furnished and may include one or more physical plants on a 283 primary or contiguous site or an immediately accessible site. As 284 used in this subsection, the term “immediately accessible site” 285 means a parcel of real property separated by a reasonable 286 distance from the facility as measured along public 287 thoroughfares, and the term “primary or contiguous site” means 288 the real property contemplated in the feasibility study required 289 by this chapter. 290 (14)(7)“Generally accepted accounting principles” means 291 those accounting principles and practices adopted by the 292 Financial Accounting Standards Board and the American Institute 293 of Certified Public Accountants, including Statement of Position 294 90-8 with respect to any full year to which the statement 295 applies. 296 (15) “Impaired” means that any of the following have 297 occurred: 298 (a) A provider has failed to maintain its minimum liquid 299 reserve as required in s. 651.035, unless the provider has 300 received prior written approval from the office for a withdrawal 301 pursuant to s. 651.035(6) and is compliant with the approved 302 payment schedule; or 303 (b) Beginning January 1, 2020: 304 1. A provider’s debt service coverage ratio is less than 305 1.3:1, the provider’s days cash on hand is less than 125, and 306 the occupancy at the provider’s facility is less than 80 307 percent; 308 2. A provider’s debt service coverage ratio is less than 309 1:1; or 310 3. A provider’s days cash on hand is less than 60. 311 (16)(8)“Insolvency” means the condition in which athe312 provider is unable to pay its obligations as they come due in 313 the normal course of business. 314 (17)(9)“Licensed” means that atheprovider has obtained a 315 certificate of authority from the officedepartment. 316 (18) “Manager” or “management company” means a person who 317 administers the day-to-day business operations of a facility for 318 a provider, subject to the policies, directives, and oversight 319 of the provider. 320 (19)(10)“Nursing care” means those services or acts 321 rendered to a resident by an individual licensed or certified 322 pursuant to chapter 464. 323 (20) “Occupancy” means the total number of occupied units 324 in a facility divided by the total number of units in the 325 facility. 326 (21)(11)“Personal services” has the same meaning as in s. 327 429.02. 328 (22)(12)“Provider” means the owner or operator, whether a 329 natural person, partnership or other unincorporated association, 330 however organized, trust, or corporation, of an institution, 331 building, residence, or other place, whether operated for profit 332 or not, which owner or operator provides continuing care or 333 continuing care at-home for a fixed or variable fee, or for any 334 other remuneration of any type, whether fixed or variable, for 335 the period of care, payable in a lump sum or lump sum and 336 monthly maintenance charges or in installments. The term does 337 not apply to an entity that has existed and continuously 338 operated a facility located on at least 63 acres in this state 339 providing residential lodging to members and their spouses for 340 at least 66 years on or before July 1, 1989, and has the 341 residential capacity of 500 persons, is directly or indirectly 342 owned or operated by a nationally recognized fraternal 343 organization, is not open to the public, and accepts only its 344 members and their spouses as residents. 345 (23)(13)“Records” means all documents, correspondence, and 346the permanentfinancial, directory, and personnel information 347 and data maintained by a provider pursuant to this chapter, 348 regardless of the physical form, characteristics, or means of 349 transmission. 350 (24) “Regulatory action level event” means that any two of 351 the following have occurred: 352 (a) The provider’s debt service coverage ratio is less than 353 1.3:1. 354 (b) The provider’s days cash on hand is less than 125. 355 (c) The occupancy at the provider’s facility is less than 356 80 percent. 357 (25)(14)“Resident” means a purchaser of, a nominee of, or 358 a subscriber to a continuing care or continuing care at-home 359 contract. Such contract does not give the resident a part 360 ownership of the facility in which the resident is to reside, 361 unless expressly provided in the contract. 362 (26)(15)“Shelter” means an independent living unit, room, 363 apartment, cottage, villa, personal care unit, nursing bed, or 364 other living area within a facility set aside for the exclusive 365 use of one or more identified residents. 366 Section 2. Section 651.012, Florida Statutes, is amended to 367 read: 368 651.012 Exempted facility; written disclosure of 369 exemption.—Any facility exempted under ss. 632.637(1)(e) and 370 651.011(22)651.011(12)must provide written disclosure of such 371 exemption to each person admitted to the facilityafter October3721, 1996. This disclosure must be written using language likely 373 to be understood by the person and must briefly explain the 374 exemption. 375 Section 3. Subsection (2) of section 651.013, Florida 376 Statutes, is amended to read: 377 651.013 Chapter exclusive; applicability of other laws.— 378 (2) In addition to other applicable provisions cited in 379 this chapter, the office has the authority granted under ss. 380 624.302 and 624.303, 624.307-624.312, 624.318624.308-624.312, 381 624.319(1)-(3), 624.320-624.321, 624.324,and624.34, and 382 624.422 of the Florida Insurance Code to regulate providers of 383 continuing care and continuing care at-home. 384 Section 4. Section 651.019, Florida Statutes, is amended to 385 read: 386 651.019 New financing, additional financing, or 387 refinancing.— 388 (1)(a) A provider shall provide notice to the residents’ 389 council of any new financing or refinancing at least 30 days 390 before the closing date of the financing or refinancing 391 transaction. The notice must include a general outline and the 392 intended use of proceeds. 393 (b) If the facility does not have a residents’ council, the 394 facility must make available, in the same manner as other 395 community notices, the information required by paragraph (a) 396After issuance of a certificate of authority, the provider shall397submit to the office a general outline, including intended use398of proceeds, with respect to any new financing, additional399financing, or refinancing at least 30 days before the closing400date of such financing transaction. 401 (2) Within 30 days after the closing date of such financing 402 or refinancing transaction,The provider shall furnish any403information the office may reasonably request in connection with404any new financing, additional financing, or refinancing,405including, but not limited to, the financing agreements and any406related documents, escrow or trust agreements, and statistical407or financial data.the provider shallalsosubmit to the office 408 copies of executed financing documents, any related documents, 409 escrow or trust agreements, and statistical or financial data 410 prepared in support of such financing or refinancing 411 transaction, and a copy of all documents required to be 412 submitted to the residents’ council under paragraph (1)(a) 413within 30 days after the closing date. 414 Section 5. Section 651.021, Florida Statutes, is amended to 415 read: 416 651.021 Certificate of authority required.— 417(1)ANoperson may not engage in the business of providing 418 continuing care, issuing contracts for continuing care or 419 continuing care at-home, or constructing a facility for the 420 purpose of providing continuing care in this state without a 421 certificate of authority obtained from the office as provided in 422 this chapter. This sectionsubsectiondoes not prohibit the 423 preparation of a construction site or construction of a model 424 residence unit for marketing purposes, or both. The office may 425 allow the purchase of an existing building for the purpose of 426 providing continuing care if the office determines that the 427 purchase is not being made to circumvent the prohibitions in 428 this section. 429(2) Written approval must be obtained from the office430before commencing construction or marketing for an expansion of431a certificated facility equivalent to the addition of at least43220 percent of existing units or 20 percent or more in the number433of continuing care at-home contracts. This provision does not434apply to construction for which a certificate of need from the435Agency for Health Care Administration is required.436(a) For providers that offer both continuing care and437continuing care at-home, the 20 percent is based on the total of438both existing units and existing contracts for continuing care439at-home. For purposes of this subsection, an expansion includes440increases in the number of constructed units or continuing care441at-home contracts or a combination of both.442(b) The application for such approval shall be on forms443adopted by the commission and provided by the office. The444application must include the feasibility study required by s.445651.022(3) or s. 651.023(1)(b) and such other information as446required by s. 651.023. If the expansion is only for continuing447care at-home contracts, an actuarial study prepared by an448independent actuary in accordance with standards adopted by the449American Academy of Actuaries which presents the financial450impact of the expansion may be substituted for the feasibility451study.452(c) In determining whether an expansion should be approved,453the office shall use the criteria provided in ss. 651.022(6) and454651.023(4).455 Section 6. Subsection (2), paragraph (b) of subsection (5), 456 and subsections (6) and (8) of section 651.022, Florida 457 Statutes, are amended to read: 458 651.022 Provisional certificate of authority; application.— 459 (2) The application for a provisional certificate of 460 authority mustshallbe on a form prescribed by the commission 461 and mustshallcontain the following information: 462 (a) If the applicant or provider is a corporation, a copy 463 of the articles of incorporation and bylaws; if the applicant or 464 provider is a partnership or other unincorporated association, a 465 copy of the partnership agreement, articles of association, or 466 other membership agreement; and, if the applicant or provider is 467 a trust, a copy of the trust agreement or instrument. 468 (b) The full names, residences, and business addresses of: 469 1. The proprietor, if the applicant or provider is an 470 individual. 471 2. Every partner or member, if the applicant or provider is 472 a partnership or other unincorporated association, however 473 organized, having fewer than 50 partners or members, together 474 with the business name and address of the partnership or other 475 organization. 476 3. The principal partners or members, if the applicant or 477 provider is a partnership or other unincorporated association, 478 however organized, having 50 or more partners or members, 479 together with the business name and business address of the 480 partnership or other organization. If such unincorporated 481 organization has officers and a board of directors, the full 482 name and business address of each officer and director may be 483 set forth in lieu of the full name and business address of its 484 principal members. 485 4. The corporation and each officer and director thereof, 486 if the applicant or provider is a corporation. 487 5. Every trustee and officer, if the applicant or provider 488 is a trust. 489 6. The manager, whether an individual, corporation, 490 partnership, or association. 491 7. Any stockholder holding at least a 10 percent interest 492 in the operations of the facility in which the care is to be 493 offered. 494 8. Any person whose name is required to be provided in the 495 application under this paragraph and who owns any interest in or 496 receives any remuneration from, directly or indirectly, any 497 professional service firm, association, trust, partnership, or 498 corporation providing goods, leases, or services to the facility 499 for which the application is made, with a real or anticipated 500 value of $10,000 or more, and the name and address of the 501 professional service firm, association, trust, partnership, or 502 corporation in which such interest is held. The applicant shall 503 describe such goods, leases, or services and the probable cost 504 to the facility or provider and shall describe why such goods, 505 leases, or services should not be purchased from an independent 506 entity. 507 9. Any person, corporation, partnership, association, or 508 trust owning land or property leased to the facility, along with 509 a copy of the lease agreement. 510 10. Any affiliated parent or subsidiary corporation or 511 partnership. 512 (c)1. Evidence that the persons described in paragraph (b) 513 are competent and trustworthyapplicant is reputable and of514responsible character. If the applicant is a firm, association, 515 organization, partnership, business trust, corporation, or 516 company, the form must furthershallrequire evidence that the 517 members or shareholdersare reputable and of responsible518character, and the person in charge of providing care under a 519 certificate of authority, are competent and trustworthyshall520likewise be required to produce evidence of being reputable and521of responsible character. 522 2. Evidence satisfactory to the office of the ability of 523 the applicant to comply withthe provisions ofthis chapter and 524 with rules adopted by the commission pursuant to this chapter. 525 3. A statement of whether a person identified in the 526 application for a provisional certificate of authority or the 527 administrator or manager of the facility, if such person has 528 been designated, or any such person living in the same location: 529 a. Has been convicted of a felony or has pleaded nolo 530 contendere to a felony charge, or has been held liable or has 531 been enjoined in a civil action by final judgment, if the felony 532 or civil action involved fraud, embezzlement, fraudulent 533 conversion, or misappropriation of property. 534 b. Is subject to a currently effective injunctive or 535 restrictive order or federal or state administrative order 536 relating to business activity or health care as a result of an 537 action brought by a public agency or department, including, 538 without limitation, an action affecting a license under chapter 539 400 or chapter 429. 540 541 The statement mustshallset forth the court or agency, the date 542 of conviction or judgment, and the penalty imposed or damages 543 assessed, or the date, nature, and issuer of the order. Before 544 determining whether a provisional certificate of authority is to 545 be issued, the office may make an inquiry to determine the 546 accuracy of the information submitted pursuant to subparagraphs 547 1., 2., and 3.1. and 2.548 (d) The contracts for continuing care and continuing care 549 at-home to be entered into between the provider and residents 550 which meet the minimum requirements of s. 651.055 or s. 651.057 551 and which include a statement describing the procedures required 552 by law relating to the release of escrowed entrance fees. Such 553 statement may be furnished through an addendum. 554 (e) Any advertisement or other written material proposed to 555 be used in the solicitation of residents. 556 (f) Such other reasonable data, financial statements, and 557 pertinent information as the commission or office may reasonably 558 require with respect to the provider or the facility, including 559 the most recent audited financial statements of comparable 560 facilities currently or previously owned, managed, or developed 561 by the applicant or its principal, to assist in determining the 562 financial viability of the project and the management 563 capabilities of its managers and owners. 564 (g) The forms of the residency contracts, reservation 565 contracts, escrow agreements, and wait list contracts, if 566 applicable, which are proposed to be used by the provider in the 567 furnishing of care. The office shall approve contracts and 568 escrow agreements that comply with ss. 651.023(1)(c), 651.033, 569 651.055, and 651.057. Thereafter, no other form of contract or 570 agreement may be used by the provider until it has been 571 submitted to the office and approved. 572 (h) An actuarial study. 573 574 If any material change occurs in the facts set forth in an 575 application filed with the office pursuant to this subsection, 576 an amendment setting forth such changes must be immediately 577 filed with the office, and a copy of the amendment must be sent 578 by registered mail to the principal office of the facility and 579 to the principal office of the controlling company. 580 (5) 581 (b) An application is deemed complete upon receipt of all 582 requested information and correction of any error or omission of 583 which the applicant was timely notified or when the time for 584 such notification has expired. The office shall notify the 585 applicant in writing of the date on which the application was 586 deemed completeWithin 15 days after receipt of all of the587requested additional information, the office shall notify the588applicant in writing that all of the requested information has589been received and the application is deemed to be complete as of590the date of the notice. Failure to so notify the applicant in591writing within the 15-day period shall constitute acknowledgment592by the office that it has received all requested additional593information, and the application shall be deemed to be complete594for purposes of review upon the date of the filing of all of the595requested additional information. 596 (6) Within 9045days after the date an application is 597 deemed complete as set forth in paragraph (5)(b), the office 598 shall complete its review and issue a provisional certificate of 599 authority to the applicant based upon its review and a 600 determination that the application meets all requirements of 601 law, that the feasibility study was based on sufficient data and 602 reasonable assumptions, and that the applicant will be able to 603 provide continuing care or continuing care at-home as proposed 604 and meet all financial and contractual obligations related to 605 its operations, including the financial requirements of this 606 chapter. If the application is denied, the office shall notify 607 the applicant in writing, citing the specific failures to meet 608 the provisions of this chapter. Such denial entitles the 609 applicant to a hearing pursuant to chapter 120. 610 (8) The office mayshallnot approve any application that 611whichincludes in the plan of financing any encumbrance of the 612operatingreserves required by this chapter. 613 Section 7. Paragraph (c) of subsection (1), subsections (2) 614 and (3), paragraph (a) of subsection (4), paragraph (b) of 615 subsection (5), and subsections (8) and (9) of section 651.023, 616 Florida Statutes, are amended, paragraph (i) is added to 617 subsection (1) of that section, and paragraph (a) of subsection 618 (1) of that section is republished, to read: 619 651.023 Certificate of authority; application.— 620 (1) After issuance of a provisional certificate of 621 authority, the office shall issue to the holder of such 622 provisional certificate a certificate of authority if the holder 623 of the provisional certificate provides the office with the 624 following information: 625 (a) Any material change in status with respect to the 626 information required to be filed under s. 651.022(2) in the 627 application for the provisional certificate. 628 (c) Subject to subsection (4), a provider may submit an 629 application for a certificate of authority and any required 630 exhibits upon submission of proof that the project has a minimum 631 of 5030percent of the units reserved for which the provider is 632 charging an entrance fee.This does not apply to an application633for a certificate of authority for the acquisition of a facility634for which a certificate of authority was issued before October6351, 1983, to a provider who subsequently becomes a debtor in a636case under the United States Bankruptcy Code, 11 U.S.C. ss. 101637et seq., or to a provider for which the department has been638appointed receiver pursuant to part II of chapter 631.639 (i) An actuarial study. 640 (2) Within 30 days after receipt of the information 641 required under subsection (1), the office shall examine such 642 information and notify the provider in writing, specifically 643 requesting any additional information the office is permitted by 644 law to require. An application is deemed complete upon receipt 645 of all requested information and correction of any error or 646 omission of which the applicant was timely notified or when the 647 time for such notification has expired. The office shall notify 648 the applicant in writing of the date on which the application 649 was deemed completeWithin 15 days after receipt of all of the650requested additional information, the office shall notify the651provider in writing that all of the requested information has652been received and the application is deemed to be complete as of653the date of the notice. Failure to notify the applicant in654writing within the 15-day period constitutes acknowledgment by655the office that it has received all requested additional656information, and the application shall be deemed complete for657purposes of review on the date of filing all of the required658additional information. 659 (3) Within 9045days after an application is deemed 660 complete as set forth in subsection (2), and upon completion of 661 the remaining requirements of this section, the office shall 662 complete its review and issue or deny a certificate of authority 663 to the holder of a provisional certificate of authority. If a 664 certificate of authority is denied, the office must notify the 665 holder of the provisional certificate in writing, citing the 666 specific failures to satisfy the provisions of this chapter. If 667 denied, the holder of the provisional certificate is entitled to 668 an administrative hearing pursuant to chapter 120. 669 (4) The office shall issue a certificate of authority upon 670 determining that the applicant meets all requirements of law and 671 has submitted all of the information required by this section, 672 that all escrow requirements have been satisfied, and that the 673 fees prescribed in s. 651.015(2) have been paid. 674 (a) ANotwithstanding satisfaction of the 30-percent675minimum reservation requirement of paragraph (1)(c), no676 certificate of authority may notshallbe issued until the 677 project has a minimum of 50 percent of the units reserved for 678 which the provider is charging an entrance fee, and proof is 679 provided to the office. If a provider offering continuing care 680 at-home is applying for a certificate of authorityor approval681of an expansion pursuant to s. 651.021(2), the same minimum 682 reservation requirements must be met for the continuing care and 683 continuing care at-home contracts, independently of each other. 684 (5) Up to 25 percent of the moneys paid for all or any part 685 of an initial entrance fee may be included or pledged for the 686 construction or purchase of the facility or as security for 687 long-term financing. The term “initial entrance fee” means the 688 total entrance fee charged by the facility to the first occupant 689 of a unit. 690 (b) For an expansion as provided in s. 651.0246s.691651.021(2), a minimum of 75 percent of the moneys paid for all 692 or any part of an initial entrance fee collected for continuing 693 care and 50 percent of the moneys paid for all or any part of an 694 initial fee collected for continuing care at-home shall be 695 placed in an escrow account or on deposit with the department as 696 prescribed in s. 651.033. 697 (8)The timeframes provided under s. 651.022(5) and (6)698apply to applications submitted under s. 651.021(2).The office 699 may not issue a certificate of authority to a facility that does 700 not have a component that is to be licensed pursuant to part II 701 of chapter 400 or to part I of chapter 429 or that does not 702 offer personal services or nursing services through written 703 contractual agreement. A written contractual agreement must be 704 disclosed in the contract for continuing care or continuing care 705 at-home and is subject tothe provisions ofs. 651.1151, 706 relating to administrative, vendor, and management contracts. 707 (9) The office may not approve an application that includes 708 in the plan of financing any encumbrance of theoperating709 reserves required by this chapter. 710 Section 8. Section 651.024, Florida Statutes, is amended to 711 read: 712 651.024 Acquisition.— 713 (1) A person who seeks to acquire a provider; assume the 714 role of general partner of a provider; or otherwise assume 715 ownership or possession of, or control over, 10 percent or more 716 of a provider’s assets isissued a certificate of authority to717operate a continuing care facility or a provisional certificate718of authority shall besubject tothe provisions ofs. 628.4615 719 and is not required to make filings pursuant to s. 651.022 or s. 720 651.023. 721 (2) A person who seeks to acquire, and become the provider 722 for, a facility is subject to s. 651.0245 and is not required to 723 make filings pursuant to ss. 628.4615, 651.022, and 651.023. 724 (3) A person may rebut a presumption of control by filing a 725 disclaimer of control with the office on a form prescribed by 726 the commission. The disclaimer must fully disclose all material 727 relationships and bases for affiliation between the person and 728 the provider or facility, as well as the basis for disclaiming 729 the affiliation. In lieu of such form, a person or acquiring 730 party may file with the office a copy of a Schedule 13G filed 731 with the Securities and Exchange Commission pursuant to Rule 732 13d-1(b) or (c), 17 C.F.R. s. 240.13d-1, under the Securities 733 Exchange Act of 1934, as amended. After a disclaimer has been 734 filed, the provider or facility is relieved of any duty to 735 register or report under this section which may arise out of the 736 provider’s or facility’s relationship with the person, unless 737 the office disallows the disclaimer. 738 Section 9. Section 651.0245, Florida Statutes, is created 739 to read: 740 651.0245 Application for the simultaneous acquisition of a 741 facility and issuance of a certificate of authority.— 742 (1) Except with the prior written approval of the office, a 743 person may not, individually or in conjunction with any 744 affiliated person of such person, directly or indirectly acquire 745 a facility operating under a subsisting certificate of authority 746 and engage in the business of providing continuing care. 747 (2) An applicant must: 748 (a) Comply with the notice requirements of s. 749 628.4615(2)(a); and 750 (b) File an application in the form required by the office 751 and cooperate with the office’s review of the application. 752 (3) The commission shall adopt by rule application 753 requirements equivalent to those described in ss. 628.4615(4) 754 and (5), 651.022(2)(a)-(g) and (3), and 651.023(1)(b). The 755 office shall review the application and issue an approval or 756 disapproval of the filing in accordance with ss. 628.4615(6)(a) 757 and (c), (7)-(12), (13)(c)-(e), and (14); 651.022(8); and 758 651.023(1)(b). 759 (4) As used in this section, the term: 760 (a) “Controlling company” means any corporation, trust, or 761 association that directly or indirectly owns 25 percent or more 762 of the voting securities of one or more facilities that are 763 stock corporations, or 25 percent or more of the ownership 764 interest of one or more facilities that are not stock 765 corporations. 766 (b) “Natural person” means an individual. 767 (c) “Person” includes a natural person, corporation, 768 association, trust, general partnership, limited partnership, 769 joint venture, firm, proprietorship, or any other entity that 770 may hold a license or certificate as a facility. 771 (5) In addition to the facility or the controlling party, 772 the office has standing to petition a circuit court as described 773 in s. 628.4615(9). 774 (6) A person may rebut a presumption of control by filing a 775 disclaimer of control with the office on a form prescribed by 776 the commission. The disclaimer must fully disclose all material 777 relationships and bases for affiliation between the person and 778 the provider or facility, as well as the basis for disclaiming 779 the affiliation. In lieu of such form, a person or acquiring 780 party may file with the office a copy of a Schedule 13G filed 781 with the Securities and Exchange Commission pursuant to Rule 782 13d-1(b) or (c), 17 C.F.R. s. 240.13d-1, under the Securities 783 Exchange Act of 1934, as amended. After a disclaimer has been 784 filed, the provider or facility is relieved of any duty to 785 register or report under this section which may arise out of the 786 provider’s or facility’s relationship with the person, unless 787 the office disallows the disclaimer. 788 (7) The commission may adopt, amend, or repeal rules 789 pursuant to chapter 120 as necessary to administer this section. 790 Section 10. Section 651.0246, Florida Statutes, is created 791 to read: 792 651.0246 Expansions.— 793 (1)(a) A provider must obtain written approval from the 794 office before commencing construction or marketing for an 795 expansion of a certificated facility equivalent to the addition 796 of at least 20 percent of existing units or 20 percent or more 797 in the number of continuing care at-home contracts. This section 798 does not apply to construction for which a certificate of need 799 from the Agency for Health Care Administration is required. 800 (b) The application for such approval must be on forms 801 adopted by the commission and provided by the office. The 802 application must include the feasibility study required by this 803 section and such other information as required by s. 651.023 or 804 as reasonably requested by the office. If the expansion is only 805 for continuing care at-home contracts, an actuarial study 806 prepared by an independent actuary in accordance with standards 807 adopted by the American Academy of Actuaries which presents the 808 financial impact of the expansion may be substituted for the 809 feasibility study. 810 (c) In determining whether an expansion should be approved, 811 the office shall consider: 812 1. Whether the application meets all requirements of law; 813 2. Whether the feasibility study was based on sufficient 814 data and reasonable assumptions; and 815 3. Whether the applicant will be able to provide continuing 816 care or continuing care at-home as proposed and meet all 817 financial obligations related to its operations, including the 818 financial requirements of this chapter. 819 820 If the application is denied, the office must notify the 821 applicant in writing, citing the specific failures to meet the 822 provisions of this chapter. Such denial entitles the applicant 823 to a hearing pursuant to chapter 120. 824 (2) A provider applying for expansion of a certificated 825 facility shall submit all of the following: 826 (a) An actuarial study. 827 (b) A feasibility study prepared by an independent 828 certified public accountant. The feasibility study must include 829 at least the following information: 830 1. A description of the facility and proposed expansion, 831 including the location, size, anticipated completion date, and 832 the proposed construction program. 833 2. An identification and evaluation of the primary and 834 secondary market areas of the facility and the projected unit 835 sales per month. 836 3. Projected revenues, including anticipated entrance fees; 837 monthly service fees; nursing care rates, if applicable; and all 838 other sources of revenue, including the total amount of debt 839 financing required. 840 4. Projected expenses, including for staffing requirements 841 and salaries; the cost of property, plant, and equipment, 842 including depreciation expense; interest expense; marketing 843 expense; and other operating expenses. 844 5. Current assets and liabilities of the applicant. 845 6. Expectations of the financial condition of the project, 846 including the projected cash flow and a projected balance sheet 847 and an estimate of the funds anticipated to be necessary to 848 cover startup losses. 849 7. The inflation factor, if any, assumed in the study for 850 the proposed expansion and how and where it is applied. 851 8. Project costs, marketing projections, resident fees and 852 charges, the competition, resident contract provisions, and 853 other factors that affect the feasibility of the facility. 854 9. The name of the person who prepared the feasibility 855 study and the experience of such person in preparing similar 856 studies or otherwise consulting in the field of continuing care. 857 10. Financial forecasts or projections prepared in 858 accordance with standards adopted by the American Institute of 859 Certified Public Accountants or in accordance with standards for 860 feasibility studies for continuing care retirement communities 861 adopted by the Actuarial Standards Board. 862 11. An independent evaluation and examination opinion, or a 863 comparable opinion acceptable to the office, by the independent 864 certified public accountant who prepared the study, of the 865 underlying assumptions used as a basis for the forecasts or 866 projections in the study and that the assumptions are reasonable 867 and proper and the project as proposed is feasible. The 868 feasibility study must contain an examination opinion for the 869 first 3 years of operations, and financial projections having a 870 compilation opinion for the next 3 years. 871 (c) Such other reasonable data, financial statements, and 872 pertinent information as the commission or office may require 873 with respect to the applicant or the facility to determine the 874 financial status of the facility and the management capabilities 875 of its managers and owners. 876 (3) A minimum of 75 percent of the moneys paid for all or 877 any part of an initial entrance fee or reservation deposit 878 collected for continuing care and 50 percent of the moneys paid 879 for all or any part of an initial fee collected for continuing 880 care at-home must be placed in an escrow account or on deposit 881 with the department as prescribed in s. 651.033. Up to 25 882 percent of the moneys paid for all or any part of an initial 883 entrance fee or reservation deposit may be included or pledged 884 for the construction or purchase of the facility or as security 885 for long-term financing. As used in this section, the term 886 “initial entrance fee” means the total entrance fee charged by 887 the facility to the first occupant of a unit. 888 889 Entrance fees and reservation deposits collected for expansions 890 must be held pursuant to the escrow requirements of s. 891 651.023(5) and (6). 892 (4) The provider is entitled to secure release of the 893 moneys held in escrow within 7 days after receipt by the office 894 of an affidavit from the provider, along with appropriate copies 895 to verify, and notification to the escrow agent by certified 896 mail, that the following conditions have been satisfied: 897 (a) A certificate of occupancy has been issued. 898 (b) Payment in full has been received for at least 70 899 percent of the total units of a phase or of the total of the 900 combined phases constructed. If a provider offering continuing 901 care at-home is applying for a release of escrowed entrance 902 fees, the same minimum requirement must be met for the 903 continuing care and continuing care at-home contracts 904 independently of each other. 905 (c) The consultant who prepared the feasibility study 906 required by this section or a substitute approved by the office 907 certifies within 12 months before the date of filing for office 908 approval that there has been no material adverse change in 909 status with regard to the feasibility study. If a material 910 adverse change exists at the time of submission, sufficient 911 information acceptable to the office and the feasibility 912 consultant must be submitted which remedies the adverse 913 condition. 914 (d) Proof that commitments have been secured or that a 915 documented plan adopted by the applicant has been approved by 916 the office for long-term financing. 917 (e) Proof that the provider has sufficient funds to meet 918 the requirements of s. 651.035, which may include funds 919 deposited in the initial entrance fee account. 920 (f) Proof as to the intended application of the proceeds 921 upon release and proof that the entrance fees, when released, 922 will be applied as represented to the office. 923 924 Notwithstanding chapter 120, only the provider, the escrow 925 agent, and the office have a substantial interest in any office 926 decision regarding release of escrow funds in any proceedings 927 under chapter 120 or this chapter regarding the release of 928 escrow funds. 929 (5)(a) Within 30 days after receipt of an application for 930 expansion, the office shall examine the application and shall 931 notify the applicant in writing, specifically setting forth and 932 specifically requesting any additional information the office is 933 permitted by law to require. If the application submitted is 934 determined by the office to be substantially incomplete so as to 935 require substantial additional information, including 936 biographical information, the office may return the application 937 to the applicant with a written notice that the application as 938 received is substantially incomplete and therefore unacceptable 939 for filing without further action required by the office. Any 940 filing fee received must be refunded to the applicant. 941 (b) An application is deemed complete upon receipt of all 942 requested information and the correction of any error or 943 omission for which the applicant was timely notified or when the 944 time for such notification has expired. The office shall notify 945 the applicant in writing of the date on which the application 946 was deemed complete. 947 (6) Within 90 days after the date on which an application 948 is deemed complete as set forth in paragraph (5)(b), the office 949 shall complete its review and, based upon its review, approve an 950 expansion by the applicant and issue a determination that the 951 application meets all requirements of law, that the feasibility 952 study was based on sufficient data and reasonable assumptions, 953 and that the applicant will be able to provide continuing care 954 or continuing care at-home as proposed and meet all financial 955 and contractual obligations related to its operations, including 956 the financial requirements of this chapter. If the application 957 is denied, the office must notify the applicant in writing, 958 citing the specific failures to meet the provisions of this 959 chapter. Such denial entitles the applicant to a hearing 960 pursuant to chapter 120. 961 Section 11. Section 651.025, Florida Statutes, is created 962 to read: 963 651.025 Insolvent facilities or providers.—A person who was 964 a proprietor, general partner, member, officer, director, 965 trustee, or manager of an entity and who served in that capacity 966 within the 2-year period before the date the entity became 967 insolvent or bankrupt may not thereafter serve as a proprietor, 968 general partner, member, officer, director, trustee, or manager 969 of a facility or provider authorized in this state unless such 970 person demonstrates that his or her personal actions or 971 omissions were not a significant contributing cause to the 972 insolvency or bankruptcy. 973 Section 12. Present paragraph (f) of subsection (2) of 974 section 651.026, Florida Statutes, is redesignated as paragraph 975 (e), present paragraph (e) of subsection (2) and subsection (3) 976 of that section are amended, and paragraph (a) of subsection (2) 977 of that section is republished, to read: 978 651.026 Annual reports.— 979 (2) The annual report shall be in such form as the 980 commission prescribes and shall contain at least the following: 981 (a) Any change in status with respect to the information 982 required to be filed under s. 651.022(2). 983(e) Each facility shall file with the office annually,984together with the annual report required by this section, a985computation of its minimum liquid reserve calculated in986accordance with s. 651.035 on a form prescribed by the987commission.988 (3) The commission shall adopt by rule additional 989meaningfulmeasures of assessing the financial viability of a 990 provider. The rule may include the following factors: 991 (a)Debt service coverage ratios.992(b)Current ratios. 993 (b)(c)Adjusted current ratios. 994 (c)(d)Cash flows. 995(e) Occupancy rates.996 (d)(f)Other measures, ratios, or trends. 997 (e)(g)Other factors as may be appropriate. 998 Section 13. Section 651.0261, Florida Statutes, is amended 999 to read: 1000 651.0261 Quarterly and monthly statements.— 1001 (1) Within 45 days after the end of each fiscal quarter, 1002 each provider shall file a quarterly unaudited financial 1003 statement of the provider or of the facility in the form 1004 prescribed by rule of the commission and a detailed listing of 1005 the assets maintained in the liquid reserve as required under s. 1006 651.035. This requirement may be waived by the office upon 1007 written request from a provider accredited under s. 651.028. 1008 (2) If the office finds, pursuant to rules of the1009commission,that such information is needed to properly monitor 1010 the financial condition of a provider or facility or is 1011 otherwise needed to protect the public interest, the office may 1012 require the provider to file: 1013 (a) Within 25 days after the end of each month, a monthly 1014 unaudited financial statement of the provider or of the facility 1015 in the form prescribed by the commission by rule and a detailed 1016 listing of the assets maintained in the liquid reserve as 1017 required under s. 651.035, within 45 days after the end of each1018fiscal quarter, a quarterly unaudited financial statement of the1019provider or of the facility in the form prescribed by the1020commission by rule. The commission may by rule require all or1021part of the statements or filings required under this section to1022be submitted by electronic means in a computer-readable form1023compatible with the electronic data format specified by the1024commission. 1025 (b) Such other data, financial statements, and pertinent 1026 information as the commission or office may reasonably require 1027 with respect to the provider or the facility, or its directors, 1028 trustees, members, branches, subsidiaries, or affiliates, to 1029 determine the financial status of the provider or of the 1030 facility and the management capabilities of its managers and 1031 owners. 1032 (3) A filing under subsection (2) may be required if any of 1033 the following apply: 1034 (a) The facility has been operational for less than 2 1035 years. 1036 (b) The provider is: 1037 1. Subject to administrative supervision proceedings; 1038 2. Required to submit a company information report to the 1039 office pursuant to s. 651.034(1); 1040 3. Subject to a corrective action plan; 1041 4. Subject to refinancing; 1042 5. Subject to an acquisition; or 1043 6. Subject to delinquency or receivership proceedings. 1044 (c) The provider or facility displays a declining financial 1045 position. 1046 (4) The commission may by rule require all or part of the 1047 statements or filings required under this section to be 1048 submitted by electronic means in a computer-readable form 1049 compatible with an electronic data format specified by the 1050 commission. 1051 Section 14. Paragraphs (c) and (d) of subsection (1) and 1052 subsections (2) and (3) of section 651.033, Florida Statutes, 1053 are amended, and subsection (6) is added to that section, to 1054 read: 1055 651.033 Escrow accounts.— 1056 (1) When funds are required to be deposited in an escrow 1057 account pursuant to s. 651.022, s. 651.023, s. 651.035, or s. 1058 651.055: 1059 (c) Any agreement establishing an escrow account required 1060 underthe provisions ofthis chapter isshall besubject to 1061 approval by the office. The agreement mustshallbe in writing 1062 andshallcontain, in addition to any other provisions required 1063 by law, a provision whereby the escrow agent agrees to abide by 1064 the duties imposed by paragraphs (b) and (e), (3)(a), (3)(b), 1065 and (5)(a) and subsection (6)under this section. 1066 (d) All funds deposited in an escrow account, if invested, 1067 mustshallbe invested in cash, cash equivalents, mutual funds, 1068 equities, or investment grade bondsas set forth in part II of1069chapter 625; however, such investment may not diminish the funds 1070 held in escrow below the amount required by this chapter. Funds 1071 deposited in an escrow account are not subject to charges by the 1072 escrow agent except escrow agent fees associated with 1073 administering the accounts, or subject to any liens, judgments, 1074 garnishments, creditor’s claims, or other encumbrances against 1075 the provider or facility except as provided in s. 651.035(1). 1076 (2) Notwithstanding s. 651.035(7),In addition, the escrow1077agreement shall provide that the escrow agent or another person1078designated to act in the escrow agent’s place and the provider,1079except as otherwise provided in s. 651.035, shall notify the1080office in writing at least 10 days before the withdrawal of any1081portion of any funds required to be escrowed under the1082provisions of s. 651.035. However,in the event of an emergency 1083 and upon petition by the provider, the office maywaive the 101084day notification period andallow a withdrawal of up to 10 1085 percent of the required minimum liquid reserve. The office shall 1086 have 3 working days to deny the petition for the emergency 10 1087 percent withdrawal. If the office fails to deny the petition 1088 within 3 working days, the petition isshall bedeemed to have 1089 been granted by the office. For purposesthe purposeof this 1090 section, “working day” means each day that is not a Saturday, 1091 Sunday, or legal holiday as defined by Florida law. Also, for 1092 purposesthe purposeof this section, the day the petition is 1093 received by the office isshallnotbecounted as one of the 3 1094 days. 1095 (3)In addition,When entrance fees are required to be 1096 deposited in an escrow account pursuant to s. 651.022, s. 1097 651.023, or s. 651.055: 1098 (a) The provider shall deliver to the resident a written 1099 receipt. The receipt must show the payor’s name and address, the 1100 date, the price of the care contract, and the amount of money 1101 paid. A copy of each receipt, together with the funds, must 1102shallbe deposited with the escrow agent or as provided in 1103 paragraph (c). The escrow agent mustshallrelease such funds to 1104 the provider 7 days after the date of receipt of the funds by 1105 the escrow agent if the provider, operating under a certificate 1106 of authority issued by the office, has met the requirements of 1107 s. 651.023(6). However, if the resident rescinds the contract 1108 within the 7-day period, the escrow agent mustshallrelease the 1109 escrowed fees to the resident. 1110 (b) At the request of an individual resident of a facility, 1111 the escrow agent shall issue a statement indicating the status 1112 of the resident’s portion of the escrow account. 1113 (c) At the request of an individual resident of a facility, 1114 the provider may hold the check for the 7-day period and may 1115shallnot deposit it during this time period. If the resident 1116 rescinds the contract within the 7-day period, the check must 1117shallbe immediately returned to the resident. Upon the 1118 expiration of the 7 days, the provider shall deposit the check. 1119 (d) A provider may assess a nonrefundable fee, which is 1120 separate from the entrance fee, for processing a prospective 1121 resident’s application for continuing care or continuing care 1122 at-home. 1123 (6) Except as described in paragraph (3)(a), the escrow 1124 agent may not release or otherwise permit the transfer of funds 1125 without the written approval of the office. 1126 Section 15. Section 651.034, Florida Statutes, is created 1127 to read: 1128 651.034 Financial and operating requirements for 1129 providers.— 1130 (1)(a) If a company information level event occurs, the 1131 provider must provide the office with explanatory information 1132 and submit to the office a company information report, which 1133 must: 1134 1. Identify the conditions that contribute to the company 1135 information level event; 1136 2. Contain proposals of corrective actions that the 1137 provider intends to take and that are reasonably expected to 1138 result in the elimination of the company information level 1139 event; 1140 3. Provide projections of the provider’s financial results 1141 in the current year and at least the 4 succeeding years, both in 1142 the absence of proposed corrective actions and if the proposed 1143 corrective actions are taken; 1144 4. Identify the key assumptions affecting the provider’s 1145 projections and the sensitivity of the projections to the 1146 assumptions; and 1147 5. Identify the quality of and problems associated with the 1148 provider’s business. 1149 (b) The company information report must be submitted within 1150 45 days after the occurrence of the company information level 1151 event. 1152 (c) Within 60 days after the submission by a provider of a 1153 company information report to the office, the office shall 1154 notify the provider whether the corrective action identified in 1155 the company information report must be implemented or is 1156 unsatisfactory in the judgment of the office. If the office 1157 determines that the corrective action proposed in the company 1158 information report is unsatisfactory, the notification to the 1159 provider must set forth the reasons for the determination and 1160 may set forth proposed revisions. Upon notification from the 1161 office, the provider shall prepare a revised company information 1162 report, which may incorporate by reference any revisions 1163 proposed by the office, and shall submit the revised company 1164 information report to the office within 45 days after the 1165 notification from the office; or 1166 (d) If the office notifies a provider that the provider’s 1167 company information report or revised company information report 1168 is unsatisfactory, the office may, at its discretion, specify in 1169 the notification that the notification is a regulatory action 1170 level event. 1171 1172 The occurrence of a company information level event may not be 1173 deemed a violation of the Insurance Code and the submission of a 1174 company information report may not be deemed a disciplinary 1175 action. However, the failure to file a company information 1176 report or other violation of this section constitutes a 1177 violation of the Insurance Code and may subject a provider to 1178 disciplinary action. 1179 (2)(a) If a regulatory action level event occurs, the 1180 office must: 1181 1. Require the provider to prepare and submit a corrective 1182 action plan or, if applicable, a revised corrective action plan; 1183 2. Perform an examination pursuant to s. 624.316 or an 1184 analysis, as the office considers necessary, of the assets, 1185 liabilities, and operations of the provider, including a review 1186 of the corrective action plan or the revised corrective action 1187 plan; and 1188 3. After the examination or analysis, issue a corrective 1189 order specifying any corrective actions that the office 1190 determines are required. 1191 (b) In determining corrective actions, the office shall 1192 consider any factor relevant to the provider based upon the 1193 office’s examination or analysis of the assets, liabilities, and 1194 operations of the provider. The corrective action plan or the 1195 revised corrective action plan must be submitted within 45 days 1196 after the occurrence of the regulatory action level event. 1197 (c) The office may retain actuaries, investment experts, 1198 and other consultants to review a provider’s corrective action 1199 plan or revised corrective action plan, examine or analyze the 1200 assets, liabilities, and operations of a provider, and formulate 1201 the corrective order with respect to the provider. The fees, 1202 costs, and expenses relating to consultants must be borne by the 1203 affected provider or by any other party as directed by the 1204 office. 1205 (3) If an impairment occurs, the office must take any 1206 action necessary to place the provider under regulatory control, 1207 including any remedy available under chapter 631. An impairment 1208 is sufficient grounds for the department to be appointed as 1209 receiver as provided in chapter 631. Notwithstanding s. 631.011, 1210 impairment of a provider, for purposes of s. 631.051, is defined 1211 according to the term “impaired” under s. 651.011. The office 1212 may forego taking action for up to 90 days after the impairment 1213 if the office finds there is a reasonable expectation that the 1214 impairment may be eliminated within the 90-day period. 1215 (4) There is no liability on the part of, and a cause of 1216 action may not arise against, the commission, department, or 1217 office, or their employees or agents, for any action taken by 1218 them in the performance of their powers and duties under this 1219 section. 1220 (5) The office shall transmit any notice that may result in 1221 regulatory action by registered mail, certified mail, or any 1222 other method of transmission. Notice is effective when the 1223 provider receives it. 1224 (6) This section is supplemental to the other laws of this 1225 state and does not preclude or limit any power or duty of the 1226 department or office under those laws or under the rules adopted 1227 pursuant to those laws. 1228 (7) The commission may adopt rules to administer this 1229 section, including, but not limited to, rules regarding 1230 corrective action plans, adjusted corrective action plans, 1231 corrective orders, and procedures to be followed in the event of 1232 a triggering of a company information level event, a regulatory 1233 action level event, or an impairment. 1234 (8) The office may exempt a provider from subsection (1), 1235 subsection (2), or subsection (3) until stabilized occupancy is 1236 reached or until the time projected to achieve stabilized 1237 occupancy as reported in the last actuarial study required by 1238 the office as part of an application filing under s. 651.022, s. 1239 651.023, s. 651.024, s. 651.0245, or s. 651.0246 has elapsed, 1240 but for no longer than 3 years from the date of issuance of the 1241 certificate of occupancy. 1242 Section 16. Paragraphs (a) and (c) of subsection (1) of 1243 section 651.035, Florida Statutes, are amended, and subsections 1244 (7), (8), and (9) are added to that section, to read: 1245 651.035 Minimum liquid reserve requirements.— 1246 (1) A provider shall maintain in escrow a minimum liquid 1247 reserve consisting of the following reserves, as applicable: 1248 (a) Each provider shall maintain in escrow as a debt 1249 service reserve the aggregate amount of all principal and 1250 interest payments due during the fiscal year on any mortgage 1251 loan or other long-term financing of the facility, including 1252 property taxes as recorded in the audited financial statements 1253 required under s. 651.026. The amount must include any leasehold 1254 payments and all costs related to such payments. If principal 1255 payments are not due during the fiscal year, the provider must 1256shallmaintain in escrow as a minimum liquid reserve an amount 1257 equal to interest payments due during the next 12 months on any 1258 mortgage loan or other long-term financing of the facility, 1259 including property taxes noticed as required by s. 197.322(3) 1260 and insurance. If a provider does not have a mortgage loan or 1261 other financing on the facility, the provider must deposit 1262 monthly in escrow as a minimum liquid reserve an amount equal to 1263 one-twelfth of the annual property tax liability as indicated in 1264 the most recent tax notice provided pursuant to s. 197.322(3). 1265 (c) Each provider shall maintain in escrow an operating 1266 reserve equal to 30 percent of the total operating expenses 1267 projected in the feasibility study required by s. 651.023 for 1268 the first 12 months of operation. Thereafter, each provider 1269 shall maintain in escrow an operating reserve equal to 15 1270 percent of the total operating expenses in the annual report 1271 filed pursuant to s. 651.026. If a provider has been in 1272 operation for more than 12 months, the total annual operating 1273 expenses mustshallbe determined by averaging the total annual 1274 operating expenses reported to the office by the number of 1275 annual reports filed with the office within the preceding 3-year 1276 period subject to adjustment if there is a change in the number 1277 of facilities owned. For purposes of this subsection, total 1278 annual operating expenses include all expenses of the facility 1279 except:depreciation and amortization; interest and property 1280 taxes included in paragraph (a); extraordinary expenses that are 1281 adequately explained and documented in accordance with generally 1282 accepted accounting principles; liability insurance premiums in 1283 excess of those paid in calendar year 1999; and changes in the 1284 obligation to provide future services to current residents. For 1285 providers initially licensed during or after calendar year 1999, 1286 liability insurance mustshallbe included in the total 1287 operating expenses in an amount not to exceed the premium paid 1288 during the first 12 months of facility operation.Beginning1289January 1, 1993,The operating reserves required under this 1290 subsection mustshallbe in an unencumbered account held in 1291 escrow for the benefit of the residents. Such funds may not be 1292 encumbered or subject to any liens or charges by the escrow 1293 agent or judgments, garnishments, or creditors’ claims against 1294 the provider or facility. However, if a facility had a lien, 1295 mortgage, trust indenture, or similar debt instrument in place 1296 before January 1, 1993, which encumbered all or any part of the 1297 reserves required by this subsection and such funds were used to 1298 meet the requirements of this subsection, then such arrangement 1299 may be continued, unless a refinancing or acquisition has 1300 occurred, and the provider isshall bein compliance with this 1301 subsection. 1302 (7) A provider may withdraw funds from the operating 1303 reserve or the debt service reserve as provided in s. 625.62 1304 with the written consent of the office. 1305 (a) To withdraw funds in excess of the amount required 1306 under this section, the provider must file notice with the 1307 office 10 days before the date of such withdrawal. If no 1308 disapproval is received within 10 days of the filing of such 1309 notice, the withdrawal is deemed approved. Escrow agent fees as 1310 allowed by s. 651.033(1)(d) may be withdrawn from funds in 1311 excess of the amount required under this section without prior 1312 approval of the office. 1313 (b)1. For all other proposed withdrawals, in order to 1314 receive the consent of the office, the provider must file 1315 documentation showing why the withdrawal is necessary for the 1316 continued operation of the facility and such additional 1317 information as the office reasonably requires. 1318 2. The office shall notify the provider when the file is 1319 deemed complete. If the provider has complied with all prior 1320 requests for information, the file is deemed complete after 30 1321 days without communication from the office. 1322 3. Within 30 days after the date a file is deemed complete, 1323 the office shall provide the provider with written notice of its 1324 approval or disapproval of the request. The office may 1325 disapprove any request to withdraw such funds if it determines 1326 that the withdrawal is not in the best interest of the 1327 residents. 1328 (8) The office may order the immediate transfer of up to 1329 100 percent of the funds held in the minimum liquid reserve to 1330 the custody of the department pursuant to part III of chapter 1331 625 if the office finds that the provider is impaired or 1332 insolvent. The office may order such a transfer regardless of 1333 whether the office has suspended or revoked, or intends to 1334 suspend or revoke, the certificate of authority of the provider. 1335 (9) Each facility shall file with the office annually, no 1336 later than 60 days before the end of the provider’s fiscal year, 1337 a calculation of its minimum liquid reserve, determined in 1338 accordance with this section, on a form prescribed by the 1339 commission. The minimum liquid reserve must be maintained at the 1340 calculated level beginning no later than the first day of the 1341 subsequent fiscal year. 1342 Section 17. Section 651.043, Florida Statutes, is created 1343 to read: 1344 651.043 Approval of change in management.— 1345 (1) As used in this section, the term “management” means: 1346 (a) A manager or management company; 1347 (b) An officer or director of the provider or of the 1348 manager or management company; 1349 (c) Any other person performing duties similar to those of 1350 persons in paragraph (a) or paragraph (b); or 1351 (d) A person who exercises or who has the ability to 1352 exercise effective control of the organization, or who 1353 influences or has the ability to influence the transaction of 1354 the business of the provider. 1355 (2) Effective July 1, 2018, a contract for management must 1356 be in writing and include a provision that the contract will be 1357 canceled upon issuance of an order by the office pursuant to 1358 this section without the application of any cancellation fee or 1359 penalty. 1360 (3) A provider must file notice with the office of any 1361 change in management within 5 days after the appointment of new 1362 management or the removal of approved management, whichever is 1363 earlier. For each new management appointment, the provider must 1364 submit the information required by s. 651.022(2) and a copy of 1365 the written management contract. The office shall complete its 1366 review and issue an approval or disapproval of the management 1367 contract within 30 days after the filing is deemed complete. A 1368 filing is deemed complete upon receipt of all requested 1369 information and correction of any error or omission for which 1370 the applicant was timely notified. 1371 (4) The office may disapprove new management and order the 1372 provider to cancel the contract in accordance with the terms of 1373 the contract and applicable law if the office: 1374 (a) Finds that the new management is incompetent or 1375 untrustworthy; 1376 (b) Finds that the new management is so lacking in relevant 1377 managerial experience as to make the proposed operation 1378 hazardous to the residents or potential residents; 1379 (c) Finds that the new management is so lacking in relevant 1380 experience, ability, and standing as to jeopardize the 1381 reasonable promise of successful operation; or 1382 (d) Has good reason to believe that the new management is 1383 affiliated directly or indirectly through ownership, control, 1384 reinsurance transactions, or other insurance or business 1385 relations with any person or persons whose business operations 1386 are or have been marked by manipulation of assets, accounts, or 1387 reinsurance or by bad faith, to the detriment of policyholders, 1388 residents, stockholders, investors, creditors, or the public. 1389 (5) Management disapproved by the office must be removed 1390 within 30 days after receipt by the provider of notice of such 1391 disapproval. 1392 (6) The office may revoke, suspend, or take other 1393 administrative action against the certificate of authority of 1394 the provider if the provider: 1395 (a) Fails to timely remove management disapproved by the 1396 office; 1397 (b) Fails to timely notify the office of a change in 1398 management; 1399 (c) Appoints management without a written contract; or 1400 (d) Repeatedly appoints management that was previously 1401 disapproved by the office or that is not approvable pursuant to 1402 subsection (4). 1403 (7) The provider shall remove any management immediately 1404 upon discovery of any of the following conditions, if the 1405 conditions were not disclosed in the notice to the office 1406 required in subsection (3): 1407 (a) That any person who exercises or has the ability to 1408 exercise effective control of the provider, or who influences or 1409 has the ability to influence the transaction of the business of 1410 the provider, has been found guilty of, or has pled guilty or no 1411 contest to, any felony or crime punishable by imprisonment of 1 1412 year or more under the laws of the United States or any state 1413 thereof or under the laws of any other country, which involves 1414 moral turpitude, without regard to whether a judgment or 1415 conviction has been entered by the court having jurisdiction in 1416 such case. 1417 (b) That any person who exercises or has the ability to 1418 exercise effective control of the organization, or who 1419 influences or has the ability to influence the transaction of 1420 the business of the provider, is now or was in the past 1421 affiliated, directly or indirectly, through ownership interest 1422 of 10 percent or more in, control of, or reinsurance 1423 transactions with any business, corporation, or other entity 1424 that has been found guilty of or has pled guilty or no contest 1425 to any felony or crime punishable by imprisonment for 1 year or 1426 more under the laws of the United States, any state, or any 1427 other country, regardless of adjudication. 1428 1429 The failure to remove such management is grounds for revocation 1430 or suspension of the provider’s certificate of authority. 1431 Section 18. Section 651.051, Florida Statutes, is amended 1432 to read: 1433 651.051 Maintenance of assets and records in state.—All 1434 records and assets of a provider must be maintained in this 1435 state. No records or assets may be removed from this state by a 1436 provider unless the office consents to such removal in writing 1437 before such removal. Such consent mustshallbe based upon the 1438 provider’s submitting satisfactory evidence that the removal 1439 will facilitate and make more economical the operations of the 1440 provider and will not diminish the service or protection 1441 thereafter to be given the provider’s residents in this state. 1442 BeforePrior tosuch removal, the provider shall give notice to 1443 the president or chair of the facility’s residents’ council. If 1444 such removal is part of a cash management system which has been 1445 approved by the office, disclosure of the system mustshallmeet 1446 the notification requirements. The electronic storage of records 1447 on a web-based, secured storage platform by contract with a 1448 third party constitutes removal from the state and requires 1449 prior approval by the office. 1450 Section 19. Subsection (2) of section 651.057, Florida 1451 Statutes, is amended to read: 1452 651.057 Continuing care at-home contracts.— 1453 (2) A provider that holds a certificate of authority and 1454 wishes to offer continuing care at-home must also: 1455 (a) Submit a business plan to the office with the following 1456 information: 1457 1. A description of the continuing care at-home services 1458 that will be provided, the market to be served, and the fees to 1459 be charged; 1460 2. A copy of the proposed continuing care at-home contract; 1461 3. An actuarial study prepared by an independent actuary in 1462 accordance with the standards adopted by the American Academy of 1463 Actuaries which presents the impact of providing continuing care 1464 at-home on the overall operation of the facility; and 1465 4. A market feasibility study that meets the requirements 1466 of s. 651.022(3) and documents that there is sufficient interest 1467 in continuing care at-home contracts to support such a program; 1468 (b) Demonstrate to the office that the proposal to offer 1469 continuing care at-home contracts to individuals who do not 1470 immediately move into the facility will not place the provider 1471 in an unsound financial condition; 1472 (c) Comply with the requirements of s. 651.0246(1)s.1473651.021(2), except that an actuarial study may be substituted 1474 for the feasibility study; and 1475 (d) Comply with the requirements of this chapter. 1476 Section 20. Subsection (1) of section 651.071, Florida 1477 Statutes, is amended to read: 1478 651.071 Contracts as preferred claims on liquidation or 1479 receivership.— 1480 (1) In the event of receivership or liquidation proceedings 1481 against a provider, all continuing care and continuing care at 1482 home contracts executed by a provider areshall bedeemed 1483 preferred claims or policyholder losspreferredclaims pursuant 1484 to s. 631.271(1)(b) against all assets owned by the provider; 1485 however, such claims are subordinate to any secured claim. 1486 Section 21. Subsection (2) and present paragraph (g) of 1487 subsection (3) of section 651.091, Florida Statutes, are 1488 amended, present paragraphs (h) and (i) of subsection (3) of 1489 that section are redesignated as paragraphs (g) and (h), 1490 respectively, a new paragraph (i) and paragraphs (j), (k), and 1491 (l) are added to that subsection, and paragraph (d) of 1492 subsection (3) and subsection (4) of that section are 1493 republished, to read: 1494 651.091 Availability, distribution, and posting of reports 1495 and records; requirement of full disclosure.— 1496 (2) Every continuing care facility shall: 1497 (a) Display the certificate of authority in a conspicuous 1498 place inside the facility. 1499 (b) Post in a prominent position in the facility which is 1500 accessible to all residents and the general public a concise 1501 summary of the last examination report issued by the office, 1502 with references to the page numbers of the full report noting 1503 any deficiencies found by the office, and the actions taken by 1504 the provider to rectify such deficiencies, indicating in such 1505 summary where the full report may be inspected in the facility. 1506 (c) Provide notice to the president or chair of the 1507 residents’ council within 3 business days after issuance of an 1508 examination report or the initiation of any legal or 1509 administrative proceeding by the office or the department and 1510 include a copy of such document. 1511 (d)(c)Post in a prominent position in the facility which 1512 is accessible to all residents and the general public a summary 1513 of the latest annual statement, indicating in the summary where 1514 the full annual statement may be inspected in the facility. A 1515 listing of any proposed changes in policies, programs, and 1516 services must also be posted. 1517 (e)(d)Distribute a copy of the full annual statement and a 1518 copy of the most recent third-partythird partyfinancial audit 1519 filed with the annual report to the president or chair of the 1520 residents’ council within 30 days after filing the annual report 1521 with the office, and designate a staff person to provide 1522 explanation thereof. 1523 (f)(e)Deliver the information described in s. 651.085(4) 1524 in writing to the president or chair of the residents’ council 1525 and make supporting documentation available upon requestNotify1526the residents’ council of any plans filed with the office to1527obtain new financing, additional financing, or refinancing for1528the facility and of any applications to the office for any1529expansion of the facility. 1530 (g)(f)Deliver to the president or chair of the residents’ 1531 council a summary of entrance fees collected and refunds made 1532 during the time period covered in the annual report and the 1533 refund balances due at the end of the report period. 1534 (h)(g)Deliver to the president or chair of the residents’ 1535 council a copy of each quarterly statement within 30 days after 1536 the quarterly statement is filed with the office if the facility 1537 is required to file quarterly. 1538 (i)(h)Upon request, deliver to the president or chair of 1539 the residents’ council a copy of any newly approved continuing 1540 care or continuing care at-home contract within 30 days after 1541 approval by the office. 1542 (j) Provide to the president or chair of the residents’ 1543 council a copy of any notice filed with the office relating to 1544 any change in ownership within 3 business days after the receipt 1545 of such filing by the provider. 1546 (k) Make the information available to prospective residents 1547 pursuant to paragraph (3)(d) available to current residents and 1548 provide notice of changes to that information to the president 1549 or chair of the residents’ council within 3 business days. 1550 (3) Before entering into a contract to furnish continuing 1551 care or continuing care at-home, the provider undertaking to 1552 furnish the care, or the agent of the provider, shall make full 1553 disclosure, and provide copies of the disclosure documents to 1554 the prospective resident or his or her legal representative, of 1555 the following information: 1556 (d) In keeping with the intent of this subsection relating 1557 to disclosure, the provider shall make available for review 1558 master plans approved by the provider’s governing board and any 1559 plans for expansion or phased development, to the extent that 1560 the availability of such plans does not put at risk real estate, 1561 financing, acquisition, negotiations, or other implementation of 1562 operational plans and thus jeopardize the success of 1563 negotiations, operations, and development. 1564(g) The amount and location of any reserve funds required1565by this chapter, and the name of the person or entity having a1566claim to such funds in the event of a bankruptcy, foreclosure,1567or rehabilitation proceeding.1568 (i) Notice of the issuance of an examination report or the 1569 initiation of any legal or administrative proceeding by the 1570 office or the department, including a copy of such document. 1571 (j) Notice that the entrance fee is the property of the 1572 provider after the expiration of the 7-day escrow requirement 1573 under s. 651.055(2). 1574 (k) If the provider operates multiple facilities, a 1575 disclosure of any distribution of assets or income between 1576 facilities that may occur and the manner in which such 1577 distributions would be made, or a statement that such 1578 distributions will not occur. 1579 (l) Notice of any holding company system or obligated group 1580 of which the provider is a member. 1581 (4) A true and complete copy of the full disclosure 1582 document to be used must be filed with the office before use. A 1583 resident or prospective resident or his or her legal 1584 representative may inspect the full reports referred to in 1585 paragraph (2)(b); the charter or other agreement or instrument 1586 required to be filed with the office pursuant to s. 651.022(2), 1587 together with all amendments thereto; and the bylaws of the 1588 corporation or association, if any. Upon request, copies of the 1589 reports and information shall be provided to the individual 1590 requesting them if the individual agrees to pay a reasonable 1591 charge to cover copying costs. 1592 Section 22. Subsection (1) of section 651.105, Florida 1593 Statutes, is amended, and subsection (7) is added to that 1594 section, to read: 1595 651.105 Examination and inspections.— 1596 (1) The office may at any time, and shall at least once 1597 every 3 years, examine the business of any applicant for a 1598 certificate of authority and any provider engaged in the 1599 execution of care contracts or engaged in the performance of 1600 obligations under such contracts, in the same manner as is 1601 provided for the examination of insurance companies pursuant to 1602 ss. 624.316 and 624.318s. 624.316. For a provider as described 1603definedin s. 651.028, such examinations mustshalltake place 1604 at least once every 5 years. Such examinations mustshallbe 1605 made by a representative or examiner designated by the office 1606 whose compensation will be fixed by the office pursuant to s. 1607 624.320. Routine examinations may be made by having the 1608 necessary documents submitted to the office; and, for this 1609 purpose, financial documents and records conforming to commonly 1610 accepted accounting principles and practices, as required under 1611 s. 651.026, are deemed adequate. The final written report of 1612 each examination must be filed with the office and, when so 1613 filed, constitutes a public record. Any provider being examined 1614 shall, upon request, give reasonable and timely access to all of 1615 its records. The representative or examiner designated by the 1616 office may at any time examine the records and affairs and 1617 inspect the physical property of any provider, whether in 1618 connection with a formal examination or not. 1619 (7) To the extent necessary to ascertain the financial 1620 condition of a provider, the office may examine any parent, 1621 subsidiary, or affiliate that has a contractual or financial 1622 relationship with the provider. 1623 Section 23. Section 651.1055, Florida Statutes, is created 1624 to read: 1625 651.1055 Duty of provider to cooperate.—A provider has a 1626 duty to cooperate with the office, including responding to 1627 written correspondence and providing data, financial statements, 1628 and pertinent information as requested by the office. 1629 Section 24. Section 651.106, Florida Statutes, is amended 1630 to read: 1631 651.106 Grounds for discretionary refusal, suspension, or 1632 revocation of certificate of authority.—The office may deny an 1633 application or,suspend,or revoke the provisional certificate 1634 of authority or the certificate of authority of any applicant or 1635 provider if it finds that any one or more of the following 1636 grounds applicable to the applicant or provider exist: 1637 (1) Failure by the provider to continue to meet the 1638 requirements for the authority originally granted. 1639 (2) Failure by the provider to meet one or more of the 1640 qualifications for the authority specified by this chapter. 1641 (3) Material misstatement, misrepresentation, or fraud in 1642 obtaining the authority, or in attempting to obtain the same. 1643 (4) Demonstrated lack of fitness or trustworthiness. 1644 (5) Fraudulent or dishonest practices of management in the 1645 conduct of business. 1646 (6) Misappropriation, conversion, or withholding of moneys. 1647 (7) Failure to comply with, or violation of, any proper 1648 order or rule of the office or commission or violation of any 1649 provision of this chapter. 1650 (8) The insolvent or impaired condition of the provider or 1651 the provider’s being in such condition or using such methods and 1652 practices in the conduct of its business as to render its 1653 further transactions in this state hazardous or injurious to the 1654 public. 1655 (9) Refusal by the provider to be examined or to produce 1656 its accounts, records, and files for examination, or refusal by 1657 any of its officers to give information with respect to its 1658 affairs or to perform any other legal obligation under this 1659 chapter when required by the office. 1660 (10) Failure by the provider to comply with the 1661 requirements of s. 651.026 or s. 651.033. 1662 (11) Failure by the provider to maintain escrow accounts or 1663 funds as required by this chapter. 1664 (12) Failure by the provider to meet the requirements of 1665 this chapter for disclosure of information to residents 1666 concerning the facility, its ownership, its management, its 1667 development, or its financial condition or failure to honor its 1668 continuing care or continuing care at-home contracts. 1669 (13) Any cause for which issuance of the license could have 1670 been refused had it then existed and been known to the office. 1671 (14) Having been found guilty of, or having pleaded guilty 1672 or nolo contendere to, a felony in this state or any other 1673 state, without regard to whether a judgment or conviction has 1674 been entered by the court having jurisdiction of such cases. 1675 (15) In the conduct of business under the license, engaging 1676 in unfair methods of competition or in unfair or deceptive acts 1677 or practices prohibited under part IX of chapter 626. 1678 (16) A pattern of bankrupt enterprises. 1679 (17)(a) The ownership, control, or management of the 1680 organization includes any person: 1681 1. Who is incompetent or untrustworthy; 1682 2. Who is so lacking in continuing care expertise as to 1683 make the operation of the provider hazardous to potential and 1684 existing residents; 1685 3. Who is so lacking in continuing care experience, 1686 ability, and standing as to jeopardize the reasonable promise of 1687 successful operation; 1688 4. Who is affiliated, directly or indirectly, through 1689 ownership, control, reinsurance transactions, or other business 1690 relations, with any person whose business operations are or have 1691 been marked by business practices or conduct that is to the 1692 detriment of the public, stockholders, investors, or creditors; 1693 or 1694 5. Whose business operations are or have been marked by 1695 business practices or conduct that is to the detriment of the 1696 public, stockholders, investors, or creditors. 1697 (b) Any person, including any stock subscriber, 1698 stockholder, or incorporator, who exercises or has the ability 1699 to exercise effective control of the organization, or who 1700 influences or has the ability to influence the transaction of 1701 the provider’s business, does not possess the financial standing 1702 and business experience for the successful operation of the 1703 provider. 1704 (18) The provider has not filed a notice of change in 1705 management, fails to remove a disapproved manager, or persists 1706 in appointing disapproved or unapprovable managers. 1707 1708 Revocation of a certificate of authority under this section does 1709 not relieve a provider from the provider’s obligation to 1710 residents under the terms and conditions of any continuing care 1711 or continuing care at-home contract between the provider and 1712 residents or the provisions of this chapter. The provider shall 1713 continue to file its annual statement and pay license fees to 1714 the office as required under this chapter as if the certificate 1715 of authority had continued in full force, but the provider shall 1716 not issue any new contracts. The office may seek an action in 1717 the circuit court of Leon County to enforce the office’s order 1718 and the provisions of this section. 1719 Section 25. Section 651.1065, Florida Statutes, is created 1720 to read: 1721 651.1065 Soliciting or accepting new continuing care 1722 contracts by impaired or insolvent facilities or providers.— 1723 (1) Regardless of whether delinquency proceedings as to a 1724 continuing care retirement community have been or are to be 1725 initiated, a proprietor, general partner, member, officer, 1726 director, trustee, or manager of a continuing care retirement 1727 community, except with the written permission of the office, may 1728 not permit the continuing care retirement community to solicit 1729 or accept new continuing care contracts in this state after the 1730 proprietor, general partner, member, officer, director, trustee, 1731 or manager knew, or reasonably should have known, that the 1732 continuing care retirement community was impaired or insolvent. 1733 (2) A proprietor, general partner, member, officer, 1734 director, trustee, or manager who violates this section commits 1735 a felony of the third degree, punishable as provided in s. 1736 775.082, s. 775.083, or s. 775.084. 1737 Section 26. Section 651.111, Florida Statutes, is amended 1738 to read: 1739 651.111 Resident complaints and requests for inspections.— 1740 (1) Any interested party or resident may file a complaint 1741 that may include a request for an inspection of the records and 1742 related financial affairs of a provider providing care in 1743 accordance withthe provisions ofthis chapter by transmitting 1744 to the office notice of an alleged violation of applicable 1745 requirements prescribed by statute or by rule, specifying to a 1746 reasonable extent the details of the alleged violation or 1747 complaint, which notice mustshallbe signed by the complainant. 1748 (2) If the complaint requests an inspection, the substance 1749 of the complaint mustshallbe given to the provider no earlier 1750 than the time of the inspection. Unless the complainant 1751 specifically requests otherwise, neither the substance of the 1752 complaint which is provided to the provider nor any copy of the 1753 complaint or any record which is published, released, or 1754 otherwise made available to the provider mayshalldisclose the 1755 name of any person mentioned in the complaint except the name of 1756 any duly authorized officer, employee, or agent of the office 1757 conducting the investigation or inspection pursuant to this 1758 chapter. 1759 (3) Upon receipt of a complaint, the office shall make a 1760 preliminary review; and, unless the office determines that the 1761 complaint is without any reasonable basis or the complaint does 1762 not request an inspection, the office shall make an inspection. 1763 The office shall provide the complainant with a written 1764 acknowledgment of the complaint within 15 days after receipt by 1765 the office. Such acknowledgment must include the case number 1766 assigned by the office to the complaint and the name and contact 1767 information of any duly authorized officer, employee, or agent 1768 of the office conducting the investigation or inspection 1769 pursuant to this chapter. The complainant mustshallbe advised, 1770 within 30 days after the receipt of the complaint by the office, 1771 of the proposed course of action of the office, including an 1772 estimated timeframe for the handling of the complaint. If the 1773 office does not conclude its inspection or investigation within 1774 the office’s estimated timeframe, the office must advise the 1775 complainant in writing within 15 days after any revised course 1776 of action, including a revised estimated timeframe for the 1777 handling of the complaint. Within 15 days after the office 1778 completes its inspection or concludes its investigation, the 1779 office shall provide the complainant a written closure statement 1780 specifying the office’s findings and the results of the 1781 inspection or investigation. 1782 (4) ANoprovider operating under a certificate of 1783 authority under this chapter may not discriminate or retaliate 1784 in any manner against a resident or an employee of a facility 1785 providing care because such resident or employee or any other 1786 person has initiated a complaint pursuant to this section. 1787 Section 27. Section 651.114, Florida Statutes, is amended 1788 to read: 1789 651.114 Delinquency proceedings; remedial rights.— 1790 (1) Upon determination by the office that a provider is not 1791 in compliance with this chapter, the office may notify the chair 1792 of the Continuing Care Advisory Council, who may assist the 1793 office in formulating a corrective action plan. 1794 (2) Within 30 days after a request by either the advisory 1795 council or the office, a provider shall make a plan for 1796 obtaining compliance or solvency available to the advisory 1797 council and the office, within 30 days after being requested to1798do so by the council, a plan for obtaining compliance or1799solvency. 1800 (3) Within 30 days after receipt of a plan for obtaining 1801 compliance or solvency, the office, ornotification,the 1802 advisory council at the request of the office, shall: 1803 (a) Consider and evaluate the plan submitted by the 1804 provider. 1805 (b) Discuss the problem and solutions with the provider. 1806 (c) Conduct such other business as is necessary. 1807 (d) Report its findings and recommendations to the office, 1808 which may require additional modification of the plan. 1809 1810 This subsection may not be interpreted so as to delay or prevent 1811 the office from taking any regulatory measures it deems 1812 necessary regarding the provider that submitted the plan. 1813 (4) If the financial condition of a continuing care 1814 facility or provider is impaired or is such that if not modified 1815 or corrected, its continued operation would result in 1816 insolvency, the office may direct the provider to formulate and 1817 file with the office a corrective action plan. If the provider 1818 fails to submit a plan within 30 days after the office’s 1819 directive, or submits a plan that is insufficient to correct the 1820 condition, the office may specify a plan and direct the provider 1821 to implement the plan. 1822 (5)(4)After receiving approval of a plan by the office, 1823 the provider shall submit a progress report monthly to the 1824 advisory council or the office, or both, in a manner prescribed 1825 by the office. After 3 months, or at any earlier time deemed 1826 necessary, the council shall evaluate the progress by the 1827 provider and shall advise the office of its findings. 1828 (6)(5)IfShouldthe office findsfindthat sufficient 1829 grounds exist for rehabilitation, liquidation, conservation, 1830 reorganization, seizure, or summary proceedings of an insurer as 1831 set forth in ss. 631.051, 631.061, and 631.071, the department 1832officemay petition for an appropriate court order or may pursue 1833 such other relief as is afforded in part I of chapter 631. 1834 Before invoking its powers under part I of chapter 631, the 1835 departmentofficeshall notify the chair of the advisory 1836 council. 1837 (7) Notwithstanding s. 631.011, impairment of a provider, 1838 for purposes of s. 631.051, is defined according to the term 1839 “impaired” in s. 651.011. 1840 (8)(6)In the event an order of conservation, 1841 rehabilitation, liquidation, orconservation, reorganization,1842 seizure, or summary proceedinghas been entered against a 1843 provider, the department and office are vested with all of the 1844 powers and duties they have under the provisions of part I of 1845 chapter 631 in regard to delinquency proceedings of insurance 1846 companies. A provider shall give written notice of the 1847 proceeding to its residents within 3 business days after the 1848 initiation of a delinquency proceeding under chapter 631 and 1849 shall include a notice of the delinquency proceeding in any 1850 written materials provided to prospective residents. 1851(7) If the financial condition of the continuing care1852facility or provider is such that, if not modified or corrected,1853its continued operation would result in insolvency, the office1854may direct the provider to formulate and file with the office a1855corrective action plan. If the provider fails to submit a plan1856within 30 days after the office’s directive or submits a plan1857that is insufficient to correct the condition, the office may1858specify a plan and direct the provider to implement the plan.1859 (9) A provider subject to an order to show cause entered 1860 pursuant to chapter 631 must file its written response to the 1861 order, together with any defenses it may have to the 1862 department’s allegations, no later than 20 days after service of 1863 the order to show cause, but no less than 15 days before the 1864 date of the hearing set by the order to show cause. 1865 (10) A hearing held pursuant to chapter 631 to determine 1866 whether cause exists for the department to be appointed receiver 1867 must be commenced within 60 days after an order directing a 1868 provider to show cause. 1869 (11)(a)(8)(a)If the petition for rehabilitation, 1870 liquidation, conservation, reorganization, seizure, or summary 1871 proceedings is based solely upon the default of the insurer 1872 under the terms of a resolution, ordinance, loan agreement, 1873 indenture of trust, mortgage, lease, security agreement, or 1874 other instrument creating or securing bonds or notes issued to 1875 finance a facility, the rights of the office described in this 1876 section are subordinate to the rights of a trustee or lender 1877 pursuant to the terms of a resolution, ordinance, loan 1878 agreement, indenture of trust, mortgage, lease, security 1879 agreement, or other instrument creating or securing bonds or 1880 notes issued to finance a facility, and the office, subject to 1881 the provisions of paragraph (c), mayshallnot exercise its 1882 remedial rights provided under this section and ss. 651.018, 1883 651.106, 651.108, and 651.116 with respect to a facility that is 1884 subject to a lien, mortgage, lease, or other encumbrance or 1885 trust indenture securing bonds or notes issued in connection 1886 with the financing of the facility, if the trustee or lender, by 1887 inclusion or by amendment to the loan documents or by a separate 1888 contract with the office, agrees that the rights of residents 1889 under a continuing care or continuing care at-home contract will 1890 be honored and will not be disturbed by a foreclosure or 1891 conveyance in lieu thereof as long as the resident: 1892 1. Is current in the payment of all monetary obligations 1893 required by the contract; 1894 2. Is in compliance and continues to comply with all 1895 provisions of the contract; and 1896 3. Has asserted no claim inconsistent with the rights of 1897 the trustee or lender. 1898 (b) This subsection does not require a trustee or lender 1899 to: 1900 1. Continue to engage in the marketing or resale of new 1901 continuing care or continuing care at-home contracts; 1902 2. Pay any rebate of entrance fees as may be required by a 1903 resident’s continuing care or continuing care at-home contract 1904 as of the date of acquisition of the facility by the trustee or 1905 lender and until expiration of the period described in paragraph 1906 (d); 1907 3. Be responsible for any act or omission of any owner or 1908 operator of the facility arising before the acquisition of the 1909 facility by the trustee or lender; or 1910 4. Provide services to the residents to the extent that the 1911 trustee or lender would be required to advance or expend funds 1912 that have not been designated or set aside for such purposes. 1913 (c) Should the office determine, at any time during the 1914 suspension of its remedial rights as provided in paragraph (a), 1915 that the trustee or lender is not in compliance with paragraph 1916 (a), or that a lender or trustee has assigned or has agreed to 1917 assign all or a portion of a delinquent or defaulted loan to a 1918 third party without the office’s written consent, the office 1919 shall notify the trustee or lender in writing of its 1920 determination, setting forth the reasons giving rise to the 1921 determination and specifying those remedial rights afforded to 1922 the office which the office shall then reinstate. 1923 (d) Upon acquisition of a facility by a trustee or lender 1924 and evidence satisfactory to the office that the requirements of 1925 paragraph (a) have been met, the office shall issue a 90-day 1926 temporary certificate of authority granting the trustee or 1927 lender the authority to engage in the business of providing 1928 continuing care or continuing care at-home and to issue 1929 continuing care or continuing care at-home contracts subject to 1930 the office’s right to immediately suspend or revoke the 1931 temporary certificate of authority if the office determines that 1932 any of the grounds described in s. 651.106 apply to the trustee 1933 or lender or that the terms of the contract used as the basis 1934 for the issuance of the temporary certificate of authority by 1935 the office have not been or are not being met by the trustee or 1936 lender since the date of acquisition. 1937 Section 28. Section 651.1141, Florida Statutes, is created 1938 to read: 1939 651.1141 Immediate final orders.—The Legislature finds that 1940 a violation of s. 651.024, s. 651.0245, s. 651.025, s. 1941 651.035(3), s. 651.043, s. 651.083, or s. 651.105 constitutes an 1942 immediate danger to the public health, safety, or welfare. 1943 Pursuant to s. 120.569, the office may issue an immediate final 1944 order to cease and desist if it finds that a provider is in 1945 violation of such sections. 1946 Section 29. Section 651.1151, Florida Statutes, is amended 1947 to read: 1948 651.1151 Administrative, vendor, and management contracts.— 1949 (1)The office may requireA provider musttosubmit to the 1950 office any contract for administrative, vendor, or management 1951 servicesif the office has information and belief that a1952provider has entered into a contractwith an affiliate, an 1953 entity controlled by the provider, or an entity controlled by an 1954 affiliate of the provider, which has not been disclosed to the1955office or which contract requires the provider to pay a fee that1956is unreasonably high in relation to the service provided. 1957 (2) The office may disapprove a contract for 1958 administrative, vendor, or management services if it finds that 1959 the fees to be paid are so unreasonably high as compared with 1960 similar contracts entered into by other providers in similar 1961 circumstances that the contract is detrimental to the facility 1962 or its residents. 1963 (3)(2)After review of the contract, the office may order 1964 the provider to cancel the contract in accordance with the terms 1965 of the contract and applicable law if it determines that the 1966 fees to be paid are so unreasonably high as compared with 1967 similar contracts entered into by other providers in similar 1968 circumstances that the contract is detrimental to the facility 1969 or its residents. 1970 (4)(3)Any contract with an affiliate, an entity controlled 1971 by the provider, or an entity controlled by an affiliate of the 1972 provider for administrative, vendor, or management services 1973entered into or renewed after October 1, 1991,must include a 1974 provision that the contract will be canceled upon issuance of an 1975 order by the office pursuant to this section. A copy of the 1976 current management services contract, pursuant to this section, 1977 if any, must be on file in the marketing office or other area 1978 accessible to residents and the appropriate residents’ council. 1979 (5)(4)Any action of the office under this section is 1980 subject to review pursuant to the procedures provided in chapter 1981 120. 1982 Section 30. Paragraphs (d) and (e) of subsection (1) of 1983 section 651.121, Florida Statutes, are amended to read: 1984 651.121 Continuing Care Advisory Council.— 1985 (1) The Continuing Care Advisory Council to the office is 1986 created consisting of 10 members who are residents of this state 1987 appointed by the Governor and geographically representative of 1988 this state. Three members shall be administrators of facilities 1989 that hold valid certificates of authority under this chapter and 1990 shall have been actively engaged in the offering of continuing 1991 care contracts in this state for 5 years before appointment. The 1992 remaining members include: 1993(d) An attorney.1994 (d)(e)FourThreeresidents who hold continuing care or 1995 continuing care at-home contracts with a facility certified in 1996 this state. 1997 Section 31. Subsections (1) and (4) of section 651.125, 1998 Florida Statutes, are amended to read: 1999 651.125 Criminal penalties; injunctive relief.— 2000 (1) Any person who maintains, enters into, or, as manager 2001 or officer or in any other administrative capacity, assists in 2002 entering into, maintaining, or performing any continuing care or 2003 continuing care at-home contract subject to this chapter without 2004doing so in pursuance ofa valid provisional certificate of 2005 authority or certificate of authorityor renewal thereof, as 2006 contemplated by or provided in this chapter, or who otherwise 2007 violates any provision of this chapter or rule adopted in 2008 pursuance of this chapter, commits a felony of the third degree, 2009 punishable as provided in s. 775.082 or s. 775.083. Each 2010 violation of this chapter constitutes a separate offense. 2011 (4) Any action brought by the office against a provider 2012 shall not abate by reason of a sale or other transfer of 2013 ownership of the facility used to provide care, which provider 2014 is a party to the action, except with the express written 2015 consent of thedirector oftheoffice. 2016 Section 32. This act shall take effect July 1, 2018.