North Carolina 2025-2026 Regular Session

North Carolina House Bill H357 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		GENERAL ASSEMBLY OF NORTH CAROLINA
2	2		SESSION 2025
3		-	H 2
	3	+	H 1
4	4		HOUSE BILL 357
5		-	~~Committee Substitute Favorable 4/3/25~~
	5	+
6	6
7	7		Short Title: Continuing Care Retirement Communities Act.-AB (Public)
8		-	Sponsors:
9		-	Referred to:
	8	+	Sponsors: Representatives Humphrey, Almond, Arp, and Setzer (Primary Sponsors).
	9	+	For a complete list of sponsors, refer to the North Carolina General Assembly web site.
	10	+	Referred to: Insurance, if favorable, Finance, if favorable, Rules, Calendar, and Operations of
	11	+	the House
10	12		March 12, 2025
11		-	H357 -v-2
	13	+	H357 -v-1
12	14		A BILL TO BE ENTITLED 1
13	15		AN ACT TO ENACT THE CONTINUING CARE RETIREMENT COMMUNITIES A CT, AS 2
14	16		RECOMMENDED BY THE D EPARTMENT OF INSURAN CE. 3
15	17		The General Assembly of North Carolina enacts: 4
16	18		SECTION 1. Article 64 of Chapter 58 of the General Statutes is repealed. 5
17	19		SECTION 2. Chapter 58 of the General Statutes is amended by adding a new Article 6
18	20		to read: 7
19	21		"Article 64A. 8
20	22		"Continuing Care Retirement Communities. 9
21	23		"Part 1. General Provisions. 10
22	24		"§ 58-64A-1. Title. 11
23	25		This Article shall be known and may be cited as the "Continuing Care Retirement 12
24	26		Communities Act." 13
25	27		"§ 58-64A-2. Legislative intent. 14
26	28		The General Assembly recognizes that continuing care retirement community residents often 15
27	29		expend a significant portion of their savings when contracting with a provider for continuing care 16
28	30		and devastating consequences can result if a provider becomes insolvent or unable to provide 17
29	31		continuing care. It is the intent of the General Assembly to promote the dignity and protect the 18
30	32		health, safety, and welfare of older citizens of North Carolina by (i) encouraging the development 19
31	33		of continuing care retirement communities and (ii) requiring providers offering or providing 20
32	34		continuing care in this State to obtain a license and to be monitored and regulated by the North 21
33	35		Carolina Department of Insurance under this Article. This Article applies to both for-profit and 22
34	36		nonprofit providers. 23
35	37		"§ 58-64A-5. Definitions. 24
36	38		The following definitions apply to this Article: 25
37	39		(1) Accepted actuarial standards of practice. – Standards of practice that conform 26
38	40		with Actuarial Standards of Practice No. 3 for Continuing Care Retirement 27
39	41		Communities, Revised Edition, effective June 1, 2022, including subsequent 28
40	42		amendments and editions. 29
41	43		(2) Actuarial opinion. – An opinion issued by an actuary in accordance with 30
42	44		accepted actuarial standards of practice. 31
43	45		(3) Actuarial study. – An analysis that includes an actuary's opinion of whether 32
44	46		the provider or applicant is in satisfactory actuarial balance in accordance with 33
45	47		accepted actuarial standards of practice. 34 General Assembly Of North Carolina Session 2025
46		-	Page 2 House Bill 357-~~Second~~ Edition
	48	+	Page 2 House Bill 357-First Edition
47	49		(4) Actuary. – An individual qualified to sign an actuarial opinion in accordance 1
48	50		with the American Academy of Actuaries' qualification standards and who is 2
49	51		a member in good standing with the American Academy of Actuaries. 3
50	52		(5) Advertisement. – Any written, visual, or electronic information provided to 4
51	53		potential residents, or their representatives, to induce those persons to 5
52	54		subscribe to or enter into a nonbinding reservation agreement, binding 6
53	55		reservation agreement, continuing care contract, or continuing care at home 7
54	56		contract. 8
55	57		(6) Affiliate. – A person that, directly or indirectly, through one or more other 9
56	58		persons, controls, is controlled by, or is under common control with a provider 10
57	59		or applicant. 11
58	60		(7) Annual debt service. – The current year's capitalized interest cost plus interest 12
59	61		expense and scheduled principal payments, excluding any balloon principal 13
60	62		payment amounts and any portion of the annual debt service that has been or 14
61	63		will be funded by debt for the payment of debt service. 15
62	64		(8) Applicant. – Any person with a pending application or other request for 16
63	65		approval under this Article. 17
64	66		(9) Audited financial statements. – Financial statements that have been prepared 18
65	67		in accordance with Generally Accepted Accounting Principles and examined 19
66	68		by an independent certified public accountant. 20
67	69		(10) Binding reservation agreement. – A binding contractual agreement between a 21
68	70		provider and a depositor that requires the payment of a deposit to reserve the 22
69	71		right to purchase continuing care, including the right to live in an independent 23
70	72		living unit at a continuing care retirement community. A purchase and sale 24
71	73		agreement for an independent living unit shall not be considered a binding 25
72	74		reservation agreement for the purposes of this Article. 26
73	75		(11) Cancel. – To terminate the force and effect of an agreement or contract. 27
74	76		(12) Continuing care. – The rendering to an individual other than an individual 28
75	77		related by blood, marriage, or adoption to the person rendering the care, of 29
76	78		housing in an independent living unit, together with related services, including 30
77	79		access, when needed, to progressive levels of health care, including either 31
78	80		assisted living care, as defined in G.S. 131D-2.1, or nursing care, as defined 32
79	81		in G.S. 131E-176, or both, regardless of whether the health care is provided at 33
80	82		the continuing care retirement community where the individual resides or 34
81	83		another location, or through a contractual relationship with a third party, 35
82	84		pursuant to a contract effective for the life of the individual or for a period 36
83	85		longer than one year. 37
84	86		(13) Continuing care at home. – A program offered by a provider holding a 38
85	87		permanent license under this Article that provides continuing care to an 39
86	88		individual who is not yet receiving housing, which may include programs that 40
87	89		offer an individual an opportunity to move to an independent living unit at a 41
88	90		future date, if desired, according to the provider's established priority and 42
89	91		admissions policies at the continuing care retirement community sponsoring 43
90	92		the continuing care at home program. 44
91	93		(14) Continuing care retirement community. – A retirement community consisting 45
92	94		of one or more structures where a provider renders continuing care to 46
93	95		residents. A distinct phase of development approved by the Commissioner 47
94	96		may be considered to be the continuing care retirement community when a 48
95	97		project is being developed in successive distinct phases over a period of time. 49
96	98		(15) Control. – The direct or indirect ability to direct or cause the direction of the 50
97	99		management and policies of a person, including the right to designate or elect 51 General Assembly Of North Carolina Session 2025
98		-	House Bill 357-~~Second~~ Edition Page 3
	100	+	House Bill 357-First Edition Page 3
99	101		not less than a majority of the members of its board of directors or other 1
100	102		governing board or body. 2
101	103		(16) Controlling person. – The person that controls an applicant or provider. 3
102	104		(17) Debt service coverage ratio. – A capital structure ratio that measures a 4
103	105		provider's ability to pay annual debt service with cash flow from net cash 5
104	106		revenues and net entrance fee receipts. The quotient shall be calculated by 6
105	107		dividing the sum of total excess of revenues over or under expenses plus 7
106	108		interest expense, depreciation expense, amortization expense, other noncash 8
107	109		operating losses or expenses, and net cash proceeds from entrance fees, minus 9
108	110		entrance fee amortization, entrance fee refunds contractually past due, and 10
109	111		other noncash operating gains or revenues divided by annual debt service. 11
110	112		Entrance fees received from the initial residents of independent living units at 12
111	113		a continuing care retirement community that have been financed in whole or 13
112	114		in part with the proceeds of indebtedness shall be excluded from the net 14
113	115		proceeds from entrance fees up to an amount equal to the aggregate of the 15
114	116		principal amount of the indebtedness. 16
115	117		(18) Deposit. – Any transfer of consideration made by a depositor to a provider to 17
116	118		reserve an independent living unit at a continuing care retirement community. 18
117	119		(19) Entrance fee. – The sum of any initial, amortized, or deferred transfer of 19
118	120		consideration made or to be made by, or on behalf of, an individual entering 20
119	121		into a continuing care or continuing care at home contract. 21
120	122		(20) Escrow agent. – Any person approved by the Commissioner to hold entrance 22
121	123		fees and deposits required to be placed in escrow under this Article. 23
122	124		(21) Escrow agreement. – An agreement between a provider and an escrow agent 24
123	125		by which entrance fees and deposits required to be held in escrow in 25
124	126		accordance with this Article are held by the escrow agent until release is 26
125	127		permitted in accordance with this Article. 27
126	128		(22) Hazardous condition. – A present, or reasonably anticipated future condition, 28
127	129		whereby (i) a provider is unlikely to be able to meet its continuing care 29
128	130		obligations or to pay other obligations in the normal course of business or (ii) 30
129	131		the continued operation of a provider or continuing care retirement 31
130	132		community in its current condition is potentially harmful to depositors, 32
131	133		residents, creditors, or the general public. 33
132	134		(23) Housing. – A living unit set forth in a continuing care contract. 34
133	135		(24) Independent certified public accountant. – A certified public accountant or 35
134	136		accounting firm in good standing with the American Institute of Certified 36
135	137		Public Accountants and in all states in which he or she is licensed to practice 37
136	138		who is not employed by, or otherwise affiliated with, an applicant or provider. 38
137	139		(25) Independent living unit. – A living unit in a continuing care retirement 39
138	140		community for residents who are routinely able to carry out activities of daily 40
139	141		living, as defined in G.S. 160D-915, with minimal or no assistance. The 41
140	142		accommodations may be in the form of apartments, flats, houses, cottages, 42
141	143		condominium units, or rooms. Receiving home care or similar services, 43
142	144		regardless of whether the services are provided by the provider or another 44
143	145		person, does not preclude a living unit from being considered an independent 45
144	146		living unit. 46
145	147		(26) Insolvent. – A condition whereby the provider is unable to pay its obligations 47
146	148		as they come due in the normal course of business. 48
147	149		(27) Living unit. – An independent living unit, adult care home bed, nursing bed, 49
148	150		or other area within a continuing care retirement community set aside for the 50
149	151		exclusive use or control of one or more identified residents. 51 General Assembly Of North Carolina Session 2025
150		-	Page 4 House Bill 357-~~Second~~ Edition
	152	+	Page 4 House Bill 357-First Edition
151	153		(28) Long-term care facility. – As defined in G.S. 131E-231. 1
152	154		(29) Manager. – A person who administers the day-to-day business operations of 2
153	155		a continuing care retirement community for a provider, subject to the policies, 3
154	156		directives, and oversight of the provider. 4
155	157		(30) Net cash proceeds from entrance fees. – Total entrance fees received less 5
156	158		entrance fees refunded, and less initial entrance fees received for new 6
157	159		independent living units. 7
158	160		(31) Nonbinding reservation agreement. – An agreement between a provider and a 8
159	161		depositor, which may be canceled by either party upon written notice at any 9
160	162		time, confirming a person's desire to reserve an independent living unit at a 10
161	163		continuing care retirement community on a nonbinding basis. 11
162	164		(32) Obligated group. – One or more persons that agree to be jointly and severally 12
163	165		bound by a financing structure containing security provisions and covenants 13
164	166		applicable to the group. 14
165	167		(33) Occupancy rate. – A ratio used to show the actual occupancy or utilization of 15
166	168		living units, calculated by living unit type, at a continuing care retirement 16
167	169		community for a given time period expressed as a percent. The occupancy rate 17
168	170		shall be a rolling average that is equal to 100 times the quotient obtained by 18
169	171		dividing occupied living unit days by living unit days available. For purposes 19
170	172		of this definition, "living unit days available" is the maximum number of 20
171	173		living unit days that would have been provided if all available living units 21
172	174		were filled during the given time period. The total shall equal the sum of all 22
173	175		living units, minus any living units that are unavailable for occupancy, on each 23
174	176		day for the given time period. For purposes of this definition, "occupied living 24
175	177		unit days" is the sum of each daily living unit census at the continuing care 25
176	178		retirement community for a given time period, excluding any second person 26
177	179		occupants. The total shall equal the sum of each daily census for the given 27
178	180		time period. 28
179	181		(34) Periodic fee. – The fee charged to a resident on a monthly or other periodic 29
180	182		basis for housing, services, or both. 30
181	183		(35) Person. – An individual, partnership, firm, association, corporation, 31
182	184		joint-stock company, trust, any similar entity, or any combination of the 32
183	185		foregoing acting in concert. 33
184	186		(36) Presale. – Entering into an agreement or contract with a depositor for an 34
185	187		independent living unit that is not yet constructed or available for occupancy. 35
186	188		(37) Primary market area. – The area from which a continuing care retirement 36
187	189		community will likely draw the majority of its residents. 37
188	190		(38) Prospective financial statements. – Financial forecasts or financial 38
189	191		projections, including the summaries of significant assumptions and 39
190	192		accounting policies prepared by an independent certified public accountant. 40
191	193		(39) Provider. – A person that offers or undertakes to provide continuing care under 41
192	194		a continuing care or continuing care at home contract, or that represents 42
193	195		himself, herself, or itself as providing continuing care. For the purposes of this 43
194	196		Article, the term provider shall also include a person who has been issued a 44
195	197		permit to accept deposits, a start-up certificate, or a preliminary certificate. 45
196	198		(40) Related party. – A person or persons that have common interests with a 46
197	199		provider as a result of ownership, control, or by contract, including affiliates, 47
198	200		principal owners, management, or their affiliates and their management and 48
199	201		members of the immediate family of the principal owners, management, or 49
200	202		their affiliates and their management. 50 General Assembly Of North Carolina Session 2025
201		-	House Bill 357-~~Second~~ Edition Page 5
	203	+	House Bill 357-First Edition Page 5
202	204		(41) Resident. – An individual who enters into a continuing care or continuing care 1
203	205		at home contract with a provider, or who is designated to be the individual to 2
204	206		receive care under the contract. 3
205	207		(42) Satisfactory actuarial balance. – Meeting all of the required conditions, as of 4
206	208		a specified valuation date, as set forth in accordance with accepted actuarial 5
207	209		standard of practice. 6
208	210		"§ 58-64A-10. Rulemaking authority. 7
209	211		The Commissioner may adopt rules to implement the provisions of this Article. 8
210	212		"§ 58-64A-15. Dividends and distributions. 9
211	213		No dividend or other distribution of equity or net assets shall be paid by any provider after 10
212	214		the Commissioner has determined that the provider is in a hazardous condition or has been 11
213	215		determined to not be in satisfactory actuarial balance in an actuarial study filed with the 12
214	216		Commissioner pursuant to G.S. 58-64A-210, or when the payment would have the effect of 13
215	217		creating a hazardous condition in the provider or cause the provider to not be in satisfactory 14
216	218		actuarial balance. 15
217	219		"§ 58-64A-20. Commissioner approval required to offer or provide continuing care. 16
218	220		No person shall engage in the business of offering or providing continuing care in this State 17
219	221		without a certification, license, permit, or other approval from the Commissioner as provided in 18
220	222		this Article. Engaging in the business of offering or providing continuing care in this State 19
221	223		includes all of the following: 20
222	224		(1) Accepting any deposit or any other payment that is related to continuing care. 21
223	225		(2) Entering into any nonbinding reservation agreement, binding reservation 22
224	226		agreement, continuing care contract, or continuing care at home contract. 23
225	227		(3) Commencing construction of a prospective continuing care retirement 24
226	228		community. 25
227	229		(4) Converting an existing building or buildings to a continuing care retirement 26
228	230		community. 27
229	231		(5) Executing new nonbinding reservation agreements, binding reservation 28
230	232		agreements, continuing care contracts, or continuing care at home contracts 29
231	233		after a permit, certificate, or license issued pursuant to this Article has been 30
232	234		inactivated, surrendered, or forfeited. 31
233	235		(6) Assuming responsibility for continuing care and continuing care at home 32
234	236		contracts. 33
235	237		(7) Advertising or marketing to the general public any product similar to 34
236	238		continuing care through the use of such terms as "life care," "life plan," 35
237	239		"continuing care," or "guaranteed care for life," or similar terms, words, or 36
238	240		phrases. 37
239	241		"§ 58-64A-25. Leasing real property for a continuing care retirement community. 38
240	242		(a) An applicant or provider who intends to collect or does collect entrance fees shall not 39
241	243		lease any land or other real property from another person if the land or other real property is to 40
242	244		be used as a material part of a continuing care retirement community operated by the applicant 41
243	245		or provider without first obtaining approval from the Commissioner. 42
244	246		(b) When considering whether to allow an applicant or provider to lease any of the real 43
245	247		property of a continuing care retirement community under this section, the Commissioner shall 44
246	248		consider all relevant factors, including all of the following: 45
247	249		(1) The terms of the proposed lease, including the proposed length of the lease 46
248	250		and any proposed purchase options. 47
249	251		(2) The owner of the real property and the owner's relationship to the applicant or 48
250	252		provider. 49
251	253		(3) The distance from any existing real property owned by the applicant or 50
252	254		provider. 51 General Assembly Of North Carolina Session 2025
253		-	Page 6 House Bill 357-~~Second~~ Edition
	255	+	Page 6 House Bill 357-First Edition
254	256		"§ 58-64A-30. Required electronic filings and submissions. 1
255	257		Except when required by the Commissioner to submit a hard copy, all applicants and 2
256	258		providers shall submit all filings required by this Article electronically, in a form and manner 3
257	259		acceptable to the Commissioner and in compliance with the Uniform Electronic Transactions 4
258	260		Act. 5
259	261		"§ 58-64A-35. Waiver or modification. 6
260	262		The Commissioner may waive or modify any provision of this Article if the Commissioner 7
261	263		determines a waiver or modification is justified based on any of the following: 8
262	264		(1) A state of emergency or disaster being proclaimed in this State or for an area 9
263	265		within this State under G.S. 166A-19.20 or G.S. 166A-19.21 or whenever the 10
264	266		President of the United States has issued a major disaster declaration for the 11
265	267		State or for an area within the State under the Stafford Act, 42 U.S.C. § 5121, 12
266	268		et seq. 13
267	269		(2) An incident beyond a provider's reasonable control, including an act of God, 14
268	270		insurrection, strike, fire, pandemic, epidemic, power outage, or systemic 15
269	271		technological failure that substantially affects the daily business operations of 16
270	272		a provider or a continuing care retirement community. 17
271	273		"§ 58-64A-40. Confidential treatment. 18
272	274		(a) All of the following shall be confidential and privileged, shall not be considered a 19
273	275		public record under either G.S. 58-2-100 or Chapter 132 of the General Statutes, shall not be 20
274	276		subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private 21
275	277		civil action: 22
276	278		(1) Any third-party management contract or proposed management contract 23
277	279		provided to the Commissioner pursuant to G.S. 58-64A-55(a)(3) or 24
278	280		G.S. 58-64A-240(a). 25
279	281		(2) Any lease agreement or proposed lease agreement provided to the 26
280	282		Commissioner pursuant to G.S. 58-64A-25 or G.S. 58-64A-55(a)(4). 27
281	283		(3) Any request for approval provided to the Commissioner pursuant to 28
282	284		G.S. 58-64A-230(d) or G.S. 58-64A-235(a). 29
283	285		(4) The actuarial study, other than the statement of actuarial opinion, provided to 30
284	286		the Commissioner pursuant to G.S. 58-64A-60(a)(3), 58-64A-90(b)(3), 31
285	287		58-64A-185(a)(4), or 58-64A-210. 32
286	288		(5) Any market study provided to the Commissioner pursuant to 33
287	289		G.S. 58-64A-55(a)(9) or G.S. 58-64A-185(a)(5). 34
288	290		(6) Any feasibility study provided to the Commissioner pursuant to 35
289	291		G.S. 58-64A-60(a)(2) or G.S. 58-64A-90(b)(2). 36
290	292		(7) Documents, materials, or other information in the possession or control of the 37
291	293		Commissioner that are obtained by or disclosed to the Commissioner or any 38
292	294		other person in the course of an investigation or examination made pursuant 39
293	295		to G.S. 58-64A-295 or G.S. 58-64A-380. 40
294	296		(8) All working papers, information, documents, and copies of those materials 41
295	297		produced by, obtained by, or disclosed to the Commissioner in connection 42
296	298		with the financial analysis of a provider by the Commissioner. 43
297	299		(b) Notwithstanding subsection (a) of this section, the Commissioner is authorized to use 44
298	300		these documents, materials, or other information in the furtherance of any regulatory or legal 45
299	301		action brought as a part of the Commissioner's official duties. The Commissioner shall not 46
300	302		otherwise make these documents, materials, or other information public without the prior written 47
301	303		consent of the provider to which it pertains unless the Commissioner, after giving the provider 48
302	304		and its related parties who would be affected thereby notice and opportunity to be heard, 49
303	305		determines that the interest of residents or the public will be served by their publication, in which 50 General Assembly Of North Carolina Session 2025
304		-	House Bill 357-~~Second~~ Edition Page 7
	306	+	House Bill 357-First Edition Page 7
305	307		event the Commissioner may publish all or any part of the information in a manner deemed 1
306	308		appropriate by the Commissioner. 2
307	309		(c) Neither the Commissioner nor any person who received any documents, materials, or 3
308	310		other information while acting under the authority of the Commissioner pursuant to this Article 4
309	311		or with whom any documents, materials, or other information are shared pursuant to this Article 5
310	312		shall be permitted or required to testify in any private civil action concerning any confidential 6
311	313		documents, materials, or information subject to subsection (a) of this section. 7
312	314		(d) Any document, material, or other information that is shared with the Commissioner 8
313	315		that is not covered under subsection (a) of this section that an applicant, provider, or other person 9
314	316		believes is confidential or a trade secret should be marked as confidential or as a trade secret 10
315	317		before submitting to the Commissioner. Any document, material, or other information that is not 11
316	318		marked as confidential is not eligible for confidential treatment pursuant to G.S. 132-1.2. 12
317	319		(e) To assist in the performance of the duties imposed by this Article, the Commissioner 13
318	320		may do both of the following: 14
319	321		(1) Share documents, materials, or other information, including the confidential 15
320	322		and privileged documents, materials, or information subject to subsection (a) 16
321	323		or (d) of this section, with other state, federal, and international regulatory 17
322	324		agencies, and with state, federal, and international law enforcement 18
323	325		authorities, provided that the recipient agrees in writing to maintain the 19
324	326		confidentiality and privileged status of the document, material, or other 20
325	327		information and has verified in writing the legal authority to maintain 21
326	328		confidentiality. 22
327	329		(2) Receive documents, materials, or information, including otherwise 23
328	330		confidential and privileged documents, materials, or information from 24
329	331		regulatory and law enforcement officials of other foreign or domestic 25
330	332		jurisdictions, and shall maintain as confidential or privileged any document, 26
331	333		material, or information received with notice or the understanding that it is 27
332	334		confidential or privileged under the laws of the jurisdiction that is the source 28
333	335		of the document, material, or information. 29
334	336		(f) The sharing of information by the Commissioner pursuant to this section shall not 30
335	337		constitute a delegation of regulatory authority or rulemaking, and the Commissioner is solely 31
336	338		responsible for the administration, execution, and enforcement of the provisions of this Article. 32
337	339		(g) No waiver of any applicable privilege or claim of confidentiality in the documents, 33
338	340		materials, or information shall occur as a result of disclosure to the Commissioner under this 34
339	341		section or as a result of sharing as authorized in subsection (e) of this section. 35
340	342		"§ 58-64A-45. Advertisement in conflict with disclosures and contracts. 36
341	343		A provider may not engage in any type of advertisement for a continuing care retirement 37
342	344		community if the advertisement contains a statement or representation which materially conflicts 38
343	345		with the disclosures required under this Article or materially conflicts with any continuing care 39
344	346		or continuing care at home contract offered by the provider. 40
345	347		"Part 2. Approval, Certification, Licensure, and Permitting Process. 41
346	348		"§ 58-64A-50. Permit to accept deposits. 42
347	349		(a) No person shall market a proposed continuing care retirement community without a 43
348	350		permit from the Commissioner. A person may apply for a permit by paying an application fee of 44
349	351		two hundred dollars ($200.00) and filing an application on a form prescribed by the 45
350	352		Commissioner. The application form shall include all of the following: 46
351	353		(1) The name, business address, and telephone number of the applicant. 47
352	354		(2) The name and business address of the applicant's controlling person, if control 48
353	355		of the applicant does not reside with the applicant. 49
354	356		(3) A proposed nonbinding reservation agreement. 50 General Assembly Of North Carolina Session 2025
355		-	Page 8 House Bill 357-~~Second~~ Edition
	357	+	Page 8 House Bill 357-First Edition
356	358		(4) A proposed escrow agreement that meets the requirements of 1
357	359		G.S. 58-64A-105. 2
358	360		(5) A description of the proposed continuing care retirement community which 3
359	361		shall include all of the following: 4
360	362		a. The location of the proposed continuing care retirement community. 5
361	363		b. The types of living units to be offered. 6
362	364		c. The types of continuing care contracts to be offered. 7
363	365		d. A description of the services that will be provided to residents, 8
364	366		including an indication if any services will be provided by any related 9
365	367		parties or third parties. 10
366	368		e. A description of the applicant's corporate structure and experience in 11
367	369		developing or operating continuing care retirement communities, 12
368	370		including the experience of any related party of the applicant. 13
369	371		(b) The Commissioner shall comply with the review schedule in G.S. 58-64A-70 in 14
370	372		response to an application for a permit to accept deposits. 15
371	373		(c) The Commissioner shall approve an application for a permit to accept deposits if all 16
372	374		of the following requirements are met: 17
373	375		(1) The application complies with this section. 18
374	376		(2) None of the grounds for denial listed in G.S. 58-64A-280 apply to the 19
375	377		applicant. 20
376	378		(3) The proposed escrow agreement meets the requirements of G.S. 58-64A-105. 21
377	379		(4) The proposed escrow agent and depository are acceptable in accordance with 22
378	380		G.S. 58-64A-100. 23
379	381		(d) After the issuance of a permit to accept deposits, the applicant may do all of the 24
380	382		following: 25
381	383		(1) Disseminate materials describing the intent to develop a continuing care 26
382	384		retirement community. 27
383	385		(2) Enter into nonbinding reservation agreements. 28
384	386		(3) Collect deposits in an amount not to exceed five thousand dollars ($5,000). 29
385	387		All deposits collected shall be placed in escrow and shall only be released in 30
386	388		accordance with Part 4 of this Article. 31
387	389		(e) After the issuance of a permit to accept deposits, the Commissioner shall require the 32
388	390		provider to file periodic status reports in a form prescribed by the Commissioner. 33
389	391		"§ 58-64A-55. Start-up certificate. 34
390	392		(a) A person may apply for a start-up certificate by paying an application fee of two 35
391	393		thousand dollars ($2,000) and submitting all of the following to the Commissioner for review: 36
392	394		(1) A statement signed by the applicant, under penalty of perjury, certifying that 37
393	395		to the best of the applicant's knowledge and belief, the items submitted in the 38
394	396		application are correct. If the applicant is a corporation, the chief executive 39
395	397		officer or other authorized individual shall sign the statement. If there are 40
396	398		multiple applicants, these requirements shall apply to each applicant. 41
397	399		(2) A statement disclosing any revocation or other disciplinary action taken, or in 42
398	400		the process of being taken, against a license, permit, or certificate held or 43
399	401		previously held by the applicant, any current or former related party, or any 44
400	402		person included or to be included in a current or proposed obligated group. 45
401	403		(3) If the applicant intends to employ a third-party management company to 46
402	404		manage the continuing care retirement community, a copy of the management 47
403	405		contract or proposed management contract, if available, along with a narrative 48
404	406		describing the proposed third-party management company's experience 49
405	407		managing continuing care retirement communities. 50 General Assembly Of North Carolina Session 2025
406		-	House Bill 357-~~Second~~ Edition Page 9
	408	+	House Bill 357-First Edition Page 9
407	409		(4) If the applicant intends to lease any land or other real property to be used as 1
408	410		part or all of the proposed continuing care retirement community, the name of 2
409	411		the person from whom the land or other real property will be leased along with 3
410	412		a copy of the lease agreement, or proposed lease agreement, if available, or a 4
411	413		statement describing the applicant's intentions, including the intended length 5
412	414		of the lease, if a lease agreement or proposed lease agreement is not available. 6
413	415		If the applicant intends to lease any of the real property of the continuing care 7
414	416		retirement community and to collect entrance fees, Commissioner approval 8
415	417		must be received pursuant to G.S. 58-64A-25. 9
416	418		(5) If the applicant is not the owner of the proposed site, a statement identifying 10
417	419		the current owner and any plans the applicant has for acquiring the proposed 11
418	420		site, including details of any purchase option and requirements for a purchase 12
419	421		option deposit. If a purchase option requires a purchase option deposit, the 13
420	422		purchase option deposit shall be placed in escrow or secured in a manner 14
421	423		acceptable to the Commissioner. 15
422	424		(6) A list of all continuing care retirement communities currently or previously 16
423	425		owned, operated, managed, or developed by the applicant or any related party 17
424	426		of the applicant. The list shall do all of the following: 18
425	427		a. Furnish the name, address, city, and state of each continuing care 19
426	428		retirement community listed, and explain the existing or past 20
427	429		relationship to the applicant. 21
428	430		b. Specify the current status of each continuing care retirement 22
429	431		community listed and include any administrative actions or financial 23
430	432		problems that currently exist, or have existed, within three years after 24
431	433		any relationship was terminated. 25
432	434		(7) A disclosure statement that meets the requirements of G.S. 58-64A-150. 26
433	435		(8) If the applicant intends to enter into binding reservation agreements, a copy 27
434	436		of the binding reservation agreement that the applicant intends to use. 28
435	437		(9) A market study prepared by a person experienced in the preparation of 29
436	438		continuing care retirement community market studies. 30
437	439		(10) Any other data, financial statements, and pertinent information as the 31
438	440		Commissioner may reasonably require with respect to the applicant, the 32
439	441		applicant's controlling person, or the proposed continuing care retirement 33
440	442		community to assist in determining the market and financial viability of the 34
441	443		proposed continuing care retirement community and the competency, 35
442	444		experience, and integrity of the applicant's and, if applicable, the applicant's 36
443	445		controlling person's, governing body, officers, and management. 37
444	446		(b) The Commissioner shall comply with the review schedule in G.S. 58-64A-70 in 38
445	447		response to an application for a start-up certificate. 39
446	448		(c) The Commissioner shall approve an application for a start-up certificate if all of the 40
447	449		following requirements are met: 41
448	450		(1) The application complies with this section. 42
449	451		(2) None of the grounds for denial listed in G.S. 58-64A-280 apply to the 43
450	452		applicant. 44
451	453		(3) The disclosure statement meets the requirements of G.S. 58-64A-150. 45
452	454		(4) A market for the proposed continuing care retirement community appears to 46
453	455		exist and the continuing care retirement community appears to be financially 47
454	456		viable, as evidenced by the market study and the five-year prospective 48
455	457		financial statements included in the applicant's disclosure statement. 49 General Assembly Of North Carolina Session 2025
456		-	Page 10 House Bill 357-~~Second~~ Edition
	458	+	Page 10 House Bill 357-First Edition
457	459		(5) The applicant's and, if applicable, the applicant's controlling person's, 1
458	460		governing body, officers, and management are, in the Commissioner's 2
459	461		opinion, competent, experienced, and of good integrity. 3
460	462		(d) After issuing a start-up certificate, the Commissioner shall do all of the following: 4
461	463		(1) Require the provider to submit periodic sales, development, and unaudited 5
462	464		financial statements in a form prescribed by the Commissioner. 6
463	465		(2) Post the disclosure statement of the continuing care retirement community on 7
464	466		the Department's website. 8
465	467		(e) After receiving a start-up certificate from the Commissioner, the provider may do all 9
466	468		of the following: 10
467	469		(1) Enter into binding reservation agreements and continuing care contracts. 11
468	470		(2) Accept entrance fees and deposits greater than five thousand dollars ($5,000). 12
469	471		All or any part of an entrance fee or deposit collected shall be placed in escrow 13
470	472		and shall only be released in accordance with Part 4 of this Article. 14
471	473		(3) Begin site preparation work. 15
472	474		(4) Construct model independent living units for marketing. 16
473	475		"§ 58-64A-60. Preliminary certificate. 17
474	476		(a) A person may apply for a preliminary certificate by submitting all of the following to 18
475	477		the Commissioner for review: 19
476	478		(1) A statement signed by the applicant, under penalty of perjury, certifying that 20
477	479		to the best of the applicant's knowledge and belief, the items submitted in the 21
478	480		application are correct. If the applicant is a corporation, the chief executive 22
479	481		officer or other authorized individual shall sign the statement. If there are 23
480	482		multiple applicants, these requirements shall apply to each applicant. 24
481	483		(2) A feasibility study, prepared by an independent person experienced in 25
482	484		preparing feasibility studies for continuing care retirement communities, with 26
483	485		financial, marketing, and actuarial assumptions that projects the market and 27
484	486		financial viability of the proposed continuing care retirement community. The 28
485	487		study shall include all of the following: 29
486	488		a. A description of the proposed continuing care retirement community, 30
487	489		its service package, the number and type of living units, fee structure, 31
488	490		and anticipated opening date, including a detailed schedule of 32
489	491		projected periodic fees and a description of how the projected periodic 33
490	492		fees were computed. 34
491	493		b. A description of any proposed construction plans, construction 35
492	494		financing, and permanent financing for the proposed continuing care 36
493	495		retirement community. 37
494	496		c. A description of the anticipated source, cost, terms, and uses of all 38
495	497		funds to be used in the real property acquisition, construction, 39
496	498		marketing, and operation for the proposed continuing care retirement 40
497	499		community, including all of the following: 41
498	500		1. A description of all debt to be incurred by the applicant, 42
499	501		including the source, anticipated terms, and costs of financing. 43
500	502		2. A description of the source and amount of equity to be 44
501	503		contributed by the applicant or any other person. 45
502	504		3. A description of the source and amount of all other funds, 46
503	505		including entrance fees, that will be necessary to complete and 47
504	506		operate the proposed continuing care retirement community. 48
505	507		4. A statement itemizing all estimated project costs, including the 49
506	508		real property costs, the cost of acquiring or designing and 50
507	509		constructing the proposed continuing care retirement 51 General Assembly Of North Carolina Session 2025
508		-	House Bill 357-~~Second~~ Edition Page 11
	510	+	House Bill 357-First Edition Page 11
509	511		community, and all similar costs that the applicant expects to 1
510	512		incur prior to the commencement of operation. This 2
511	513		itemization shall identify all costs related to the proposed 3
512	514		continuing care retirement community, including financing 4
513	515		expenses, resident acquisition costs, marketing costs, and 5
514	516		furniture and equipment. 6
515	517		5. An estimate of any reserves required by financing and the 7
516	518		operating reserve required pursuant to Part 11 of this Article. 8
517	519		6. An estimate of the amount of funds, if any, that will be 9
518	520		necessary to fund start-up losses and to otherwise provide 10
519	521		additional financial resources in an amount sufficient to ensure 11
520	522		full performance by the applicant of its continuing care 12
521	523		contract obligations. 13
522	524		d. An analysis of the potential market for the applicant's proposed 14
523	525		continuing care retirement community, addressing all of the following: 15
524	526		1. The population, household growth, age distribution, household 16
525	527		income, household tenure, and resale housing values within the 17
526	528		primary market area. 18
527	529		2. A demand analysis of the range of likely target consumers 19
528	530		within the primary market area as well as estimated penetration 20
529	531		rates. 21
530	532		3. An economic analysis of current market conditions and trends 22
531	533		that can impact the feasibility of the proposed continuing care 23
532	534		retirement community, positively or negatively, including real 24
533	535		estate, income, employment, and the general economic outlook 25
534	536		for the primary market area and surrounding areas. 26
535	537		4. An analysis of the project location and immediate area in 27
536	538		relationship to key variables, including accessibility, 28
537	539		employment, and proximity to health care, retail, and other 29
538	540		services. 30
539	541		5. The types of services and amenities desired and the forms of 31
540	542		ownership or interest in real property preferred. 32
541	543		6. Existing and planned competition in the primary market area. 33
542	544		e. A description of the sales and marketing plan, including all of the 34
543	545		following: 35
544	546		1. Marketing projections, anticipated sales, and cancellation 36
545	547		rates. 37
546	548		2. Month-by-month projections of independent living unit sales 38
547	549		through stabilized occupancy. 39
548	550		3. A description of the marketing methods, staffing, and 40
549	551		advertising media to be used by the applicant. 41
550	552		4. An estimate of the total entrance fees to be received prior to 42
551	553		opening the proposed continuing care retirement community. 43
552	554		f. Projected move-in rates and resident profiles, including couple mix by 44
553	555		living unit type, age distribution, adult care home bed and nursing bed 45
554	556		utilization, and living unit turnover or resale rates. 46
555	557		g. A description or analysis of costs and revenues throughout the 47
556	558		development and resident fill-up period of the proposed continuing 48
557	559		care retirement community. 49
558	560		h. Prospective financial statements for the period commencing on the 50
559	561		first day of the applicant's current fiscal year through at least the fifth 51 General Assembly Of North Carolina Session 2025
560		-	Page 12 House Bill 357-~~Second~~ Edition
	562	+	Page 12 House Bill 357-First Edition
561	563		year of operation which shall be prepared in accordance with standards 1
562	564		adopted by the American Institute of Certified Public Accountants. 2
563	565		i. Any other factors that, in the opinion of the preparer, will affect the 3
564	566		feasibility of the proposed continuing care retirement community. 4
565	567		j. The name of the person who prepared the feasibility study and the 5
566	568		experience of the person in preparing similar studies or otherwise 6
567	569		consulting in the field of continuing care. 7
568	570		k. An evaluation and opinion by the person who prepared the feasibility 8
569	571		study of the underlying assumptions used as a basis for the study, 9
570	572		including a statement on whether the assumptions are reasonable and 10
571	573		proper. 11
572	574		(3) An actuarial study prepared in accordance with accepted actuarial standards 12
573	575		of practice which estimates the earliest year that the proposed continuing care 13
574	576		retirement community is projected to be in satisfactory actuarial balance. 14
575	577		Applicants who do not or will not collect entrance fees or some other 15
576	578		prepayment of costs are exempt from this requirement and shall only be 16
577	579		required to submit an actuarial projection of future population flows and adult 17
578	580		care home bed and nursing bed needs. An actuarial projection of future 18
579	581		population flows and adult care home bed and nursing bed needs shall use (i) 19
580	582		appropriate mortality, morbidity, withdrawal, occupancy, and other 20
581	583		demographic assumptions and (ii) a projection period that extends to a point 21
582	584		at which, in the actuary's professional judgment, the use of a longer period 22
583	585		would not materially affect the results and conclusions. 23
584	586		(4) An updated disclosure statement that meets the requirements of 24
585	587		G.S. 58-64A-150. 25
586	588		(5) At least one of the following: 26
587	589		a. Confirmation of signed binding reservation agreements or continuing 27
588	590		care contracts for at least fifty percent (50%) of the new independent 28
589	591		living units, reserved by a deposit equal to at least ten percent (10%) 29
590	592		of the entrance fee. 30
591	593		b. Confirmation of signed binding reservation agreements or continuing 31
592	594		care contracts for at least fifty percent (50%) of the new independent 32
593	595		living units, reserved by a nonrefundable deposit equal to the periodic 33
594	596		fee for at least two months for proposed continuing care retirement 34
595	597		communities that have no entrance fee. 35
596	598		c. Confirmation of one hundred thousand dollars ($100,000) placed on 36
597	599		deposit with the Commissioner, if the applicant (i) does not collect 37
598	600		presale entrance fees or deposits in an amount equal to at least ten 38
599	601		percent (10%) of the entrance fee or (ii) does not collect presale 39
600	602		entrance fees or deposits and does not collect nonrefundable deposits 40
601	603		equal to the periodic fee of at least two months. This deposit is subject 41
602	604		to the following requirements: 42
603	605		1. The deposit shall only be returned to the applicant upon 43
604	606		issuance of a permanent license. 44
605	607		2. The deposit shall be made in accordance with G.S. 58-5-20. 45
606	608		3. The deposit shall automatically be forfeited if the applicant 46
607	609		does not obtain a permanent license within five years after the 47
608	610		issuance of a preliminary certificate. Forfeited deposits shall 48
609	611		be remitted to the Civil Penalty and Forfeiture Fund in 49
610	612		accordance with G.S. 115C-457.2. 50 General Assembly Of North Carolina Session 2025
611		-	House Bill 357-~~Second~~ Edition Page 13
	613	+	House Bill 357-First Edition Page 13
612	614		(6) If applicable, confirmation that commitments have been secured for 1
613	615		construction financing and long-term financing or that a documented plan 2
614	616		acceptable to the Commissioner has been adopted by the applicant for 3
615	617		long-term financing. 4
616	618		(b) The Commissioner shall comply with the review schedule in G.S. 58-64A-70 in 5
617	619		response to an application for a preliminary certificate. 6
618	620		(c) The Commissioner shall approve an application for a preliminary certificate if all of 7
619	621		the following requirements are met: 8
620	622		(1) The application complies with this section. 9
621	623		(2) None of the grounds for denial listed in G.S. 58-64A-280 apply to the 10
622	624		applicant. 11
623	625		(3) The feasibility study meets all of the following requirements: 12
624	626		a. Includes in the prospective financial statements all obligations and 13
625	627		liabilities to be undertaken by the applicant pursuant to the terms of 14
626	628		the proposed continuing care contracts. 15
627	629		b. Demonstrates that the anticipated sources of funds to finance and 16
628	630		operate the proposed continuing care retirement community are equal 17
629	631		to or greater than the anticipated uses of funds to (i) construct or 18
630	632		acquire the proposed continuing care retirement community and (ii) 19
631	633		fund start-up losses and provide sufficient resources to ensure full 20
632	634		performance of the applicant's continuing care contract obligations. 21
633	635		c. Demonstrates that the continuing care retirement community is 22
634	636		financially feasible. 23
635	637		(4) A market for the continuing care retirement community appears to exist, based 24
636	638		on data that meets all of the following requirements: 25
637	639		a. Is specific to the proposed continuing care retirement community. 26
638	640		b. Considers existing and proposed competition in the primary market 27
639	641		area. 28
640	642		c. Demonstrates the existence of a market for the age, marital status, 29
641	643		number, population trends, net worth, home values, and income of the 30
642	644		potential residents. 31
643	645		d. Demonstrates that the rate of penetration in the proposed market area 32
644	646		is within acceptable industry ranges. 33
645	647		(5) The actuarial study, if applicable, projects that the proposed continuing care 34
646	648		retirement community will be in satisfactory actuarial balance within a 35
647	649		reasonable period of time after achieving stabilized occupancy, as determined 36
648	650		by the Commissioner, or if no actuarial study is required, the actuarial 37
649	651		projection of future population flows demonstrates a sufficient number of 38
650	652		adult care home beds and nursing beds to meet the future needs of residents 39
651	653		and the future contractual obligations of the applicant, as determined by the 40
652	654		Commissioner. 41
653	655		(6) The applicant has met one of the requirements in subdivision (5) of subsection 42
654	656		(a) of this section. 43
655	657		(7) If applicable, the applicant has secured commitments for construction 44
656	658		financing and long-term financing or that a documented plan acceptable to the 45
657	659		Commissioner has been adopted by the applicant for long-term financing. 46
658	660		(8) The applicant demonstrates an ability to comply with this Article and to 47
659	661		provide continuing care as proposed and meet all financial obligations related 48
660	662		to its operations. 49
661	663		(d) After issuing a preliminary certificate, the Commissioner shall do both of the 50
662	664		following: 51 General Assembly Of North Carolina Session 2025
663		-	Page 14 House Bill 357-~~Second~~ Edition
	665	+	Page 14 House Bill 357-First Edition
664	666		(1) Require the provider to submit periodic sales, development, and unaudited 1
665	667		financial statements in a form prescribed by the Commissioner. 2
666	668		(2) Post the disclosure statement of the continuing care retirement community on 3
667	669		the Department's website. 4
668	670		(e) After receiving a preliminary certificate from the Commissioner, the provider may do 5
669	671		both of the following: 6
670	672		(1) Construct a continuing care retirement community. 7
671	673		(2) Convert an existing structure or structures into a continuing care retirement 8
672	674		community. 9
673	675		"§ 58-64A-65. Permanent license. 10
674	676		(a) A person may apply for a permanent license by submitting all of the following to the 11
675	677		Commissioner for review: 12
676	678		(1) A statement signed by the applicant, under penalty of perjury, certifying that 13
677	679		to the best of the applicant's knowledge and belief, the items submitted in the 14
678	680		application are correct. If the applicant is a corporation, the chief executive 15
679	681		officer or other authorized individual shall sign the statement. If there are 16
680	682		multiple applicants, these requirements shall apply to each applicant. 17
681	683		(2) An updated disclosure statement that meets the requirements of 18
682	684		G.S. 58-64A-150. 19
683	685		(3) Confirmation that the applicant has established a plan to have health care 20
684	686		available to residents promised in continuing care contracts upon opening, 21
685	687		either by the applicant directly, or through contractual agreements. 22
686	688		(4) At least one of the following: 23
687	689		a. Confirmation of signed binding reservation agreements or continuing 24
688	690		care contracts for at least seventy percent (70%) of the new 25
689	691		independent living units, reserved by a deposit equal to at least ten 26
690	692		percent (10%) of the entrance fee. 27
691	693		b. Confirmation of signed binding reservation agreements or continuing 28
692	694		care contracts for at least seventy percent (70%) of the new 29
693	695		independent living units, reserved by a nonrefundable deposit equal to 30
694	696		the periodic fee for at least two months for proposed continuing care 31
695	697		retirement communities that have no entrance fee. 32
696	698		c. Confirmation of the one hundred thousand dollar ($100,000) deposit 33
697	699		required pursuant to G.S. 58-64A-60(a)(5)c. 34
698	700		(5) Confirmation that the applicant has long-term financing in place, and if the 35
699	701		applicant is leasing the land or other real property of the continuing care 36
700	702		retirement community, confirmation that the lease is in place and, if 37
701	703		applicable, that the lease has been approved by the Commissioner pursuant to 38
702	704		G.S. 58-64A-25. 39
703	705		(6) Confirmation that the applicant is in compliance with all other state, federal, 40
704	706		municipal, and county laws and regulations. If the applicant is not in 41
705	707		compliance, the applicant shall include a statement that describes the nature 42
706	708		of the deficiency. 43
707	709		(7) A statement concerning any litigation, orders, judgments, or decrees which 44
708	710		may involve or impact the applicant or proposed continuing care retirement 45
709	711		community. 46
710	712		(8) Evidence that the applicant has in place the operating reserve required by Part 47
711	713		11 of this Article. 48
712	714		(b) The Commissioner shall comply with the review schedule in G.S. 58-64A-70 in 49
713	715		response to an application for a permanent license. 50 General Assembly Of North Carolina Session 2025
714		-	House Bill 357-~~Second~~ Edition Page 15
	716	+	House Bill 357-First Edition Page 15
715	717		(c) The Commissioner shall approve an application for a permanent license if all of the 1
716	718		following requirements are met: 2
717	719		(1) The application complies with this section. 3
718	720		(2) None of the grounds for denial listed in G.S. 58-64A-280 apply to the 4
719	721		applicant. 5
720	722		(d) After receiving a permanent license from the Commissioner, the provider may do 6
721	723		both of the following: 7
722	724		(1) Open the continuing care retirement community. 8
723	725		(2) Provide continuing care. 9
724	726		(e) If the Commissioner determines that the requirements of subsection (c) of this section 10
725	727		are not met, the Commissioner may do either of the following: 11
726	728		(1) Deny the application. 12
727	729		(2) Issue a restricted permanent license with an explanation of (i) the restrictions 13
728	730		established by the Commissioner under subsection (f) of this section and (ii) 14
729	731		the conditions the provider must satisfy to qualify for a permanent license. 15
730	732		(f) After receiving a restricted permanent license from the Commissioner, the provider 16
731	733		may operate a continuing care retirement community under restrictions established by the 17
732	734		Commissioner until the Commissioner issues a permanent license. When the Commissioner 18
733	735		issues a restricted permanent license, the provider shall inform all depositors and residents within 19
734	736		10 business days of (i) all restrictions imposed by the restricted permanent license and (ii) all 20
735	737		conditions that the provider must satisfy to qualify for a permanent license. 21
736	738		(g) After issuing a permanent license or restricted permanent license, the Commissioner 22
737	739		shall do both of the following: 23
738	740		(1) Require the provider to submit periodic occupancy reports and financial 24
739	741		statements in a form prescribed by the Commissioner. 25
740	742		(2) Post the disclosure statement of the continuing care retirement community on 26
741	743		the Department's website. 27
742	744		(h) A permanent license or restricted permanent license shall be valid for as long as the 28
743	745		Commissioner determines that the provider continues to meet the requirements of this Article. 29
744	746		"§ 58-64A-70. Review schedule. 30
745	747		The Commissioner shall comply with the following schedule in response to an application 31
746	748		for (i) a permit to accept deposits, (ii) a start-up certificate, (iii) a preliminary certificate, (iv) a 32
747	749		permanent license, (v) an expansion, (vi) a continuing care at home license, (vii) an expansion 33
748	750		notification, and (viii) a request for approval pursuant to G.S. 58-64A-230, 58-64A-235, and 34
749	751		58-64A-240: 35
750	752		(1) Within five business days after receipt of an application, a notification, a 36
751	753		request for approval, or of materials intended to supplement an incomplete 37
752	754		application, notification, or request for approval, the Commissioner shall 38
753	755		acknowledge receipt in writing. 39
754	756		(2) Within 10 business days after receipt of an application for a permit to accept 40
755	757		deposits, permanent license, and an expansion notification, or of materials 41
756	758		intended to supplement an incomplete application or expansion notification, 42
757	759		and within 30 days after receipt of an application for a start-up certificate, a 43
758	760		preliminary certificate, a continuing care at home license, and an expansion, 44
759	761		or a request for approval, or of materials intended to supplement an incomplete 45
760	762		application or request for approval, the Commissioner shall determine if the 46
761	763		application, notification, or request for approval is complete and inform the 47
762	764		applicant in writing of the determination. If the Commissioner determines that 48
763	765		the application, notification, or request for approval is incomplete, the notice 49
764	766		to the applicant shall specifically set forth and request any additional 50 General Assembly Of North Carolina Session 2025
765		-	Page 16 House Bill 357-~~Second~~ Edition
	767	+	Page 16 House Bill 357-First Edition
766	768		information the Commissioner determines is necessary to complete the 1
767	769		application, notification, or request for approval. 2
768	770		(3) When the Commissioner determines an application, notification, or request 3
769	771		for approval is complete, the Commissioner shall approve or deny the 4
770	772		application, notification, or request for approval as follows: 5
771	773		a. Within five business days for a permit to accept deposits and an 6
772	774		expansion notification. 7
773	775		b. Within 30 days for a start-up certificate, permanent license, continuing 8
774	776		care at home license, expansion, and a request for approval. 9
775	777		c. Within 45 days for a preliminary certificate. 10
776	778		"§ 58-64A-75. Expiration of a permit to accept deposits and start-up certificate. 11
777	779		(a) A permit to accept deposits and a start-up certificate issued pursuant to this Article 12
778	780		expires 36 months after issuance. 13
779	781		(b) A provider issued a permit to accept deposits or a start-up certificate may request an 14
780	782		extension of the permit or certificate. The request for extension shall be made in writing and 15
781	783		include both of the following: 16
782	784		(1) The reasons why the provider has not applied for a start-up certificate or 17
783	785		preliminary certificate, as applicable. 18
784	786		(2) The estimated date the provider expects to file the start-up certificate 19
785	787		application or the preliminary certificate application, as applicable. 20
786	788		(c) In response to a request for an extension, the Commissioner shall do one of the 21
787	789		following: 22
788	790		(1) If the Commissioner determines there is satisfactory cause for the delay, the 23
789	791		Commissioner shall extend the permit to accept deposits or a start-up 24
790	792		certificate for up to one year and may, in the Commissioner's discretion, 25
791	793		require the provider to update information previously filed pursuant to 26
792	794		G.S. 58-64A-50 or G.S. 58-64A-55 before approving any extension. There is 27
793	795		no limit to the number of extensions that may be granted by the 28
794	796		Commissioner. 29
795	797		(2) If the Commissioner determines that there is no satisfactory cause for the 30
796	798		delay, the Commissioner shall instruct the escrow agent to refund to 31
797	799		depositors all deposits held in escrow, plus any interest that may be due under 32
798	800		the terms of any nonbinding reservation agreement, binding reservation 33
799	801		agreement, or continuing care contract. 34
800	802		(d) Within 10 business days of the Commissioner's denial of an extension, the provider 35
801	803		shall notify each depositor of the Commissioner's denial of the extension, of the expiration of the 36
802	804		permit to accept deposits or a start-up certificate, and of any right to a refund of their deposits. 37
803	805		"§ 58-64A-80. Denial of an application, notification, or other request for approval. 38
804	806		(a) If the Commissioner denies an application, notification, or any other request for 39
805	807		approval pursuant to this Article, the Commissioner shall notify the applicant in writing of the 40
806	808		denial. The notification shall state the grounds for the denial. To obtain a review of the 41
807	809		Commissioner's denial, the applicant shall make written demand upon the Commissioner within 42
808	810		30 days after service upon the applicant of notification of the denial. The review shall be 43
809	811		completed without undue delay, and the applicant shall be notified promptly in writing as to the 44
810	812		outcome of the review. If the applicant disagrees with the outcome of the review and seeks a 45
811	813		hearing under Article 3A of Chapter 150B of the General Statutes, the applicant shall make a 46
812	814		written demand upon the Commissioner for the hearing within 30 days after service upon the 47
813	815		applicant of the notification of the outcome. 48
814	816		(b) If the Commissioner denies an application, notification, or other request for approval 49
815	817		pursuant to this Article, no portion of the fee associated with the application, notification, or 50
816	818		request for approval shall be refunded. 51 General Assembly Of North Carolina Session 2025
817		-	House Bill 357-~~Second~~ Edition Page 17
	819	+	House Bill 357-First Edition Page 17
818	820		"Part 3. Expansion. 1
819	821		"§ 58-64A-85. Expansion notification. 2
820	822		(a) Prior to marketing and collecting deposits for a proposed expansion of a continuing 3
821	823		care retirement community that is twenty percent (20%) or more of existing independent living 4
822	824		units, a provider shall do both of the following: 5
823	825		(1) Notify and obtain written approval from the Commissioner. 6
824	826		(2) Notify all residents in writing of the provider's intent to expand the number of 7
825	827		independent living units at the continuing care retirement community. This 8
826	828		notification shall include the description required by subdivision (b)(1) of this 9
827	829		section. 10
828	830		(b) The expansion notification to the Commissioner required by this section shall include 11
829	831		all of the following: 12
830	832		(1) A description of the proposed expansion project, including the number of 13
831	833		independent living units to be added. 14
832	834		(2) If the provider intends to enter into nonbinding reservation agreements, 15
833	835		binding reservation agreements, or both, a copy of the proposed agreements 16
834	836		that the provider intends to use. 17
835	837		(3) A proposed escrow agreement that meets the requirements of 18
836	838		G.S. 58-64A-105. 19
837	839		(4) An updated disclosure statement that meets the requirements of 20
838	840		G.S. 58-64A-150. 21
839	841		(c) The Commissioner shall comply with the review schedule in G.S. 58-64A-70 in 22
840	842		response to an expansion notification. 23
841	843		(d) The Commissioner shall approve the expansion notification if all of the following 24
842	844		requirements are met: 25
843	845		(1) The expansion notification complies with this section. 26
844	846		(2) None of the grounds for denial listed in G.S. 58-64A-280 apply to the 27
845	847		provider. 28
846	848		(3) The proposed escrow agreement meets the requirements of G.S. 58-64A-105. 29
847	849		(4) The proposed escrow agent and depository are acceptable in accordance with 30
848	850		G.S. 58-64A-100. 31
849	851		(e) After the Commissioner approves the expansion notification, the provider shall 32
850	852		submit periodic sales and development reports to the Commissioner in a form prescribed by the 33
851	853		Commissioner. 34
852	854		(f) After the Commissioner approves the expansion notification, the provider may do all 35
853	855		of the following: 36
854	856		(1) Disseminate materials, including advertisements, describing the intent to 37
855	857		expand the number of independent living units at the continuing care 38
856	858		retirement community. 39
857	859		(2) Enter into nonbinding reservation agreements, binding reservation 40
858	860		agreements, and continuing care contracts for the proposed independent living 41
859	861		units. 42
860	862		(3) Collect entrance fees and deposits for the proposed independent living units. 43
861	863		All deposits collected shall be placed in escrow and shall only be released in 44
862	864		accordance with Part 4 of this Article, unless otherwise exempted by the 45
863	865		Commissioner. 46
864	866		"§ 58-64A-90. Expansion application. 47
865	867		(a) Prior to commencing construction of an expansion of a continuing care retirement 48
866	868		community that is twenty percent (20%) or more of existing independent living units, a provider 49
867	869		shall do both of the following: 50 General Assembly Of North Carolina Session 2025
868		-	Page 18 House Bill 357-~~Second~~ Edition
	870	+	Page 18 House Bill 357-First Edition
869	871		(1) Receive Commissioner approval of an expansion notification pursuant to 1
870	872		G.S. 58-64A-85. 2
871	873		(2) Apply to the Commissioner for approval to commence construction. 3
872	874		(b) The application required by this section shall include all of the following: 4
873	875		(1) An application fee of one thousand dollars ($1,000). 5
874	876		(2) A feasibility study, prepared by an independent person experienced in 6
875	877		preparing feasibility studies for continuing care retirement communities, with 7
876	878		financial, marketing, and actuarial assumptions that projects the market and 8
877	879		financial viability of the proposed expansion. The study shall include all of 9
878	880		the following items: 10
879	881		a. A description of the applicant's proposed expansion project, including 11
880	882		the number of independent living units being added, fee structure, a 12
881	883		description of how the projected fees were computed, and the 13
882	884		anticipated project time line. 14
883	885		b. A description of the construction plans, construction financing, and 15
884	886		permanent financing for the proposed expansion project, including all 16
885	887		of the following: 17
886	888		1. A description of all debt to be incurred by the applicant, 18
887	889		including the source, anticipated terms, and costs of financing. 19
888	890		2. A description of the source and amount of any equity to be 20
889	891		contributed by the applicant. 21
890	892		3. A description of the source and amount of all other funds, 22
891	893		including entrance fees, that will be necessary to complete and 23
892	894		operate the proposed expansion. 24
893	895		4. A statement itemizing all estimated project costs, including the 25
894	896		real property costs, the cost of designing and constructing the 26
895	897		proposed expansion, and all similar costs that the applicant 27
896	898		expects to incur prior to the opening of the expansion. This 28
897	899		itemization shall identify all costs related to the proposed 29
898	900		expansion, including financing expenses, resident acquisition 30
899	901		costs, marketing costs, and furniture, fixtures, and equipment. 31
900	902		5. An estimate of any reserves required by financing and the 32
901	903		operating reserve required pursuant to Part 11 of this Article. 33
902	904		c. An analysis of the potential market for the proposed expansion, 34
903	905		addressing all of the following: 35
904	906		1. The population, household growth, age distribution, household 36
905	907		income, household tenure, and resale housing values within the 37
906	908		primary market area. 38
907	909		2. A demand analysis of the range of likely target consumers 39
908	910		within the primary market area as well as estimated penetration 40
909	911		rates. 41
910	912		3. An economic analysis of current market conditions and trends 42
911	913		that can impact the feasibility of the proposed expansion, 43
912	914		positively or negatively, including real estate, income, 44
913	915		employment, and the general economic outlook for the primary 45
914	916		market area and surrounding areas. 46
915	917		4. Existing and planned competition in the primary market area. 47
916	918		d. A description of the sales and marketing plan, including all of the 48
917	919		following: 49
918	920		1. Marketing projections, anticipated sales, and cancellation 50
919	921		rates. 51 General Assembly Of North Carolina Session 2025
920		-	House Bill 357-~~Second~~ Edition Page 19
	922	+	House Bill 357-First Edition Page 19
921	923		2. Month-by-month projections of independent living unit sales 1
922	924		through stabilized occupancy. 2
923	925		3. A description of the marketing methods, staffing, and 3
924	926		advertising media to be used by the applicant. 4
925	927		4. An estimate of the total entrance fees to be received. 5
926	928		e. Projected move-in rates and resident profiles, adult care home bed and 6
927	929		nursing bed utilization, and living unit turnover or resale rates. 7
928	930		f. A description or analysis of costs and revenues throughout the 8
929	931		development and resident fill-up period of the proposed expansion. 9
930	932		g. Five-year prospective financial statements of the applicant which shall 10
931	933		be prepared in accordance with standards adopted by the American 11
932	934		Institute of Certified Public Accountants. 12
933	935		h. Any other factors that, in the opinion of the preparer, will affect the 13
934	936		feasibility of the expansion. 14
935	937		i. The name of the person who prepared the feasibility study and their 15
936	938		experience in preparing similar studies or otherwise consulting in the 16
937	939		field of continuing care. 17
938	940		j. An evaluation and opinion by the person who prepared the feasibility 18
939	941		study of the underlying assumptions used as a basis for the study, 19
940	942		including a statement whether the assumptions are reasonable and 20
941	943		proper. 21
942	944		(3) An actuarial study prepared in accordance with accepted actuarial standards 22
943	945		of practice which estimates when the continuing care retirement community 23
944	946		is projected to be in satisfactory actuarial balance once stabilized occupancy 24
945	947		of the expansion is achieved. Applicants who do not collect entrance fees or 25
946	948		some other type of up-front prepayment of costs are exempt from this 26
947	949		requirement and shall only be required to submit an actuarial projection of 27
948	950		future population flows and adult care home bed and nursing bed needs. An 28
949	951		actuarial projection of future population flows and adult home care bed and 29
950	952		nursing bed needs shall use (i) appropriate mortality, morbidity, withdrawal, 30
951	953		occupancy, and other demographic assumptions and (ii) a projection period 31
952	954		that extends to a point at which, in the actuary's professional judgment, the 32
953	955		use of a longer period would not materially affect the results and conclusions. 33
954	956		(4) An updated disclosure statement that meets the requirements of 34
955	957		G.S. 58-64A-150. 35
956	958		(5) If applicable, confirmation that the applicant has secured commitments for 36
957	959		construction financing and long-term financing or that a documented plan 37
958	960		acceptable to the Commissioner has been adopted by the applicant for 38
959	961		long-term financing. 39
960	962		(6) If the expansion includes any land or other real property that is to be leased, 40
961	963		confirmation, if applicable, that the lease has been approved by the 41
962	964		Commissioner pursuant to G.S. 58-64A-25. 42
963	965		(7) Any other data and pertinent information as the Commissioner may 43
964	966		reasonably require with respect to the applicant or the continuing care 44
965	967		retirement community to determine the feasibility of the expansion. 45
966	968		(c) The Commissioner shall comply with the review schedule in G.S. 58-64A-70 in 46
967	969		response to an expansion application. 47
968	970		(d) The Commissioner shall approve the expansion application if all of the following 48
969	971		requirements are met: 49
970	972		(1) The expansion application complies with this section. 50 General Assembly Of North Carolina Session 2025
971		-	Page 20 House Bill 357-~~Second~~ Edition
	973	+	Page 20 House Bill 357-First Edition
972	974		(2) None of the grounds for denial listed in G.S. 58-64A-280 apply to the 1
973	975		applicant. 2
974	976		(3) The feasibility study meets all of the following requirements: 3
975	977		a. Includes in the prospective financial statements all current obligations 4
976	978		and liabilities of the applicant as well as those to be undertaken by the 5
977	979		applicant. 6
978	980		b. Demonstrates that the expansion is financially viable and will not have 7
979	981		an unreasonably adverse effect on the financial ability of the applicant 8
980	982		to furnish continuing care. 9
981	983		c. Demonstrates the existence of a market for the proposed expansion 10
982	984		based on reliable data, which meets all of the following requirements: 11
983	985		1. Is specific to the continuing care retirement community. 12
984	986		2. Considers existing and proposed competition in the primary 13
985	987		market area. 14
986	988		3. Demonstrates that the rate of penetration in the proposed 15
987	989		market area is within acceptable industry ranges. 16
988	990		(4) The applicant demonstrates the ability to provide continuing care and meet all 17
989	991		financial and contractual obligations related to its operations, including the 18
990	992		financial requirements of this Article. 19
991	993		(5) The applicant, if applicable, has secured commitments for construction 20
992	994		financing and long-term financing or that a documented plan acceptable to the 21
993	995		Commissioner has been adopted by the applicant for long-term financing. 22
994	996		(6) The actuarial study, if applicable, projects that the continuing care retirement 23
995	997		community will be in satisfactory actuarial balance within a reasonable period 24
996	998		of time once stabilized occupancy of the expansion is achieved, or if no 25
997	999		actuarial study is required, the actuarial projection of future population flows 26
998	1000		demonstrates a sufficient number of adult care home beds and nursing beds to 27
999	1001		meet the needs of residents and the contractual obligations of the applicant. 28
1000	1002		(e) After the Commissioner approves the expansion application, the provider shall submit 29
1001	1003		periodic sales and development reports to the Commissioner in a form prescribed by the 30
1002	1004		Commissioner to monitor the expansion project. 31
1003	1005		(f) After the Commissioner approves the expansion application, the provider may 32
1004	1006		commence construction of the new independent living units at the continuing care retirement 33
1005	1007		community as proposed and, upon completion of construction and the satisfaction of all other 34
1006	1008		legal requirements, open the expansion and provide continuing care to the residents of the new 35
1007	1009		independent living units. 36
1008	1010		"§ 58-64A-95. Expansion entrance fees and deposits. 37
1009	1011		All entrance fees and deposits collected for independent living units in an expansion requiring 38
1010	1012		Commissioner approval under this Part shall be placed in an escrow account in accordance with 39
1011	1013		Part 4 of this Article unless otherwise exempted by the Commissioner. 40
1012	1014		"Part 4. Escrow Account. 41
1013	1015		"§ 58-64A-100. Escrow account required. 42
1014	1016		All entrance fees and deposits, when required by this Article, shall be deposited by the 43
1015	1017		provider in an escrow account and shall be maintained in a segregated account without any 44
1016	1018		commingling with other funds, including any funds or accounts owned by the provider. The 45
1017	1019		escrow agent and all terms governing an escrow account shall be approved in advance by the 46
1018	1020		Commissioner. 47
1019	1021		"§ 58-64A-105. Escrow agreement requirements. 48
1020	1022		The escrow agreement between an applicant or a provider and the escrow agent shall be in 49
1021	1023		writing and include, in addition to any other provisions required by law, all of the following: 50 General Assembly Of North Carolina Session 2025
1022		-	House Bill 357-~~Second~~ Edition Page 21
	1024	+	House Bill 357-First Edition Page 21
1023	1025		(1) A provision requiring that all funds received shall be placed into the escrow 1
1024	1026		account in accordance with G.S. 58-64A-115. 2
1025	1027		(2) A provision for investment of escrow account funds in a manner consistent 3
1026	1028		with G.S. 58-64A-120. 4
1027	1029		(3) A provision regarding the payment of interest earned on the funds held in the 5
1028	1030		escrow account in the manner specified in G.S. 58-64A-125. 6
1029	1031		(4) A provision for refunds to depositors in the manner specified by 7
1030	1032		G.S. 58-64A-135. 8
1031	1033		(5) A provision that any refund or release of escrow account funds be performed 9
1032	1034		in the manner specified in G.S. 58-64A-135 and G.S. 58-64A-140, including 10
1033	1035		a statement as to whom payment of interest earned on the funds will be made. 11
1034	1036		(6) A statement that the purpose of the escrow agreement is to protect residents 12
1035	1037		and prospective residents. 13
1036	1038		(7) The amount of the escrow agent fee. 14
1037	1039		(8) A provision that funds deposited shall not be subject to any liens or charges 15
1038	1040		by the escrow agent. 16
1039	1041		(9) A provision requiring the escrow agent to furnish the provider with a monthly 17
1040	1042		statement indicating the amount of any disbursements from or deposits to the 18
1041	1043		escrow account and the condition of the account during the monthly period 19
1042	1044		covered by the statement. 20
1043	1045		(10) A provision requiring the escrow agent to furnish to the Commissioner, upon 21
1044	1046		the request of the Commissioner, periodic reports, including the monthly 22
1045	1047		statement required pursuant to subdivision (9) of this section, certifying the 23
1046	1048		amount of funds held on deposit. 24
1047	1049		(11) A provision requiring the escrow agent to furnish to a depositor, upon the 25
1048	1050		request of a depositor, a statement indicating the depositor's portion of the 26
1049	1051		escrow account. 27
1050	1052		(12) Representations by the escrow agent that it is not and shall not be during the 28
1051	1053		term of the escrow agreement, a related party of the provider, a lender to the 29
1052	1054		provider, or a fiduciary for any lender or bondholder for the provider, unless 30
1053	1055		approved by the Commissioner. 31
1054	1056		"§ 58-64A-110. Changes to escrow agreement. 32
1055	1057		All changes to an escrow agreement shall be submitted to, and approved by, the 33
1056	1058		Commissioner before use by a provider. 34
1057	1059		"§ 58-64A-115. Entrance fee and deposit delivery to the escrow agent. 35
1058	1060		(a) The provider shall deliver to the escrow agent any entrance fees or deposits required 36
1059	1061		to be maintained in an escrow account pursuant to this Article within 10 business days after 37
1060	1062		receipt by the provider. 38
1061	1063		(b) Any deposit delivery to an escrow agent pursuant to this Article shall be accompanied 39
1062	1064		with a copy of the executed nonbinding reservation agreement, binding reservation agreement, 40
1063	1065		or continuing care contract, a copy of the receipt given to the depositor, a summary of all deposits 41
1064	1066		made on that date, and any other materials required by the escrow agent. 42
1065	1067		"§ 58-64A-120. Investment of funds in escrow. 43
1066	1068		(a) All entrance fees and deposits subject to an escrow agreement under this Article shall 44
1067	1069		be maintained by the escrow agent in one of the following manners: 45
1068	1070		(1) Investment in an interest-bearing account. 46
1069	1071		(2) Investment in instruments guaranteed by the federal government or an agency 47
1070	1072		of the federal government. 48
1071	1073		(3) Investment in investment funds secured by federally guaranteed instruments. 49
1072	1074		(b) Any investment shall not diminish the funds held in escrow below the amounts 50
1073	1075		required by this Article. 51 General Assembly Of North Carolina Session 2025
1074		-	Page 22 House Bill 357-~~Second~~ Edition
	1076	+	Page 22 House Bill 357-First Edition
1075	1077		"§ 58-64A-125. Earnings from funds in escrow. 1
1076	1078		(a) Interest, income, and other gains derived from funds held in an escrow account shall 2
1077	1079		not be released or distributed from the escrow account except upon written approval of the 3
1078	1080		Commissioner. 4
1079	1081		(b) Approval by the Commissioner for the release of earnings generated from funds held 5
1080	1082		in escrow shall be based upon an assessment that funds remaining in the escrow account meet 6
1081	1083		the requirements of this Article and, if applicable, will be sufficient to pay refunds and any 7
1082	1084		interest promised to all depositors. 8
1083	1085		(c) When release of earnings is approved by the Commissioner, interest earned by the 9
1084	1086		funds in the escrow account shall be distributed to the provider or depositors in accordance with 10
1085	1087		the terms of the continuing care contract, binding reservation agreement, or nonbinding 11
1086	1088		reservation agreement. 12
1087	1089		"§ 58-64A-130. Escrowed funds not to be used as collateral. 13
1088	1090		No funds held in an escrow account shall be encumbered or used as collateral for any 14
1089	1091		obligation of the provider, or any other person, unless the provider obtains prior written approval 15
1090	1092		from the Commissioner for the encumbrance or use as collateral. The Commissioner shall not 16
1091	1093		approve any encumbrance or use as collateral under this section unless the encumbrance or use 17
1092	1094		as collateral is expressly subordinated to the rights of depositors under this Article to refunds of 18
1093	1095		their entrance fees or deposits. 19
1094	1096		"§ 58-64A-135. Refunds of escrowed entrance fees and deposits. 20
1095	1097		(a) An escrow agent shall refund to a depositor, or their legal representative, all amounts 21
1096	1098		required by the depositor's nonbinding reservation agreement, binding reservation agreement, or 22
1097	1099		continuing care contract upon receiving written notice from the provider of any of the following: 23
1098	1100		(1) The death of a depositor. 24
1099	1101		(2) Nonacceptance by the provider. 25
1100	1102		(3) Voluntary cancellation. 26
1101	1103		(4) The denial of an application pursuant to this Article. 27
1102	1104		(5) Written notice from the Commissioner. 28
1103	1105		(b) Refunds required in subsection (a) of this section shall be paid within 10 business 29
1104	1106		days after the escrow agent receives the written notice described in subsection (a) of this section. 30
1105	1107		(c) If voluntary cancellation of a continuing care contract or a binding reservation 31
1106	1108		agreement occurs after construction of the continuing care retirement community or expansion 32
1107	1109		of a continuing care retirement community has begun, but prior to the independent living unit's 33
1108	1110		initial occupancy, the refund may be delayed until another depositor has reserved a similar 34
1109	1111		independent living unit and paid the necessary entrance fee or deposit. This delay shall not exceed 35
1110	1112		one year, unless the time period is extended by the Commissioner upon a showing of good cause 36
1111	1113		by the provider. 37
1112	1114		"§ 58-64A-140. Release of escrowed entrance fees and deposits. 38
1113	1115		(a) To request a release of the first twenty-five percent (25%) of each escrowed entrance 39
1114	1116		fee and deposit, a provider shall petition in writing to the Commissioner and certify all of the 40
1115	1117		following: 41
1116	1118		(1) The provider has presold at least fifty percent (50%) of the proposed 42
1117	1119		independent living units, having received a minimum ten percent (10%) 43
1118	1120		deposit of the total of each applicable entrance fee and placed it in escrow. 44
1119	1121		Any independent living unit for which a refund is pending shall not be counted 45
1120	1122		toward the fifty percent (50%) requirement. 46
1121	1123		(2) The provider has long-term financing in place for the proposed continuing 47
1122	1124		care retirement community or expansion, or if the provider is leasing the land 48
1123	1125		or other real property of the continuing care retirement community, 49
1124	1126		certification that the lease is in place and, if applicable, that the lease has been 50
1125	1127		approved by the Commissioner pursuant to G.S. 58-64A-25. 51 General Assembly Of North Carolina Session 2025
1126		-	House Bill 357-~~Second~~ Edition Page 23
	1128	+	House Bill 357-First Edition Page 23
1127	1129		(3) For a proposed continuing care retirement community, the aggregate entrance 1
1128	1130		fees received or receivable by the provider pursuant to binding reservation 2
1129	1131		agreements and continuing care contracts, plus the anticipated proceeds of any 3
1130	1132		first mortgage loan or other long-term financing commitment, plus any equity 4
1131	1133		being contributed by the provider or a related party, are equal to not less than 5
1132	1134		ninety percent (90%) of the following amount: (i) the aggregate cost of 6
1133	1135		constructing or purchasing, equipping, and furnishing the proposed continuing 7
1134	1136		care retirement community, plus (ii) not less than ninety percent (90%) of the 8
1135	1137		funds estimated to be necessary to fund start-up losses and to reasonably 9
1136	1138		assure full performance of the provider's future continuing care obligations, 10
1137	1139		as reported in the statement of cash flows required by 11
1138	1140		G.S. 58-64A-150(a)(37). 12
1139	1141		(b) To request a release of the remaining seventy-five percent (75%) of escrowed 13
1140	1142		entrance fees and deposits, a provider shall petition in writing to the Commissioner and certify 14
1141	1143		all of the following: 15
1142	1144		(1) The provider has presold at least seventy percent (70%) of the proposed 16
1143	1145		independent living units, having received a minimum ten percent (10%) 17
1144	1146		deposit of each applicable entrance fee and maintains at least seventy-five 18
1145	1147		percent (75%) of each entrance fee or deposit received in escrow, or has 19
1146	1148		maintained an independent living unit occupancy minimum of seventy percent 20
1147	1149		(70%) for at least 60 days. Any independent living unit for which a refund is 21
1148	1150		pending shall not be counted toward the seventy percent (70%) requirement. 22
1149	1151		(2) Construction or purchase of the independent living units has been completed 23
1150	1152		and an occupancy permit, if applicable, has been issued by the local 24
1151	1153		government having authority to issue those permits. 25
1152	1154		(3) The independent living units are available for occupancy by the new residents. 26
1153	1155		(c) The Commissioner shall instruct the escrow agent in writing to release to the provider 27
1154	1156		entrance fees and deposits in the escrow account only when the Commissioner has confirmed the 28
1155	1157		information provided by the provider pursuant to subsection (a) or subsection (b) of this section. 29
1156	1158		(d) The escrow agent shall release the entrance fees and deposits held in the escrow 30
1157	1159		account to the provider only when the Commissioner has instructed it to do so in writing. 31
1158	1160		(e) When a provider discloses in an application that construction will be completed and 32
1159	1161		commence operating in different phases, the Commissioner shall apply the requirements in 33
1160	1162		subsections (a) and (b) of this section to any one or group of phases requested by the provider, 34
1161	1163		provided the provider demonstrates in the prospective financial statements filed with the 35
1162	1164		application that the phase or group of phases is financially viable without the need for any 36
1163	1165		additional phases. 37
1164	1166		(f) For the purposes of this section, a refund is pending if a depositor has canceled a 38
1165	1167		continuing care contract or a binding reservation agreement but has not yet received a refund, 39
1166	1168		either because of timing or because another depositor has not reserved a similar independent 40
1167	1169		living unit and paid the necessary entrance fee or deposit in order to trigger a refund to the 41
1168	1170		canceling depositor. 42
1169	1171		"Part 5. Disclosure Statement. 43
1170	1172		"§ 58-64A-145. Definitions. 44
1171	1173		The following definitions apply to this Part: 45
1172	1174		(1) Adjusted net operating margin ratio. – A profitability ratio that measures the 46
1173	1175		margin generated from the core operations of a provider and net cash proceeds 47
1174	1176		from entrance fees. The quotient shall be calculated by dividing the sum of 48
1175	1177		resident operating income and net proceeds from entrance fees by the sum of 49
1176	1178		resident revenue and net cash proceeds from entrance fees. 50 General Assembly Of North Carolina Session 2025
1177		-	Page 24 House Bill 357-~~Second~~ Edition
	1179	+	Page 24 House Bill 357-First Edition
1178	1180		(2) Average daily cash operating expenses. – The total expenses of a provider 1
1179	1181		incurred in the conduct of the provider's business over a defined period of 2
1180	1182		time, divided by the number of days in that period. For purposes of this 3
1181	1183		definition, "total expenses" includes interest expense, but excludes 4
1182	1184		depreciation expense, amortization expense, realized or unrealized 5
1183	1185		nonoperating losses or expenses, bad debt expense, and other noncash 6
1184	1186		expenses. 7
1185	1187		(3) Capital expenditures as a percentage of depreciation ratio. – A capital 8
1186	1188		structure ratio that indicates the level of capital reinvestment by a provider. 9
1187	1189		The quotient shall be computed by dividing total purchases of property, plant, 10
1188	1190		and equipment by total depreciation expense. 11
1189	1191		(4) Cushion ratio. – A liquidity ratio that measures a provider's ability to pay its 12
1190	1192		annual debt service using its unrestricted cash and investments. The quotient 13
1191	1193		shall be computed by dividing unrestricted cash and investments by annual 14
1192	1194		debt service. 15
1193	1195		(5) Days cash on hand ratio. – A liquidity ratio that measures the number of days 16
1194	1196		of cash operating expenses a provider could cover using its existing 17
1195	1197		unrestricted cash and investments. The quotient shall be computed by dividing 18
1196	1198		unrestricted cash and investments by average daily cash operating expenses. 19
1197	1199		(6) Multi-entity organization. – A collection of distinct legal entities that are 20
1198	1200		under common control. 21
1199	1201		(7) Net operating margin ratio. – A profitability ratio that measures the margin 22
1200	1202		generated from the core operations of a provider. The quotient shall be 23
1201	1203		calculated by dividing resident operating income by resident revenue. 24
1202	1204		(8) Operating ratio. – A profitability ratio that measures whether current year cash 25
1203	1205		operating revenues are sufficient to cover current year cash operating 26
1204	1206		expenses without the inclusion of cash from entrance fee receipts. The 27
1205	1207		quotient shall be computed by dividing total operating expenses, excluding 28
1206	1208		depreciation expense and amortization expense, by total operating revenues, 29
1207	1209		excluding amortization of entrance fees and other deferred revenue. 30
1208	1210		(9) Resale fee. – A contractual assessment by the provider against the proceeds 31
1209	1211		from the sale of an independent living unit. 32
1210	1212		(10) Resident expense. – Total operating expenses excluding interest expense, 33
1211	1213		depreciation expense, amortization expense, and income taxes. 34
1212	1214		(11) Resident revenue. – Total operating revenue excluding interest and dividend 35
1213	1215		income, entrance fee amortization, and contributions. 36
1214	1216		(12) Unrestricted cash and investments. – The sum of the provider's unrestricted 37
1215	1217		cash, cash equivalents and investments, and any provider restricted funds that 38
1216	1218		are available to pay debt or to pay operating expenses. For purposes of this 39
1217	1219		definition, the assets serving as the operating reserve required by 40
1218	1220		G.S. 58-64A-245 shall be considered unrestricted. 41
1219	1221		(13) Unrestricted cash and investments to long-term debt ratio. – A capital 42
1220	1222		structure ratio that (i) measures a provider's position in available cash and 43
1221	1223		marketable securities in relation to its long-term debt and (ii) measures a 44
1222	1224		provider's ability to withstand annual fluctuations in cash. The quotient shall 45
1223	1225		be calculated by dividing unrestricted cash and investments by total long-term 46
1224	1226		debt, less the current portion of long-term debt. 47
1225	1227		"§ 58-64A-150. Disclosure statement. 48
1226	1228		(a) A provider shall prepare a disclosure statement for each continuing care retirement 49
1227	1229		community operated or to be operated in this State that includes all of the following information: 50 General Assembly Of North Carolina Session 2025
1228		-	House Bill 357-~~Second~~ Edition Page 25
	1230	+	House Bill 357-First Edition Page 25
1229	1231		(1) The name, business address, and telephone number of the provider and a 1
1230	1232		statement of whether the provider is a partnership, corporation, or other type 2
1231	1233		of legal entity. 3
1232	1234		(2) A statement disclosing whether the provider is for-profit or nonprofit, and if 4
1233	1235		nonprofit, the provision of the federal Internal Revenue Code under which the 5
1234	1236		provider is exempt from the payment of income tax, and a statement disclosing 6
1235	1237		whether the provider is current on all tax filings. 7
1236	1238		(3) A statement disclosing whether the provider is privately owned or publicly 8
1237	1239		owned. 9
1238	1240		(4) A statement disclosing whether the provider is part of a multi-entity 10
1239	1241		organization, and if so, both of the following: 11
1240	1242		a. A statement indicating whether the audited financial statements 12
1241	1243		required by subdivision (36) of this subsection are prepared on a 13
1242	1244		consolidated basis with all entities included and, if not, a statement 14
1243	1245		indicating how the audited financial statements are prepared. 15
1244	1246		b. A company structure chart showing the provider's relationship with the 16
1245	1247		other entities in the multi-entity organization. 17
1246	1248		(5) A statement identifying the controlling person of the provider, if control does 18
1247	1249		not exist with the provider, including the controlling person's business 19
1248	1250		address. 20
1249	1251		(6) The name, business address, education, work experience, and length of service 21
1250	1252		with the provider or the provider's controlling person of (i) all officers, 22
1251	1253		directors, trustees, managers, managing or general partners of the provider 23
1252	1254		and, if applicable, the provider's controlling person, and any person having a 24
1253	1255		ten percent (10%) or greater equity or beneficial interest in the provider or the 25
1254	1256		provider's controlling person and (ii) any person who will be managing the 26
1255	1257		continuing care retirement community on a day-to-day basis, and a description 27
1256	1258		of the person's interest in or occupation with the provider or controlling 28
1257	1259		person. If any person required to be named pursuant to this subdivision does 29
1258	1260		not have a business address or uses this person's home address as the person's 30
1259	1261		business address, the provider shall list the address of the provider as the 31
1260	1262		person's business address. A provider shall not disclose the personal address 32
1261	1263		of any person required to be named pursuant to this subdivision, unless 33
1262	1264		required to do so by another provision of law or a court order. 34
1263	1265		(7) The following information on all persons named in response to subdivisions 35
1264	1266		(1), (5), and (6) of this subsection: 36
1265	1267		a. A description of the person's business experience, if any, in the 37
1266	1268		operation or management of a continuing care retirement community. 38
1267	1269		b. The name and address of any professional service firm, association, 39
1268	1270		trust, partnership, or corporation in which this person has, or which 40
1269	1271		has in this person, a ten percent (10%) or greater interest and which it 41
1270	1272		is presently intended shall currently or in the future provide goods, 42
1271	1273		leases, or services to the provider of an aggregate value of five 43
1272	1274		thousand dollars ($5,000) or more within any fiscal year, including a 44
1273	1275		description of the goods, leases, or services and the actual or probable 45
1274	1276		cost to the provider, or a statement that this cost cannot presently be 46
1275	1277		estimated and the reason why it cannot be presently estimated. 47
1276	1278		c. A description of any matter in which the person (i) has been convicted 48
1277	1279		of any felony or pleaded nolo contendere to a felony charge, (ii) has 49
1278	1280		been held liable or enjoined in a civil action by final judgment 50
1279	1281		involving fraud, embezzlement, fraudulent conversion, or 51 General Assembly Of North Carolina Session 2025
1280		-	Page 26 House Bill 357-~~Second~~ Edition
	1282	+	Page 26 House Bill 357-First Edition
1281	1283		misappropriation of property, or (iii) is subject to a currently effective 1
1282	1284		injunctive or restrictive court order, or within the past five years, had 2
1283	1285		any state or federal license or permit suspended or revoked as a result 3
1284	1286		of an action brought by a governmental agency or department. 4
1285	1287		(8) A brief summary of the role and responsibilities of the board of directors or 5
1286	1288		other governing body of the provider and, if applicable, the provider's 6
1287	1289		controlling person, including how the members of the board of directors or 7
1288	1290		other governing body are selected and their responsibilities. 8
1289	1291		(9) A statement disclosing whether any related party provides, or will provide in 9
1290	1292		the case of a continuing care retirement community under development, 10
1291	1293		goods, leases, or services to the provider of an aggregate value of five 11
1292	1294		thousand dollars ($5,000) or more within any fiscal year, not already disclosed 12
1293	1295		pursuant to subdivision (7) or (15) of this subsection, and a description of the 13
1294	1296		goods, leases, or services and the actual or probable cost to the provider, or a 14
1295	1297		statement that this cost cannot presently be estimated and the reason why it 15
1296	1298		cannot be presently estimated. 16
1297	1299		(10) A statement indicating whether the provider has a relationship with any 17
1298	1300		religious, charitable, or other organization or person, along with the nature and 18
1299	1301		extent of that relationship. 19
1300	1302		(11) The name of any other person who will be responsible for the financial and 20
1301	1303		contractual obligations of the provider not already disclosed and the extent of 21
1302	1304		their responsibility. 22
1303	1305		(12) A statement as to whether the provider is, or will be, a part of an obligated 23
1304	1306		group and, if so, the names of the other persons in, or to be in, the obligated 24
1305	1307		group. 25
1306	1308		(13) A statement as to whether the provider, or any obligated group that the 26
1307	1309		provider is a part of, is not in compliance with any covenant contained in any 27
1308	1310		debt agreement and, if not in compliance, specifying each failure to comply 28
1309	1311		and the steps being taken to cure the noncompliance. 29
1310	1312		(14) A statement indicating whether the provider currently employs or will employ 30
1311	1313		a third-party manager for the continuing care retirement community and, if so, 31
1312	1314		the name of the third-party manager employed and their experience in 32
1313	1315		providing management services within the continuing care retirement 33
1314	1316		community industry. 34
1315	1317		(15) If the provider is leasing or intends to lease from another person any part of 35
1316	1318		the real property of the continuing care retirement community, a statement 36
1317	1319		disclosing the parties to the lease, the original lease term, and the remaining 37
1318	1320		term of the lease. 38
1319	1321		(16) A statement as to whether the provider has endowment funds or has 39
1320	1322		endowment funds available through a related party, that are available to 40
1321	1323		provide financial aid to residents, including a description of the funds and any 41
1322	1324		restrictions on their use. 42
1323	1325		(17) The name, address, and description of the physical property or properties of 43
1324	1326		the continuing care retirement community, existing or proposed, and to the 44
1325	1327		extent proposed, the estimated completion date or dates, whether construction 45
1326	1328		has begun, and the contingencies subject to which construction may be 46
1327	1329		deferred. 47
1328	1330		(18) The number of existing living units, or the number of living units to be 48
1329	1331		constructed, at the continuing care retirement community. 49 General Assembly Of North Carolina Session 2025
1330		-	House Bill 357-~~Second~~ Edition Page 27
	1332	+	House Bill 357-First Edition Page 27
1331	1333		(19) If the provider is licensed to provide continuing care at home, a description of 1
1332	1334		the continuing care at home program, including the primary market area 2
1333	1335		served. 3
1334	1336		(20) The number or estimated number of residents of the continuing care retirement 4
1335	1337		community to be provided services by the provider pursuant to a continuing 5
1336	1338		care or continuing care at home contract. 6
1337	1339		(21) The 12-month daily average occupancy rate at the continuing care retirement 7
1338	1340		community, by living unit type, as of the provider's fiscal year-end for the past 8
1339	1341		five years or for each year of the continuing care retirement community's 9
1340	1342		operation if it has been in operation for less than five years. 10
1341	1343		(22) A statement indicating whether the provider held the semiannual meetings 11
1342	1344		required by G.S. 58-64A-360 during the previous fiscal year, including the 12
1343	1345		dates held. 13
1344	1346		(23) A description of any property rights of residents in the real property of the 14
1345	1347		continuing care retirement community. 15
1346	1348		(24) The services provided or proposed to be provided pursuant to continuing care 16
1347	1349		and continuing care at home contracts, including the extent to which health 17
1348	1350		care is furnished, and a clear statement of which services are included for 18
1349	1351		specified periodic fees and which services are or will be made available for an 19
1350	1352		extra charge. The description shall include a statement describing what health 20
1351	1353		care services are or will be provided by the provider directly and what health 21
1352	1354		care services are or will be provided through a contract with a third party. 22
1353	1355		(25) A description of all nonancillary fees required of residents, including entrance 23
1354	1356		fees, periodic fees, transfer fees, and resale fees, if any. The description shall 24
1355	1357		include all of the following: 25
1356	1358		a. A statement of the fees that will be charged if a resident marries or 26
1357	1359		otherwise increases the number of persons residing in the resident's 27
1358	1360		living unit while a resident of the continuing care retirement 28
1359	1361		community, and a statement of the terms concerning the entry of a 29
1360	1362		spouse or other person to the continuing care retirement community 30
1361	1363		and the consequences if the spouse or other person does not meet the 31
1362	1364		requirements for entry. 32
1363	1365		b. The manner by which the provider may adjust periodic fees and the 33
1364	1366		limitations on the adjustments, if any; and, if the continuing care 34
1365	1367		retirement community is already in operation, a table showing the 35
1366	1368		frequency, average percent increase, and average dollar amount of 36
1367	1369		each increase in periodic fees for the previous five years, or for each 37
1368	1370		year of the continuing care retirement community's and, if applicable, 38
1369	1371		continuing care at home program's operation if it has been in operation 39
1370	1372		for less than five years. If the continuing care retirement community is 40
1371	1373		not yet in operation, the provider shall include a table showing the 41
1372	1374		expected frequency, average percent increase, and average dollar 42
1373	1375		amount of each increase in periodic fees utilized in the five-year 43
1374	1376		prospective financial statements required pursuant to subdivision (37) 44
1375	1377		of this subsection. 45
1376	1378		c. A table showing the current entrance fee charges as well as the 46
1377	1379		frequency, average percent increase, and average dollar amount of 47
1378	1380		each increase in entrance fees for the previous five years, or for each 48
1379	1381		year of the continuing care retirement community and, if applicable, 49
1380	1382		continuing care at home program's operation if it has been in operation 50
1381	1383		for less than five years. If the continuing care retirement community is 51 General Assembly Of North Carolina Session 2025
1382		-	Page 28 House Bill 357-~~Second~~ Edition
	1384	+	Page 28 House Bill 357-First Edition
1383	1385		not yet in operation, the provider shall include a table showing the 1
1384	1386		expected frequency, average percent increase, and average dollar 2
1385	1387		amount of each increase in entrance fees utilized in the five-year 3
1386	1388		prospective financial statements required pursuant to subdivision (37) 4
1387	1389		of this subsection. 5
1388	1390		(26) For providers who offer refundable entrance fee continuing care or continuing 6
1389	1391		care at home contracts, a statement disclosing: 7
1390	1392		a. The conditions that must be met before all or any portion of an 8
1391	1393		entrance fee will be refunded. 9
1392	1394		b. The number and aggregate dollar amount of refundable entrance fee 10
1393	1395		refunds that, as of the provider's most recent fiscal year-end: 11
1394	1396		1. Will be due once all contractual conditions are met. 12
1395	1397		2. Are currently due, including a disclosure of the number and 13
1396	1398		aggregate dollar amount of refunds that are 30 or more days 14
1397	1399		past due. 15
1398	1400		3. Will be due, once all conditions are met, to residents who have 16
1399	1401		permanently vacated their independent living unit and now 17
1400	1402		reside in a non-independent living unit provided by the 18
1401	1403		provider. 19
1402	1404		4. Will be due to residents who have permanently vacated their 20
1403	1405		independent living unit and now reside in a non-independent 21
1404	1406		living unit provided by the provider whose former independent 22
1405	1407		living unit has already been resold. 23
1406	1408		(27) The circumstances under which a resident will be permitted to remain a 24
1407	1409		resident at the continuing care retirement community in the event of possible 25
1408	1410		financial difficulties of the resident. 26
1409	1411		(28) The terms and conditions under which a continuing care and continuing care 27
1410	1412		at home contract may be canceled by the provider, or by the resident, and the 28
1411	1413		conditions, if any, under which all or any portion of the entrance fee or any 29
1412	1414		other fee will be refunded in the event of cancellation of the continuing care 30
1413	1415		or continuing care at home contract by the provider, or by the resident, or in 31
1414	1416		the event of the death of the resident, prior to, or following, occupancy of a 32
1415	1417		living unit or the start of services not already disclosed in subdivision (26) of 33
1416	1418		this subsection. 34
1417	1419		(29) The conditions under which a living unit occupied by a resident may be made 35
1418	1420		available by the provider to a different or new resident other than on the death 36
1419	1421		of the prior resident. 37
1420	1422		(30) The conditions or circumstances under which a provider may require a 38
1421	1423		resident to move from the resident's living unit to another living unit for the 39
1422	1424		safety of the resident or for the good of the provider. 40
1423	1425		(31) The health and financial condition required for an individual to be accepted as 41
1424	1426		a resident and to continue as a resident once accepted, including the effect of 42
1425	1427		any change in the health or financial condition of a person between the date 43
1426	1428		of entering into a continuing care or continuing care at home contract and the 44
1427	1429		date of initial occupancy of a living unit or the start of services. 45
1428	1430		(32) Any age and insurance requirements for admission. 46
1429	1431		(33) The provisions that have been made or will be made, including the 47
1430	1432		requirements of G.S. 58-64A-100 and G.S. 58-64A-245, to provide reserve 48
1431	1433		funding or security to enable the provider to refund entrance fees and deposits 49
1432	1434		when due and to fulfill all of its other obligations under binding reservation 50
1433	1435		agreements, continuing care contracts, and continuing care at home contracts, 51 General Assembly Of North Carolina Session 2025
1434		-	House Bill 357-~~Second~~ Edition Page 29
	1436	+	House Bill 357-First Edition Page 29
1435	1437		including the establishment of escrow accounts, trusts, or reserve funds, 1
1436	1438		together with the manner in which these funds will be invested, and the names 2
1437	1439		and experience of any person or persons who will make the investment 3
1438	1440		decisions. The information provided shall also include a schedule detailing 4
1439	1441		how the operating reserve for the continuing care retirement community has 5
1440	1442		been calculated which shall agree with the amount calculated and reported to 6
1441	1443		the Commissioner pursuant to G.S. 58-64A-270. 7
1442	1444		(34) A description of any expansion, renovation, or planned expansion or 8
1443	1445		renovation of the continuing care retirement community. 9
1444	1446		(35) An explanation if the provider's most recent audited financial statements were 10
1445	1447		not prepared within 150 days or if an audit opinion was received other than an 11
1446	1448		unqualified opinion. 12
1447	1449		(36) Audited financial statements meeting the requirements of G.S. 58-64A-200. 13
1448	1450		(37) Five-year prospective financial statements of the provider that are either 14
1449	1451		compiled or examined by an independent certified public accountant, that can 15
1450	1452		be prepared on a stand-alone basis, or consolidated or combined with the same 16
1451	1453		persons as the annual audited financial statements filed with the 17
1452	1454		Commissioner pursuant to G.S. 58-64A-200, and that meet all of the 18
1453	1455		following requirements: 19
1454	1456		a. Include a summary of significant assumptions and a summary of 20
1455	1457		significant accounting policies. 21
1456	1458		b. Include, if financial projections, an identification of the hypothetical 22
1457	1459		assumptions and a description of the limitations on the usefulness of 23
1458	1460		the presentation. 24
1459	1461		c. Include as supplemental information, if prepared on a consolidated or 25
1460	1462		combined basis, a consolidating or combining: 26
1461	1463		1. Balance sheet. 27
1462	1464		2. Statement of operations and changes in net assets or equity. 28
1463	1465		3. Statement of cash flows. 29
1464	1466		d. Include a statement of operations as supplemental information for each 30
1465	1467		continuing care retirement community operated under this Article if 31
1466	1468		the provider operates more than one continuing care retirement 32
1467	1469		community or has operations that are separate and distinct from the 33
1468	1470		operation of a continuing care retirement community operating under 34
1469	1471		this Article. 35
1470	1472		e. Contain the same line items and categories as the annual audited 36
1471	1473		financial statements filed with the Commissioner pursuant to 37
1472	1474		G.S. 58-64A-195. 38
1473	1475		f. For continuing care retirement communities that are under 39
1474	1476		development, the prospective financial statements required by this 40
1475	1477		subdivision shall include narrative disclosure detailing all significant 41
1476	1478		assumptions used in the preparation of the prospective financial 42
1477	1479		statements, including all of the following: 43
1478	1480		1. Details of any long-term financing for the purchase or 44
1479	1481		construction of the continuing care retirement community, 45
1480	1482		including interest rate, repayment terms, loan covenants, and 46
1481	1483		assets pledged. 47
1482	1484		2. Details of any leasing agreements where the provider is leasing 48
1483	1485		from another person any part of the real property of the 49
1484	1486		continuing care retirement community, including the length of 50
1485	1487		the lease and the remaining term. 51 General Assembly Of North Carolina Session 2025
1486		-	Page 30 House Bill 357-~~Second~~ Edition
	1488	+	Page 30 House Bill 357-First Edition
1487	1489		3. Details of any other funding sources that the provider 1
1488	1490		anticipates using to fund any start-up losses or to provide 2
1489	1491		reserve funds to assure full performance of the obligations of 3
1490	1492		the provider under continuing care contracts. 4
1491	1493		4. The total entrance fees to be received from or on behalf of, 5
1492	1494		residents at, or prior to, commencement of operations along 6
1493	1495		with anticipated accounting methods used in the recognition of 7
1494	1496		revenues from and expected refunds of entrance fees. 8
1495	1497		5. A description of any equity capital to be received by the 9
1496	1498		provider. 10
1497	1499		6. The cost of the acquisition of the continuing care retirement 11
1498	1500		community or, if the continuing care retirement community is 12
1499	1501		to be constructed, the estimated construction cost and cost to 13
1500	1502		acquire the land. 14
1501	1503		7. Related costs, including financing and development costs, that 15
1502	1504		the provider expects to incur or become obligated for prior to 16
1503	1505		the commencement of operations. 17
1504	1506		8. The marketing and resident acquisition costs to be incurred 18
1505	1507		prior to commencement of operations. 19
1506	1508		9. A description of the assumptions used for calculating the 20
1507	1509		estimated occupancy rate of the continuing care retirement 21
1508	1510		community and the effect on the income of the provider of 22
1509	1511		government subsidies for health care services. 23
1510	1512		(38) A narrative describing the reasons for any material differences between (i) the 24
1511	1513		five-year prospective financial statements included as a part of the disclosure 25
1512	1514		statement recorded most immediately subsequent to the start of the provider's 26
1513	1515		most recently completed fiscal year and (ii) the actual results of operations of 27
1514	1516		the provider's most recently completed fiscal year. 28
1515	1517		(39) A table detailing the following key financial metrics for the past three fiscal 29
1516	1518		years, including the most recent fiscal year, or for each year the provider has 30
1517	1519		been in operation if the provider has been in operation for less than three years, 31
1518	1520		plus the next three fiscal years, based on the provider's current and prior 32
1519	1521		annual audited financial statements and current five-year prospective financial 33
1520	1522		statements. If there is a material year over year change in any of the key 34
1521	1523		financial metrics, the provider shall include a narrative describing the reasons 35
1522	1524		for the material change. For providers who are part of an obligated group, the 36
1523	1525		ratios shall be computed for the provider alone and for the obligated group. 37
1524	1526		a. Liquidity ratios: 38
1525	1527		1. Days cash on hand ratio. 39
1526	1528		2. Cushion ratio. 40
1527	1529		b. Profitability ratios: 41
1528	1530		1. Operating ratio. 42
1529	1531		2. Net operating margin ratio. 43
1530	1532		3. Adjusted net operating margin ratio. 44
1531	1533		c. Capital structure ratios: 45
1532	1534		1. Debt service coverage ratio. 46
1533	1535		2. Unrestricted cash and investments to long-term debt ratio. 47
1534	1536		3. Capital expenditures as a percentage of depreciation expense 48
1535	1537		ratio. 49
1536	1538		(40) If the provider has had an actuarial study prepared within the prior three years, 50
1537	1539		a statement of actuarial opinion which includes a description of the key 51 General Assembly Of North Carolina Session 2025
1538		-	House Bill 357-~~Second~~ Edition Page 31
	1540	+	House Bill 357-First Edition Page 31
1539	1541		assumptions used to prepare the actuarial study and an opinion on satisfactory 1
1540	1542		actuarial balance. 2
1541	1543		(41) A summary of the last examination report issued by the Commissioner, if any, 3
1542	1544		with references to the page numbers of the examination report noting any 4
1543	1545		deficiencies found by the Commissioner, and the actions taken by the provider 5
1544	1546		to rectify those deficiencies, indicating in the summary where the full 6
1545	1547		examination report may be inspected at the continuing care retirement 7
1546	1548		community. The summary required by this subdivision shall not be required 8
1547	1549		if the last examination report is more than three years old. 9
1548	1550		(42) Any other material information concerning the continuing care retirement 10
1549	1551		community, the provider, or any related party of the provider, which, if 11
1550	1552		omitted, would lead a reasonable person not to enter a continuing care or 12
1551	1553		continuing care at home contract with the provider. 13
1552	1554		(b) A copy of the most common continuing care and continuing care at home contract 14
1553	1555		used by the provider shall be attached to each disclosure statement. To the extent multiple 15
1554	1556		continuing care or continuing care at home contracts are utilized by the provider for the 16
1555	1557		continuing care retirement community, a narrative shall be included within the disclosure 17
1556	1558		statement listing each contract type offered and the material differences of each. 18
1557	1559		(c) The cover page of the disclosure statement shall, in a prominent location and in 19
1558	1560		boldface type, include all of the following: 20
1559	1561		(1) The date of the disclosure statement. 21
1560	1562		(2) The last date through which the disclosure statement may be delivered. 22
1561	1563		(3) That the delivery of the disclosure statement to a contracting party before the 23
1562	1564		execution of a binding reservation agreement, continuing care contract, or 24
1563	1565		continuing care at home contract is required by this Article. 25
1564	1566		(4) That the disclosure statement has not been reviewed or approved by any 26
1565	1567		government agency or representative to ensure accuracy of the information set 27
1566	1568		out. 28
1567	1569		(5) That the disclosure statement has been filed with, and recorded by, the North 29
1568	1570		Carolina Department of Insurance in accordance with this Article. 30
1569	1571		(6) That the disclosure statement contains all of the information required by this 31
1570	1572		Article, that it is correct, in all material respects, and that knowingly delivering 32
1571	1573		a disclosure statement that contains an untrue statement or omits a material 33
1572	1574		fact may subject the provider to penalties as set forth in this Article. 34
1573	1575		(d) The date on the cover page of the disclosure statement shall coincide with the last day 35
1574	1576		of the provider's fiscal year covered by the information contained within the disclosure statement. 36
1575	1577		(e) The disclosure statement shall be in plain English and in language understandable by 37
1576	1578		a layperson and combine conciseness, simplicity, and accuracy to fully advise residents and 38
1577	1579		potential residents of the items required by this section. 39
1578	1580		(f) The Commissioner shall review the disclosure statement for completeness but is not 40
1579	1581		required to review the disclosure statement for accuracy. 41
1580	1582		(g) The Commissioner may require a provider to alter or amend a disclosure statement to 42
1581	1583		provide full and fair disclosure to residents and prospective residents, and the Commissioner may 43
1582	1584		require the revision of a disclosure statement which the Commissioner finds to be incomplete, 44
1583	1585		unnecessarily complex, voluminous, confusing, or illegible. 45
1584	1586		(h) The Commissioner may prescribe a standardized format for the disclosure statement 46
1585	1587		required by this section. 47
1586	1588		(i) The Commissioner shall post the current disclosure statement for each continuing care 48
1587	1589		retirement community on the Department's website in accordance with this Article. 49
1588	1590		"§ 58-64A-155. Required delivery of disclosure statement. 50 General Assembly Of North Carolina Session 2025
1589		-	Page 32 House Bill 357-~~Second~~ Edition
	1591	+	Page 32 House Bill 357-First Edition
1590	1592		(a) A provider shall deliver a current disclosure statement meeting the requirements of 1
1591	1593		G.S. 58-64A-150 to the person or the person's legal representative with whom a binding 2
1592	1594		reservation agreement, continuing care contract, or continuing care at home contract is to be 3
1593	1595		entered into. The disclosure statement shall be delivered no later than the earliest of the following 4
1594	1596		occurrences: (i) the execution of a binding reservation agreement, continuing care contract, or 5
1595	1597		continuing care at home contract, or (ii) the transfer of any money or other consideration, other 6
1596	1598		than a nonbinding reservation agreement deposit, to a provider by or on behalf of a prospective 7
1597	1599		resident. For purposes of this subsection, a disclosure statement is current if (i) it is dated within 8
1598	1600		one year plus 160 days prior to the date of delivery and (ii) it is the most recently recorded 9
1599	1601		disclosure statement on file with the Commissioner. 10
1600	1602		(b) The delivery required by this section may be by electronic means if the provider 11
1601	1603		obtains the written consent of the person with whom the binding reservation agreement, 12
1602	1604		continuing care contract, or continuing care at home contract is to be entered into. For the 13
1603	1605		purposes of this subsection, delivery by electronic means shall mean delivery by either of the 14
1604	1606		following methods: 15
1605	1607		(1) Delivery to an electronic mail address at which the person has consented to 16
1606	1608		receive the disclosure statement. 17
1607	1609		(2) Both of the following: 18
1608	1610		a. Posting the disclosure statement on an electronic network or site 19
1609	1611		accessible by the internet through use of a mobile application, 20
1610	1612		computer, mobile device, tablet, or any other electronic device. 21
1611	1613		b. Sending separate notice of the posting described in sub-subdivision a. 22
1612	1614		of this subdivision to the electronic mail address at which the person 23
1613	1615		consented to receive notice of the disclosure statement posting. 24
1614	1616		(c) After receiving delivery of a disclosure statement pursuant to this section, a 25
1615	1617		prospective resident shall sign an acknowledgement of receipt. The acknowledgement shall 26
1616	1618		include (i) the date, (ii) the name of the person signing, and (iii) the date of the disclosure 27
1617	1619		statement received, including date revised, if any. The provider shall provide a copy of the 28
1618	1620		acknowledgement of receipt to the person signing and shall maintain the original. The 29
1619	1621		acknowledgement of receipt required by this subsection may be received, given, and maintained 30
1620	1622		in either an electronic or paper form. 31
1621	1623		(d) A copy of all disclosure statements, including all amendments, filed with and 32
1622	1624		recorded by the Commissioner shall be maintained by the provider, in either electronic or paper 33
1623	1625		form, for at least five years. 34
1624	1626		"§ 58-64A-160. Annual revised disclosure statements. 35
1625	1627		(a) Within 150 days following the end of each fiscal year, a provider shall file with the 36
1626	1628		Commissioner a revised disclosure statement setting forth current information required pursuant 37
1627	1629		to G.S. 58-64A-150. The annual disclosure statement revision shall be accompanied by an annual 38
1628	1630		filing fee of two thousand dollars ($2,000). 39
1629	1631		(b) Within five business days of receipt of an annual revised disclosure statement and the 40
1630	1632		annual filing fee, the Commissioner shall notify the provider in writing that (i) the revised 41
1631	1633		disclosure statement has been received and recorded, (ii) the provider has met the filing 42
1632	1634		requirements of this section, and (iii) the annual revised disclosure statement is now considered 43
1633	1635		to be the current disclosure statement for purposes of this Article. After sending the notice, the 44
1634	1636		Commissioner shall post the annual revised disclosure statement on the Department's website 45
1635	1637		within five business days. After receiving the Commissioner's notice, the provider shall make the 46
1636	1638		annual revised disclosure statement available to all residents and depositors either in electronic 47
1637	1639		or paper form. 48
1638	1640		(c) The Commissioner may, upon a showing of good cause by the provider, extend the 49
1639	1641		due date of the annual disclosure statement revision for a reasonable period of time not to exceed 50
1640	1642		30 days. 51 General Assembly Of North Carolina Session 2025
1641		-	House Bill 357-~~Second~~ Edition Page 33
	1643	+	House Bill 357-First Edition Page 33
1642	1644		(d) If the annual disclosure statement revision is not received by the due date and no 1
1643	1645		extension has been granted, a one thousand dollar ($1,000) late fee shall accompany submission 2
1644	1646		of the annual disclosure statement revision. If the annual disclosure statement revision is more 3
1645	1647		than 30 days past due, an additional fee of thirty dollars ($30.00) for each day over the first 30 4
1646	1648		days shall accompany submission of the annual disclosure statement revision. The Commissioner 5
1647	1649		may waive the late fee upon a showing of good cause by the provider. 6
1648	1650		"§ 58-64A-165. Other revisions to disclosure statement. 7
1649	1651		(a) A provider may revise its disclosure statement at any time if, in the opinion of the 8
1650	1652		provider, revision is necessary to prevent an otherwise current disclosure statement from 9
1651	1653		containing a material misstatement of fact or omitting a material fact required to be stated therein. 10
1652	1654		A provider that revises its disclosure statement for this purpose shall submit the revised disclosure 11
1653	1655		statement to the Commissioner before delivery of the disclosure statement to any resident or 12
1654	1656		prospective resident. 13
1655	1657		(b) If a disclosure statement is revised in accordance with this section or 14
1656	1658		G.S. 58-64A-150(g), the cover page shall additionally be revised to reflect the revision date. 15
1657	1659		(c) Within five business days of receipt of a revised disclosure statement pursuant to this 16
1658	1660		section, the Commissioner shall notify the provider in writing that the revised disclosure 17
1659	1661		statement has been received and recorded and is considered to be the current disclosure statement 18
1660	1662		for purposes of this Article. After sending this notification, the Commissioner shall post the 19
1661	1663		revised disclosure statement on the Department's website within five business days. After 20
1662	1664		receiving the Commissioner's notification, a provider revising its disclosure statement pursuant 21
1663	1665		to this section shall make the revised disclosure statement available to all residents either in 22
1664	1666		electronic or paper form. 23
1665	1667		"Part 6. Binding Reservation Agreement and Continuing Care Contract. 24
1666	1668		"§ 58-64A-170. Binding reservation agreement. 25
1667	1669		A binding reservation agreement shall include all of the following: 26
1668	1670		(1) A provision that the person entering into the agreement may rescind the 27
1669	1671		agreement within 30 days following the later of the following occurrences: (i) 28
1670	1672		the execution of the agreement or (ii) the receipt of a disclosure statement that 29
1671	1673		meets the requirements of G.S. 58-64A-150. 30
1672	1674		(2) A provision that the agreement shall be automatically canceled if either of the 31
1673	1675		following occurs: (i) a depositor dies before signing a continuing care contract 32
1674	1676		or (ii) a depositor would be precluded from signing a continuing care contract 33
1675	1677		and occupying a living unit in the continuing care retirement community under 34
1676	1678		the terms of a continuing care contract due to illness, injury, or incapacity. 35
1677	1679		(3) A provision that, if an agreement is rescinded, automatically canceled, or 36
1678	1680		otherwise canceled by the depositor, the depositor shall receive a refund of all 37
1679	1681		money or other consideration transferred to the provider. All of the following 38
1680	1682		shall be deducted from the depositor's refund: 39
1681	1683		a. Nonstandard costs specifically incurred by the provider at the request 40
1682	1684		of the depositor and described in the agreement. 41
1683	1685		b. Any nonrefundable fees specifically set forth in the agreement. 42
1684	1686		c. Any service charge specifically set forth in the agreement that shall 43
1685	1687		not exceed the greater of (i) three thousand dollars ($3,000) or (ii) two 44
1686	1688		percent (2%) of the entrance fee. In no event shall the service charge 45
1687	1689		exceed the amount of consideration transferred to the provider by the 46
1688	1690		depositor or a service charge be assessed due to the termination of the 47
1689	1691		agreement because of the failure of the provider to meet its obligations 48
1690	1692		under the agreement, or upon the failure of the provider to obtain a 49
1691	1693		permanent license in accordance with this Article. 50 General Assembly Of North Carolina Session 2025
1692		-	Page 34 House Bill 357-~~Second~~ Edition
	1694	+	Page 34 House Bill 357-First Edition
1693	1695		(4) A provision that any refund due to a depositor for a cancellation or termination 1
1694	1696		for reasons not provided for in this section shall be computed in accordance 2
1695	1697		with the terms of the agreement. 3
1696	1698		"§ 58-64A-175. Continuing care contract. 4
1697	1699		(a) A continuing care contract shall include all of the following: 5
1698	1700		(1) A provision that the person contracting with the provider may rescind the 6
1699	1701		contract within 30 days following the later of (i) the execution of the contract 7
1700	1702		or (ii) the receipt of a disclosure statement that meets the requirements of 8
1701	1703		G.S. 58-64A-150, and a resident to whom the contract pertains is not required 9
1702	1704		to move into the continuing care retirement community before the expiration 10
1703	1705		of the 30-day period. 11
1704	1706		(2) A provision that, if a resident dies before occupying a living unit in the 12
1705	1707		continuing care retirement community, or if, on account of illness, injury, or 13
1706	1708		incapacity, a resident would be precluded from occupying a living unit in the 14
1707	1709		continuing care retirement community under the terms of the contract, the 15
1708	1710		contract is automatically canceled. 16
1709	1711		(3) A provision that, for rescinded or canceled contracts under this subsection and 17
1710	1712		contracts canceled before a living unit is initially available for occupancy by 18
1711	1713		the first resident of a living unit, the resident or the resident's legal 19
1712	1714		representative, shall receive a refund of all money or other consideration 20
1713	1715		transferred to the provider, less (i) periodic fees specified in the contract and 21
1714	1716		applicable only to the period a living unit was actually occupied by the 22
1715	1717		resident; (ii) those nonstandard costs specifically incurred by the provider at 23
1716	1718		the request of the resident and described in the contract or any contract 24
1717	1719		amendment signed by the resident; (iii) nonrefundable fees, if set out in the 25
1718	1720		contract; and (iv) a reasonable service charge, if set out in the contract, not to 26
1719	1721		exceed the greater of three thousand dollars ($3,000) or two percent (2%) of 27
1720	1722		the entrance fee. In no event shall the service charge exceed the amount of 28
1721	1723		consideration transferred to the provider by the resident, or a service charge 29
1722	1724		be assessed due to the termination of the contract because of the failure of the 30
1723	1725		provider to meet its obligations under the contract, or upon the failure of the 31
1724	1726		provider to obtain a permanent license in accordance with this Article. 32
1725	1727		(4) A provision that any refund due to a resident for a cancellation or termination 33
1726	1728		for reasons not provided for in this section shall be computed in accordance 34
1727	1729		with the terms of the contract. 35
1728	1730		(b) A continuing care contract shall specify all of the following: 36
1729	1731		(1) All fees required of residents, including any entrance fee and any ongoing 37
1730	1732		periodic fees. 38
1731	1733		(2) The services to be provided. 39
1732	1734		(3) The policy regarding changing the resident's living unit, if necessary, for the 40
1733	1735		protection of the health or safety of the resident or the general and economic 41
1734	1736		welfare of other residents. 42
1735	1737		(4) The policies to be implemented if the resident cannot pay the periodic fees. 43
1736	1738		(5) The terms governing the refund of any portion of the entrance fee in the event 44
1737	1739		of death or cancellation by the resident or provider. 45
1738	1740		(6) The policy regarding increasing the periodic fees. 46
1739	1741		(7) A description of the living unit. 47
1740	1742		(8) Any property rights of the resident. 48
1741	1743		(9) The policy, if any, regarding periodic fee adjustments if the resident is absent 49
1742	1744		from the continuing care retirement community. 50 General Assembly Of North Carolina Session 2025
1743		-	House Bill 357-~~Second~~ Edition Page 35
	1745	+	House Bill 357-First Edition Page 35
1744	1746		(10) Any requirement that the resident maintain long-term care insurance or apply 1
1745	1747		for Medicaid benefits or any other public assistance program. 2
1746	1748		(c) A continuing care contract shall include the following notice immediately above the 3
1747	1749		contract signature line and be in type that is boldfaced, capitalized, underlined, or otherwise set 4
1748	1750		out from the surrounding written material so as to be conspicuous: 5
1749	1751		"NOTICE 6
1750	1752		7
1751	1753		Because the authority to enter into continuing care contracts granted by the North Carolina 8
1752	1754		Department of Insurance is neither a guarantee of performance by the provider nor an 9
1753	1755		endorsement of any continuing care contract provision, prospective residents must carefully 10
1754	1756		consider the risks, benefits, and costs before signing a continuing care contract and are strongly 11
1755	1757		encouraged to seek financial and legal advice before doing so." 12
1756	1758		"Part 7. Continuing Care at Home. 13
1757	1759		"§ 58-64A-180. Home care services defined. 14
1758	1760		As used is this Part, "home care services" is defined in G.S. 131E-136. 15
1759	1761		"§ 58-64A-185. Application. 16
1760	1762		(a) No person shall arrange or provide continuing care at home unless licensed by the 17
1761	1763		Commissioner pursuant to this Article. Only a provider who has obtained a permanent license or 18
1762	1764		a restricted permanent license pursuant to this Article may apply to the Commissioner for a 19
1763	1765		continuing care at home license. The application shall include all of the following: 20
1764	1766		(1) An application fee of five hundred dollars ($500.00). 21
1765	1767		(2) A draft amended disclosure statement containing a description of the proposed 22
1766	1768		continuing care at home program, including the primary market area to be 23
1767	1769		served, the types of services to be provided, and the fees to be charged. 24
1768	1770		(3) A copy of the proposed continuing care at home contract. 25
1769	1771		(4) An actuarial study prepared in accordance with accepted actuarial standards 26
1770	1772		of practice which estimates when the continuing care at home program is 27
1771	1773		projected to be in satisfactory actuarial balance. Providers who do not collect 28
1772	1774		entrance fees or some other type of up-front prepayment of costs are exempt 29
1773	1775		from this requirement and shall only be required to submit an actuarial 30
1774	1776		projection of future population flows and adult care home bed and nursing bed 31
1775	1777		needs using appropriate mortality, morbidity, withdrawal, occupancy, and 32
1776	1778		other demographic assumptions, and using a projection period that extends to 33
1777	1779		a point at which, in the actuary's professional judgment, the use of a longer 34
1778	1780		period would not materially affect the results and conclusions. 35
1779	1781		(5) A market study prepared by a person experienced in the preparation of market 36
1780	1782		studies for continuing care at home or similar programs that demonstrates 37
1781	1783		sufficient interest in a continuing care at home program. 38
1782	1784		(6) Prospective financial statements prepared by an independent certified public 39
1783	1785		accountant that show the financial impact of providing continuing care at 40
1784	1786		home on the provider and the continuing care retirement community. The 41
1785	1787		prospective financial statements shall include a statement of activities 42
1786	1788		reporting the revenue and expense details for providing continuing care at 43
1787	1789		home, as well as the impact the program will have on the operations of the 44
1788	1790		provider and the continuing care retirement community, including the 45
1789	1791		operating reserve. 46
1790	1792		(7) Evidence of the license required under Part 3 of Article 6 of Chapter 131E of 47
1791	1793		the General Statutes to provide home care services, or a contract with a 48
1792	1794		licensed home care agency for the provision of home care services to be 49
1793	1795		provided to residents under the continuing care at home program. 50 General Assembly Of North Carolina Session 2025
1794		-	Page 36 House Bill 357-~~Second~~ Edition
	1796	+	Page 36 House Bill 357-First Edition
1795	1797		(b) The Commissioner shall comply with the review schedule in G.S. 58-64A-70 in 1
1796	1798		response to an application for a continuing care at home license. 2
1797	1799		(c) The Commissioner shall approve an application for a continuing care at home license 3
1798	1800		if all of the following requirements are met: 4
1799	1801		(1) The application complies with this section. 5
1800	1802		(2) None of the grounds for denial listed in G.S. 58-64A-280 apply to the 6
1801	1803		applicant. 7
1802	1804		(3) The applicant is able to provide continuing care at home as proposed. 8
1803	1805		(4) There is sufficient consumer interest in the continuing care at home program 9
1804	1806		proposed by the applicant, as evidenced by the market study. 10
1805	1807		(5) The program proposed by the applicant will not have a detrimental financial 11
1806	1808		impact on the applicant and continuing care retirement community, as 12
1807	1809		determined by the Commissioner. 13
1808	1810		(d) After receiving a continuing care at home license, the provider may arrange or provide 14
1809	1811		continuing care at home and shall file an amended disclosure statement with the Commissioner 15
1810	1812		which contains the information regarding continuing care at home required by G.S. 58-64A-150. 16
1811	1813		(e) After the issuance of a continuing care at home license, the Commissioner shall 17
1812	1814		require a provider to submit periodic reports in a form prescribed by the Commissioner to monitor 18
1813	1815		the status of the continuing care at home program. 19
1814	1816		"§ 58-64A-190. Continuing care at home contract. 20
1815	1817		(a) A continuing care at home contract shall include all of the following provisions: 21
1816	1818		(1) A provision that the individual contracting with the provider may rescind the 22
1817	1819		contract within 30 days following the later of (i) the execution of the contract 23
1818	1820		or (ii) the receipt of a disclosure statement that meets the requirements of 24
1819	1821		G.S. 58-64A-150. 25
1820	1822		(2) A provision that, if a resident dies prior to the effective start date of services, 26
1821	1823		or if, on account of illness, injury, or incapacity, a resident would be precluded 27
1822	1824		from meeting the eligibility terms of the contract, the contract is automatically 28
1823	1825		canceled. 29
1824	1826		(3) A provision that, for rescinded or canceled contracts under this subsection, the 30
1825	1827		resident, or the resident's legal representative, shall receive a refund of all 31
1826	1828		money or other consideration transferred to the provider, less (i) periodic fees 32
1827	1829		specified in the contract and applicable only to the period when services were 33
1828	1830		provided to the resident; (ii) nonrefundable fees, if set out in the contract; and 34
1829	1831		(iii) a reasonable service charge, if set out in the contract, not to exceed the 35
1830	1832		greater of three thousand dollars ($3,000) or two percent (2%) of the entrance 36
1831	1833		fee, if any. 37
1832	1834		(4) A provision that any refund due to a resident for any other cancellation or 38
1833	1835		termination not provided for in subdivisions (1) and (2) of this subsection shall 39
1834	1836		be computed in accordance with the terms of the contract. 40
1835	1837		(b) A continuing care at home contract shall specify all of the following: 41
1836	1838		(1) All fees required, including any entrance fee and any ongoing periodic fees. 42
1837	1839		(2) The services to be provided. 43
1838	1840		(3) The policies to be implemented if the resident cannot pay the periodic fees. 44
1839	1841		(4) The terms governing the refund of any portion of the entrance fee in the event 45
1840	1842		of death or cancellation by the resident or provider. 46
1841	1843		(5) The policy regarding the adjustment of periodic fees. 47
1842	1844		(6) Whether transportation will be provided to residents, including travel to and 48
1843	1845		from the continuing care retirement community for services. 49
1844	1846		(7) The mechanism for monitoring residents who live outside the continuing care 50
1845	1847		retirement community. 51 General Assembly Of North Carolina Session 2025
1846		-	House Bill 357-~~Second~~ Edition Page 37
	1848	+	House Bill 357-First Edition Page 37
1847	1849		(8) The process that will be followed to establish priority if a resident wishes to 1
1848	1850		exercise the resident's right to move into an independent living unit at a 2
1849	1851		continuing care retirement community operated by the provider. 3
1850	1852		(9) The process the provider will follow if it becomes necessary for the resident 4
1851	1853		to move into a long-term care facility. 5
1852	1854		(10) The policy that will be followed if a resident chooses not to move to a 6
1853	1855		long-term care facility when recommended by the provider. 7
1854	1856		(11) The policy, if any, that would entitle a resident to select placement in a 8
1855	1857		long-term care facility that is not owned and operated by the provider or by a 9
1856	1858		related party of the provider. 10
1857	1859		(12) A statement describing any applicable geographical limits of the continuing 11
1858	1860		care at home program, and the policy that will be followed in the event that a 12
1859	1861		resident relocates to a different residence outside the geographical limits 13
1860	1862		covered by the continuing care at home program. 14
1861	1863		(c) A continuing care at home contract shall include the following notice immediately 15
1862	1864		above the contract signature line and be in type that is boldfaced, capitalized, underlined, or 16
1863	1865		otherwise set out from the surrounding written material so as to be conspicuous: 17
1864	1866		"NOTICE 18
1865	1867		19
1866	1868		Because the authority to enter into continuing care at home contracts granted by the North 20
1867	1869		Carolina Department of Insurance is neither a guarantee of performance by the provider nor an 21
1868	1870		endorsement of any continuing care at home contract provision, prospective residents must 22
1869	1871		carefully consider the risks, benefits, and costs before signing a continuing care at home contract 23
1870	1872		and are strongly encouraged to seek financial and legal advice before doing so." 24
1871	1873		"Part 8. Financial Reporting and Monitoring. 25
1872	1874		"§ 58-64A-195. General requirements related to filing and extensions for filing of annual 26
1873	1875		audited financial statements. 27
1874	1876		(a) All providers shall have an annual audit by an independent certified public accountant 28
1875	1877		and shall file audited financial statements with the Commissioner within 150 days following the 29
1876	1878		end of each fiscal year. 30
1877	1879		(b) Extensions of the filing date may be granted by the Commissioner for 30-day periods 31
1878	1880		upon a showing by the provider and its independent certified public accountant of the reasons for 32
1879	1881		requesting an extension and determination by the Commissioner of good cause for an extension. 33
1880	1882		The request for extension must be received in writing not less than 10 days before the due date 34
1881	1883		and in sufficient detail to permit the Commissioner to make an informed decision with respect to 35
1882	1884		the requested extension. 36
1883	1885		(c) If an initial extension is granted in accordance with the provisions in subsection (b) 37
1884	1886		of this section, a similar extension of 30 days is granted for the filing of the provider's annual 38
1885	1887		disclosure statement. 39
1886	1888		"§ 58-64A-200. Contents of annual audited financial statements. 40
1887	1889		(a) The annual audited financial statements shall report the financial position of the 41
1888	1890		provider as of the end of the most recent fiscal year and the results of its operations, cash flows, 42
1889	1891		and changes in equity or net assets for the year then ended. The audited financial statements shall 43
1890	1892		be comparative, presenting the amounts as of the end of the most current year-end and the 44
1891	1893		amounts as of the immediately preceding year-end. However, in the first year in which a provider 45
1892	1894		is required to file audited financial statements, the comparative data may be omitted. 46
1893	1895		(b) The audited financial statements shall include the following: 47
1894	1896		(1) Report of independent certified public accountant. 48
1895	1897		(2) Balance sheet reporting assets, liabilities, and net assets or equity. 49
1896	1898		(3) Statement of operations. 50
1897	1899		(4) Statement of cash flows. 51 General Assembly Of North Carolina Session 2025
1898		-	Page 38 House Bill 357-~~Second~~ Edition
	1900	+	Page 38 House Bill 357-First Edition
1899	1901		(5) Statement of changes in net assets or equity. 1
1900	1902		(6) Notes to financial statements. 2
1901	1903		(c) The audited financial statements shall be prepared in accordance with one of the 3
1902	1904		following requirements: 4
1903	1905		(1) If a provider is required by generally accepted accounting principles to have 5
1904	1906		their financial statements consolidated with other persons, the audited 6
1905	1907		consolidated financial statements shall include a consolidating balance sheet, 7
1906	1908		a consolidating statement of operations and changes in net assets or equity, 8
1907	1909		and a consolidating statement of cash flows as supplemental information to 9
1908	1910		the audited consolidated financial statements. This supplemental information 10
1909	1911		shall also include a statement of operations for each continuing care retirement 11
1910	1912		community operated by the provider under this Article. 12
1911	1913		(2) If the provider includes one or more persons acting in concert to offer and 13
1912	1914		provide continuing care, the audited financial statements shall be combined 14
1913	1915		and shall include a combining balance sheet, a combining statement of 15
1914	1916		operations and changes in net assets or equity, and a combining statement of 16
1915	1917		cash flows as supplemental information to the audited combined financial 17
1916	1918		statements. This supplemental information shall also include a statement of 18
1917	1919		operations for each continuing care retirement community operated by the 19
1918	1920		provider under this Article. 20
1919	1921		(3) If a provider is part of an obligated group, the audited financial statements 21
1920	1922		shall be either consolidated or combined with the other members of the 22
1921	1923		obligated group and shall include a combining or consolidating balance sheet, 23
1922	1924		a combining or consolidating statement of operations and changes in net assets 24
1923	1925		or equity, and a combining or consolidating statement of cash flows as 25
1924	1926		supplemental information to the audited combined or consolidated financial 26
1925	1927		statements. This supplemental information shall also include a statement of 27
1926	1928		operations for each continuing care retirement community operated by the 28
1927	1929		provider under this Article. 29
1928	1930		(4) If the provider is not required by generally accepted accounting principles to 30
1929	1931		have their financial statements consolidated with other persons, does not 31
1930	1932		include one or more persons acting in concert to offer and provide continuing 32
1931	1933		care, and is not part of an obligated group, then the audited financial 33
1932	1934		statements shall be a stand-alone financial audit of the provider. The audited 34
1933	1935		financial statements must include as supplemental information, if the provider 35
1934	1936		operates more than one continuing care retirement community or has 36
1935	1937		operations that are separate and distinct from the operation of a continuing 37
1936	1938		care retirement community or communities under this Article, a statement of 38
1937	1939		operations for each continuing care retirement community operated by the 39
1938	1940		provider under this Article. 40
1939	1941		(d) If a provider is also licensed to provide continuing care at home, the audited financial 41
1940	1942		statements shall account for the related revenue and expenses generated from the continuing care 42
1941	1943		at home program separate from the provider's other operations when providing the information 43
1942	1944		required by this section. 44
1943	1945		"§ 58-64A-205. Quarterly reporting. 45
1944	1946		Within 45 days after the end of each fiscal quarter, a provider shall file with the 46
1945	1947		Commissioner all of the following: 47
1946	1948		(1) Quarterly unaudited financial statements of the provider and any obligated 48
1947	1949		group of which the provider is a member, which shall include a balance sheet, 49
1948	1950		a statement of operations, and a statement of cash flows, which shall contain 50 General Assembly Of North Carolina Session 2025
1949		-	House Bill 357-~~Second~~ Edition Page 39
	1951	+	House Bill 357-First Edition Page 39
1950	1952		the same categories and line items as the annual audited financial statements 1
1951	1953		filed with the Commissioner pursuant to G.S. 58-64A-195. 2
1952	1954		(2) The 12-month daily average occupancy rate by living unit type at each 3
1953	1955		continuing care retirement community operated by the provider in this State 4
1954	1956		in a form prescribed by the Commissioner. 5
1955	1957		(3) Notice of the following: 6
1956	1958		a. Any change in the provider's or the provider's controlling person's 7
1957	1959		board of directors or other governing body, president, chief executive 8
1958	1960		officer, and chief financial officer. Notice shall include the name of 9
1959	1961		the provider, the name of the controlling person, if applicable, the 10
1960	1962		name of the person previously holding the position, the name of the 11
1961	1963		person currently holding the position, a brief biography of the person 12
1962	1964		currently holding the position, and the date the position change took 13
1963	1965		place. 14
1964	1966		b. Any change in the organizational documents of the provider, including 15
1965	1967		changes in the provider's articles of incorporation and bylaws. Copies 16
1966	1968		of the changed documents shall be submitted with the notification to 17
1967	1969		the Commissioner. 18
1968	1970		"§ 58-64A-210. Actuarial study. 19
1969	1971		(a) A provider shall submit to the Commissioner, at least once every three years, an 20
1970	1972		actuarial study prepared in accordance with accepted actuarial standards of practice for each 21
1971	1973		continuing care retirement community operated by the provider in this State and any continuing 22
1972	1974		care at home program that the provider is licensed for pursuant to this Article. 23
1973	1975		(b) If the actuary is unable to form an opinion, or if the opinion is adverse or qualified, 24
1974	1976		the statement of actuarial opinion and the actuarial study shall specifically state the reason. 25
1975	1977		(c) The Commissioner may request the information required in this section more 26
1976	1978		frequently to assist in the determination of a possible hazardous condition. 27
1977	1979		(d) A provider required to file an actuarial study under this section that held a license on 28
1978	1980		the effective date of this section shall file an actuarial study with the Commissioner before the 29
1979	1981		expiration of three years following the effective date of this section. Thereafter, each provider 30
1980	1982		shall file its required actuarial study before the expiration of three years following the date it last 31
1981	1983		filed an actuarial study with the Commissioner. 32
1982	1984		(e) A provider required to file an actuarial study under this section that did not hold a 33
1983	1985		license on the effective date of this section shall file its first actuarial study within 45 days 34
1984	1986		following the due date for the provider's annual audited financial statements for the fiscal year in 35
1985	1987		which the provider obtained its permanent license. Thereafter, the provider shall file its required 36
1986	1988		actuarial study before the expiration of three years following the date it last filed an actuarial 37
1987	1989		study with the Commissioner. 38
1988	1990		(f) A provider that only offers health care on a fee-for-service basis or only provides a 39
1989	1991		limited discount or limited number of free days in a long-term care facility shall be exempt, unless 40
1990	1992		otherwise required by the Commissioner, from the actuarial study requirement in this section. 41
1991	1993		Providers exempt pursuant to this subsection shall submit to the Commissioner, at least once 42
1992	1994		every five years, an actuarial projection of future population flows and adult care home bed and 43
1993	1995		nursing bed needs using appropriate mortality, morbidity, withdrawal, occupancy, and other 44
1994	1996		demographic assumptions and using a projection period that extends to a point at which, in the 45
1995	1997		actuary's professional judgment, the use of a longer period would not materially affect the results 46
1996	1998		and conclusions. The Commissioner may require an actuarial projection of future population 47
1997	1999		flows and adult care home bed and nursing bed needs sooner if there has been an increase or 48
1998	2000		decrease of twenty percent (20%) or more of one or more types of living units at a continuing 49
1999	2001		care retirement community during the provider's most recent fiscal year. 50
2000	2002		"§ 58-64A-215. Additional reporting. 51 General Assembly Of North Carolina Session 2025
2001		-	Page 40 House Bill 357-~~Second~~ Edition
	2003	+	Page 40 House Bill 357-First Edition
2002	2004		If the Commissioner determines that additional information is needed to properly monitor the 1
2003	2005		financial condition or operations of a provider or continuing care retirement community or is 2
2004	2006		otherwise needed to protect the interests of residents and the general public, the Commissioner 3
2005	2007		may require a provider licensed under this Article to file any of the following: 4
2006	2008		(1) Monthly unaudited financial statements in the format required by 5
2007	2009		G.S. 58-64A-205 which shall be due no later than 45 days after the end of 6
2008	2010		each month. 7
2009	2011		(2) Any other data, financial statements, and pertinent information as the 8
2010	2012		Commissioner may reasonably require regarding (i) the provider, (ii) the 9
2011	2013		provider's obligated group, (iii) the continuing care retirement community, or 10
2012	2014		(iv) any related party, if the provider relies on a contractual or financial 11
2013	2015		relationship with the related party in order to meet the financial requirements 12
2014	2016		of this Article, or has a material amount invested in, or has a material amount 13
2015	2017		of receivables due from, the related party. 14
2016	2018		"Part 9. Notification Requirements. 15
2017	2019		"§ 58-64A-220. Notifications to Commissioner and residents. 16
2018	2020		A provider shall notify the Commissioner and all residents in writing within 10 business days 17
2019	2021		whenever any of the following apply: 18
2020	2022		(1) The provider fails to maintain the operating reserve required pursuant to Part 19
2021	2023		11 of this Article. 20
2022	2024		(2) The provider, or any obligated group of which the provider is a member, 21
2023	2025		violates or seeks modification, waiver, or extension of any material covenant 22
2024	2026		or material payment terms contained in any debt agreement. 23
2025	2027		(3) The provider has any entrance fee refunds that become more than 30 days 24
2026	2028		contractually past due. 25
2027	2029		(4) The provider plans to reduce the number of any type of living unit by twenty 26
2028	2030		percent (20%) or more. The notification shall include a statement describing 27
2029	2031		the reasons for the reduction and the effect, if any, on residents and the 28
2030	2032		financial condition of the provider. For the purposes of this subdivision, the 29
2031	2033		percentage shall be based on the type of living unit being reduced. 30
2032	2034		(5) The provider makes any change to its name, or the name of a continuing care 31
2033	2035		retirement community operated by the provider in this State, including the 32
2034	2036		adoption of an assumed business name. 33
2035	2037		(6) Any proceeding for denial, suspension, or revocation of any license or permit 34
2036	2038		needed to operate all or part of a continuing care retirement community in this 35
2037	2039		State. 36
2038	2040		"§ 58-64A-225. Material changes or deviations in information. 37
2039	2041		(a) An applicant or provider shall notify the Commissioner of material changes or 38
2040	2042		deviations in any information submitted to the Commissioner pursuant to this Article within 10 39
2041	2043		business days after the applicant or provider becomes aware of the change or deviation. 40
2042	2044		(b) Within 30 days after receiving notice of a material change or deviation, the 41
2043	2045		Commissioner shall advise the applicant or provider in writing whether any additional action 42
2044	2046		needs to be taken as a result of the material change or deviation. 43
2045	2047		(c) The Commissioner may suspend any approval, certification, license, or permit issued 44
2046	2048		pursuant to this Article if the applicant or provider fails to give written notice of material changes 45
2047	2049		or deviations required by this section. The suspension shall remain in effect until the 46
2048	2050		Commissioner has (i) assessed the potential impact of the material changes or deviations on the 47
2049	2051		applicant or provider and the interests of residents and depositors and (ii) taken any action 48
2050	2052		necessary under this Article to protect the interests of any residents and depositors. 49
2051	2053		(d) For the purposes of this section, material changes or deviations mean any change or 50
2052	2054		extraordinary occurrence which creates or causes, or could create or cause, an applicant or 51 General Assembly Of North Carolina Session 2025
2053		-	House Bill 357-~~Second~~ Edition Page 41
	2055	+	House Bill 357-First Edition Page 41
2054	2056		provider to be in a hazardous condition or, for a proposed continuing care retirement community 1
2055	2057		or proposed expansion of a continuing care retirement community, to no longer be financially 2
2056	2058		viable. 3
2057	2059		"Part 10. Other Transactions and Changes. 4
2058	2060		"§ 58-64A-230. Purchase, sale, or transfer of ownership interest in the real property of a 5
2059	2061		continuing care retirement community. 6
2060	2062		(a) No permit, certificate, or license issued pursuant to this Article is transferable, and no 7
2061	2063		permit, certificate, or license issued pursuant to this Article has value for sale or exchange as 8
2062	2064		property. 9
2063	2065		(b) A provider or any other person who owns the real property used in the operations of 10
2064	2066		a continuing care retirement community shall obtain approval from the Commissioner before 11
2065	2067		consummating any sale or transfer of any real property used in the operations of a continuing 12
2066	2068		care retirement community, including a sale-leaseback transaction, or any interest in a continuing 13
2067	2069		care retirement community, other than the sale of an independent living unit to a resident or other 14
2068	2070		transferee. 15
2069	2071		(c) A provider shall obtain approval from the Commissioner before consummating any 16
2070	2072		purchase of real property currently leased and used by the provider in the operations of a 17
2071	2073		continuing care retirement community. Any purchase option to be entered into by the provider 18
2072	2074		that requires a purchase option deposit shall only be entered into if the deposit is placed in an 19
2073	2075		escrow account or secured in another method acceptable to the Commissioner. 20
2074	2076		(d) A provider shall request approval of any transaction listed in subsection (b) or (c) of 21
2075	2077		this section by filing a request for approval with the Commissioner, made under oath or 22
2076	2078		affirmation, at least 45 days prior to consummating the transaction. The request for approval 23
2077	2079		required by this subsection shall include all of the following: 24
2078	2080		(1) The identity and description of the persons involved in the transaction. 25
2079	2081		(2) A description of the transaction and the terms of the transaction. 26
2080	2082		(3) A description of the financial impact on the applicant. 27
2081	2083		(4) If applicable, a plan for ensuring performance of existing continuing care and 28
2082	2084		continuing care at home contract obligations. 29
2083	2085		(5) Any other information reasonably required by the Commissioner. 30
2084	2086		(e) The Commissioner shall comply with the review schedule in G.S. 58-64A-70 in 31
2085	2087		response to a request for approval pursuant to this section. 32
2086	2088		(f) The Commissioner shall approve a request for approval if all of the following 33
2087	2089		requirements are met: 34
2088	2090		(1) The request complies with this section. 35
2089	2091		(2) None of the grounds for denial listed in G.S. 58-64A-280 apply to the 36
2090	2092		applicant. 37
2091	2093		(3) The transaction does not jeopardize the financial stability of the applicant or 38
2092	2094		prejudice the interest of residents. 39
2093	2095		(g) A provider shall give written notice to all affected residents and depositors of the 40
2094	2096		proposed transaction within 10 business days after receiving approval from the Commissioner. 41
2095	2097		(h) The Commissioner may revoke or restrict the certificate or license of a provider or 42
2096	2098		take other administrative action pursuant to Part 12 of this Article if a provider violates the 43
2097	2099		provisions of this section. 44
2098	2100		"§ 58-64A-235. Change of control of a provider. 45
2099	2101		(a) No person shall enter into an agreement to merge with, or to otherwise acquire control 46
2100	2102		of, a provider holding a certificate or license under this Article unless the transaction is approved 47
2101	2103		by the Commissioner. To obtain the Commissioner's approval, the acquiring person shall file a 48
2102	2104		request for approval with the Commissioner. 49 General Assembly Of North Carolina Session 2025
2103		-	Page 42 House Bill 357-~~Second~~ Edition
	2105	+	Page 42 House Bill 357-First Edition
2104	2106		(b) The request for approval required by this section shall be in a form prescribed by the 1
2105	2107		Commissioner, made under oath or affirmation, and shall contain all of the following 2
2106	2108		information: 3
2107	2109		(1) The name and address of each acquiring person and the following additional 4
2108	2110		information regarding those persons: 5
2109	2111		a. If the person is not an individual, a report of the nature of its business 6
2110	2112		operations during the past five years or for a lesser period as the person 7
2111	2113		and any predecessors have been in existence. 8
2112	2114		b. A description of the business intended to be done by the person and 9
2113	2115		the person's related parties. 10
2114	2116		c. A list of all individuals who are or who have been selected to become 11
2115	2117		directors or executive officers of the person, or who perform or will 12
2116	2118		perform functions appropriate to those positions. 13
2117	2119		d. For each individual listed pursuant to this subdivision, the person's 14
2118	2120		principal occupation and all offices and positions held during the past 15
2119	2121		five years and any conviction of crimes other than minor traffic 16
2120	2122		violations during the past 10 years. 17
2121	2123		(2) The source, nature, and amount of the consideration used or to be used in 18
2122	2124		effecting the merger or other acquisition of control; a description of any 19
2123	2125		transaction wherein funds were or are to be obtained for that purpose, 20
2124	2126		including any pledge of the provider's stock, or the stock of any of its 21
2125	2127		subsidiaries or controlling persons; and the identity of persons providing the 22
2126	2128		consideration. 23
2127	2129		(3) Fully audited financial information as to the earnings and financial condition 24
2128	2130		of each acquiring person for the preceding five fiscal years, or for a lesser 25
2129	2131		period as the acquiring person and any predecessors have been in existence, 26
2130	2132		and similar unaudited information as of a date not earlier than 90 days prior 27
2131	2133		to the filing of the written notice. 28
2132	2134		(4) Any plans or proposals that each acquiring person may have to liquidate the 29
2133	2135		provider, or any continuing care retirement community operated by the 30
2134	2136		provider in this State, to sell its assets or merge or consolidate it with any 31
2135	2137		person, or to make any other material change in its business or corporate 32
2136	2138		structure or management. 33
2137	2139		(5) A description of the effect, if any, that the merger or other acquisition of 34
2138	2140		control will have on the financial condition of the provider. 35
2139	2141		(6) A description of any change in the provision of goods and services to the 36
2140	2142		provider and residents. 37
2141	2143		(7) A description of any agreements made or to be made with residents which will 38
2142	2144		amend any continuing care or continuing care at home contract at the time of 39
2143	2145		the transfer of control. 40
2144	2146		(8) A description of any service or contractual obligation with residents which 41
2145	2147		will change as a result of the change in control. 42
2146	2148		(9) Any additional information as the Commissioner may require as necessary or 43
2147	2149		appropriate for the protection of residents or in the public interest. 44
2148	2150		(c) The Commissioner shall comply with the review schedule in G.S. 58-64A-70 in 45
2149	2151		response to a request for approval pursuant to this section. 46
2150	2152		(d) The Commissioner shall approve a request for approval pursuant to this section if all 47
2151	2153		of the following requirements are met: 48
2152	2154		(1) The request for approval complies with this section. 49
2153	2155		(2) None of the grounds for denial listed in G.S. 58-64A-280 apply to the 50
2154	2156		applicant. 51 General Assembly Of North Carolina Session 2025
2155		-	House Bill 357-~~Second~~ Edition Page 43
	2157	+	House Bill 357-First Edition Page 43
2156	2158		(3) After the change of control, the provider will be able to satisfy the certification 1
2157	2159		or licensure requirements, as applicable, of this Article. 2
2158	2160		(4) The financial condition of any acquiring person will not jeopardize the 3
2159	2161		financial stability of the provider or prejudice the interest of any residents. 4
2160	2162		(5) Any plans or proposals that any acquiring person has to liquidate the provider, 5
2161	2163		or any continuing care retirement community operated by the provider in this 6
2162	2164		State, sell its assets or consolidate or merge it with any person, or to make any 7
2163	2165		other material change in its business or corporate structure or management, 8
2164	2166		are fair and reasonable to residents and in the public interest. 9
2165	2167		(6) The competence, experience, and integrity of those persons who would 10
2166	2168		control the operation of the provider are such that the change of control will 11
2167	2169		not harm the interests of residents or of the public. 12
2168	2170		(e) A provider shall give written notice to all affected residents and depositors of the 13
2169	2171		proposed merger or other acquisition of control within 10 business days after the acquiring person 14
2170	2172		has received approval from the Commissioner. 15
2171	2173		(f) The Commissioner may revoke or restrict the license or certificate of a provider or 16
2172	2174		take other administrative action pursuant to Part 12 of this Article if a provider violates the 17
2173	2175		provisions of this section. 18
2174	2176		"§ 58-64A-240. Third-party management. 19
2175	2177		(a) A provider shall request the approval of the Commissioner before entering into a 20
2176	2178		contract with a third party for the management of a continuing care retirement community. The 21
2177	2179		request for approval required by this section shall include a copy of the proposed management 22
2178	2180		contract, the information required by subdivisions (6) and (7) of G.S. 58-64A-150(a) regarding 23
2179	2181		the proposed third-party manager, a description of the third party's experience in managing 24
2180	2182		continuing care retirement communities, and the reason for the change in management. 25
2181	2183		(b) The provider shall inform all residents in writing of the request for approval submitted 26
2182	2184		to the Commissioner pursuant to this section within 10 business days after the request for 27
2183	2185		approval is submitted to the Commissioner. 28
2184	2186		(c) The Commissioner shall comply with the review schedule in G.S. 58-64A-70 in 29
2185	2187		response to a request for approval pursuant to this section. 30
2186	2188		(d) The Commissioner may disapprove of the request for approval if the Commissioner 31
2187	2189		determines either of the following: 32
2188	2190		(1) The proposed third-party manager is incompetent or untrustworthy or so 33
2189	2191		lacking in managerial experience as to make the operation of the continuing 34
2190	2192		care retirement community potentially hazardous to residents. 35
2191	2193		(2) The proposed third-party manager is affiliated directly or indirectly through 36
2192	2194		ownership, control, or business relations with any person or persons whose 37
2193	2195		business operations are or have been marked by manipulation of assets or 38
2194	2196		accounts or by bad faith, to the detriment of residents, members, stockholders, 39
2195	2197		investors, creditors, or the public. 40
2196	2198		(e) The provider shall remove any third-party manager immediately upon discovery of 41
2197	2199		either of the following: 42
2198	2200		(1) That a manager has been convicted of any felony or pleaded nolo contendere 43
2199	2201		to a felony charge or has been held liable or enjoined in a civil action by final 44
2200	2202		judgment involving fraud, embezzlement, fraudulent conversion, or 45
2201	2203		misappropriation of property. 46
2202	2204		(2) That a manager is now, or was in the past, affiliated directly or indirectly 47
2203	2205		through ownership interest of ten percent (10%) or more in, or control of, any 48
2204	2206		business, corporation, or other entity that has been convicted of any felony or 49
2205	2207		pleaded nolo contendere to a felony charge or has been held liable or enjoined 50 General Assembly Of North Carolina Session 2025
2206		-	Page 44 House Bill 357-~~Second~~ Edition
	2208	+	Page 44 House Bill 357-First Edition
2207	2209		in a civil action by final judgment involving fraud, embezzlement, fraudulent 1
2208	2210		conversion, or misappropriation of property. 2
2209	2211		"Part 11. Operating Reserve. 3
2210	2212		"§ 58-64A-245. Operating reserve requirement. 4
2211	2213		(a) A provider shall maintain after the opening of a continuing care retirement 5
2212	2214		community an operating reserve equal to fifty percent (50%) of the total operating costs of the 6
2213	2215		continuing care retirement community forecasted or projected for the 12-month period following 7
2214	2216		the period covered by the most recent disclosure statement filed with the Department. 8
2215	2217		(b) Once a continuing care retirement community achieves a 12-month daily average 9
2216	2218		independent living unit occupancy rate of ninety percent (90%) or higher, a provider shall only 10
2217	2219		be required to maintain an operating reserve in an amount calculated using the table below, unless 11
2218	2220		otherwise instructed by the Commissioner: 12
2219	2221		12-Month Daily Average Operating Reserve Requirement as a Percentage 13
2220	2222		Independent Living Unit of Total Operating Costs of the Continuing Care 14
2221	2223		Occupancy Rate Retirement Community 15
2222	2224		90% or above..................................................................................................................... 25.00% 16
2223	2225		86% to 89.9% .................................................................................................................... 31.25% 17
2224	2226		83% to 85.9% .................................................................................................................... 37.50% 18
2225	2227		80% to 82.9% .................................................................................................................... 43.75% 19
2226	2228		Below 80% ........................................................................................................................ 50.00% 20
2227	2229		(c) A provider who has a 12-month daily average independent living unit occupancy rate 21
2228	2230		equal to or in excess of ninety-three percent (93%) and has no long-term debt or a debt service 22
2229	2231		coverage ratio in excess of 2.00 as of the provider's most recent fiscal year-end shall only be 23
2230	2232		required to maintain an operating reserve equal to twelve and one-half percent (12.5%) of total 24
2231	2233		operating costs of the continuing care retirement community, unless otherwise instructed by the 25
2232	2234		Commissioner. 26
2233	2235		(d) The Commissioner may increase the amount a provider is required to maintain as its 27
2234	2236		operating reserve, not to exceed fifty percent (50%) of total operating costs as calculated in 28
2235	2237		accordance with G.S. 58-64A-250, for a continuing care retirement community operated by the 29
2236	2238		provider or require that a provider immediately place the operating reserve on deposit with the 30
2237	2239		Commissioner if the Commissioner has determined that the provider is in a hazardous condition 31
2238	2240		pursuant to G.S. 58-64A-285. 32
2239	2241		(e) A provider shall notify all residents in writing within 10 business days if the 33
2240	2242		Commissioner, pursuant to subsection (d) of this section, increases the amount a provider is 34
2241	2243		required to maintain as its operating reserve for a continuing care retirement community operated 35
2242	2244		by the provider or requires the operating reserve to be placed on deposit with the Commissioner. 36
2243	2245		(f) If the Commissioner requires a provider to place an operating reserve on deposit with 37
2244	2246		the Commissioner, the provider shall at the same time deliver to the Commissioner a power of 38
2245	2247		attorney executed by the provider's president and secretary, or other proper person or persons, 39
2246	2248		authorizing the sale or transfer of said qualifying assets, or any part, for the purpose of paying 40
2247	2249		any of the liabilities of the provider related to the continuing care retirement community for 41
2248	2250		which the operating reserve is maintained. 42
2249	2251		"§ 58-64A-250. Operating reserve calculation. 43
2250	2252		(a) The five-year prospective financial statements as required by 44
2251	2253		G.S. 58-64A-150(a)(37), together with the 12-month daily average independent living unit 45
2252	2254		occupancy rate of the continuing care retirement community, shall serve as the basis for 46
2253	2255		computing the operating reserve. A provider shall calculate and adjust, if necessary, the required 47
2254	2256		operating reserve on at least a semiannual basis, including the date the operating reserve is 48
2255	2257		certified in accordance with G.S. 58-64A-270. 49
2256	2258		(b) In addition to total operating expenses, total operating costs will include debt service, 50
2257	2259		consisting of principal and interest payments, along with taxes and insurance on any mortgage 51 General Assembly Of North Carolina Session 2025
2258		-	House Bill 357-~~Second~~ Edition Page 45
	2260	+	House Bill 357-First Edition Page 45
2259	2261		loan or other long-term financing, but will exclude depreciation, amortized expenses, and 1
2260	2262		extraordinary items as approved by the Commissioner. If the debt service portion is accounted 2
2261	2263		for by way of another reserve account, the debt service portion may be excluded upon satisfactory 3
2262	2264		evidence of the existence and purpose of the other reserve account. 4
2263	2265		(c) A provider shall apply in writing for a determination by the Commissioner in order 5
2264	2266		to exclude extraordinary items from total operating costs and shall provide documentation to 6
2265	2267		support the request. The Commissioner shall comply with the review schedule in G.S. 58-64A-70 7
2266	2268		in response to a request for approval pursuant to this subsection. 8
2267	2269		(d) For providers that have voluntarily and permanently discontinued entering into 9
2268	2270		continuing care contracts, or who operate a continuing care retirement community where not all 10
2269	2271		occupants are under continuing care contracts, the Commissioner may allow a reduced operating 11
2270	2272		reserve if the Commissioner finds that the reduction is consistent with the financial protections 12
2271	2273		imposed by this Article. In making this determination, the Commissioner may consider factors 13
2272	2274		including the financial condition of the provider, the number of outstanding continuing care 14
2273	2275		contracts, the ratio of persons under continuing care contracts to those persons who do not hold 15
2274	2276		a continuing care contract, and the 12-month daily average independent living unit occupancy 16
2275	2277		rate. 17
2276	2278		(e) A provider who has increased the number of independent living units available at a 18
2277	2279		continuing care retirement community in excess of twenty percent (20%) shall be allowed to 19
2278	2280		exclude the total number of independent living units in the expansion project for a period of 18 20
2279	2281		months after the independent living units become available for occupancy when computing the 21
2280	2282		operating reserve required by this Part. 22
2281	2283		(f) The Commissioner may allow a different calculation for a provider's required 23
2282	2284		operating reserve for a continuing care retirement community operated by the provider if the 24
2283	2285		calculation, in the opinion of the Commissioner, does not diminish the residents' protections 25
2284	2286		provided for by this Part. 26
2285	2287		"§ 58-64A-255. Qualifying assets. 27
2286	2288		(a) A provider shall fund its operating reserve with any of the following qualifying assets: 28
2287	2289		(1) Cash. 29
2288	2290		(2) Cash equivalents. 30
2289	2291		(3) Investment grade securities. For the purposes of this subdivision, investment 31
2290	2292		grade securities are any of the following: 32
2291	2293		a. Securities issued or directly and fully guaranteed or insured by the 33
2292	2294		government of the United States of America or any of its agencies or 34
2293	2295		instrumentalities. 35
2294	2296		b. Debt securities or debt instruments with a rating of BBB- or higher by 36
2295	2297		Standard & Poor's or Baa3 or higher by Moody's, or, if no rating of 37
2296	2298		Standard & Poor's or Moody's then exists, the equivalent of that rating 38
2297	2299		by any other nationally recognized statistical rating organizations 39
2298	2300		maintained by the National Association of Insurance Commissioners. 40
2299	2301		c. Investments in any fund that invests exclusively in investments of the 41
2300	2302		type described in sub-subdivision a. or b. of this subdivision, which 42
2301	2303		fund may also hold immaterial amounts of cash pending investment or 43
2302	2304		distribution. 44
2303	2305		(4) Corporate stock that is traded on a public securities exchange that can be 45
2304	2306		readily valued and liquidated for cash, including shares in mutual funds and 46
2305	2307		exchange-traded funds that hold portfolios consisting predominantly of these 47
2306	2308		stocks. 48
2307	2309		(5) Other assets considered to be acceptable to the Commissioner on a 49
2308	2310		case-by-case basis. 50 General Assembly Of North Carolina Session 2025
2309		-	Page 46 House Bill 357-~~Second~~ Edition
	2311	+	Page 46 House Bill 357-First Edition
2310	2312		(b) Except as otherwise provided in this subsection, the assets maintained by the provider 1
2311	2313		as an operating reserve for a continuing care retirement community operated by the provider 2
2312	2314		under this Article shall not be subject to any liens, charges, judgments, garnishments, or creditors' 3
2313	2315		claims and shall not be hypothecated, pledged as collateral, or otherwise encumbered in any 4
2314	2316		manner. A provider may encumber assets held as an operating reserve as part of a security pledge 5
2315	2317		of assets or similar collateralization that is part of the provider's debt financing and is included 6
2316	2318		in the provider's debt indenture security instruments related thereto or other similar instrument. 7
2317	2319		(c) For the purpose of calculating the amount to be maintained by the provider to satisfy 8
2318	2320		its operating reserve requirement, all qualifying assets shall be valued at their current fair market 9
2319	2321		value. 10
2320	2322		"§ 58-64A-260. Surety bond; letter of credit. 11
2321	2323		(a) Alternative Funding Methods. – In lieu of funding the operating reserve with 12
2322	2324		qualifying assets as set forth in G.S. 58-64A-255, a provider may fund all or a portion of the 13
2323	2325		operating reserve required by this Part by filing with the Commissioner a surety bond or letter of 14
2324	2326		credit as set forth in this section. 15
2325	2327		(b) Surety Bond. – A surety bond shall be in a form acceptable to the Commissioner and 16
2326	2328		issued by an insurer authorized by the Commissioner to write surety business in this State. All of 17
2327	2329		the following shall apply to surety bonds issued pursuant to this Article: 18
2328	2330		(1) The surety bond may be exchanged or replaced with another surety bond if (i) 19
2329	2331		the surety bond applies to obligations and liabilities that arose during the 20
2330	2332		period of the original surety bond, (ii) the surety bond meets the requirements 21
2331	2333		of this section, and (iii) 90 days' advance written notice is provided to the 22
2332	2334		Commissioner. 23
2333	2335		(2) Notice of cancellation or nonrenewal of the surety bond required by this 24
2334	2336		section shall be provided to the provider and the Commissioner in writing at 25
2335	2337		least 45 days before cancellation or nonrenewal. 26
2336	2338		(3) A surety bond may be canceled by the issuer of the bond with respect to future 27
2337	2339		obligations or liabilities upon proper notice pursuant to this section and 28
2338	2340		without regard to approval or acceptance of the Commissioner. 29
2339	2341		(c) Letter of Credit. – A provider may file a clean, irrevocable, unconditional letter of 30
2340	2342		credit issued or confirmed by a qualified United States financial institution as defined in 31
2341	2343		G.S. 58-7-26(b) naming the Commissioner as beneficiary. The terms of the letter of credit shall 32
2342	2344		be approved by the Commissioner before issuance and before its renewal or modification. The 33
2343	2345		letter of credit shall provide all of the following information: 34
2344	2346		(1) Ninety days' prior written notice to both the provider and the Commissioner 35
2345	2347		of the financial institution's determination not to renew or extend the term of 36
2346	2348		the letter of credit. 37
2347	2349		(2) Unless otherwise arranged by the provider to the satisfaction of the 38
2348	2350		Commissioner, deposit by the financial institution of letter of credit funds in 39
2349	2351		an account designated by the Commissioner no later than 30 days before the 40
2350	2352		expiration of the letter of credit. 41
2351	2353		(3) Deposit by the financial institution of letter of credit funds in an account 42
2352	2354		designated by the Commissioner within five business days following written 43
2353	2355		instructions from the Commissioner that, in the sole judgment of the 44
2354	2356		Commissioner, funding of the operating reserve is required. 45
2355	2357		"§ 58-64A-265. Operating reserve release. 46
2356	2358		(a) An operating reserve shall only be released, in whole or in part, upon the submittal of 47
2357	2359		a detailed request from the provider and approval of that request by the Commissioner. This 48
2358	2360		request shall be submitted in writing for the Commissioner to review at least 10 business days 49
2359	2361		prior to the proposed date of release. 50 General Assembly Of North Carolina Session 2025
2360		-	House Bill 357-~~Second~~ Edition Page 47
	2362	+	House Bill 357-First Edition Page 47
2361	2363		(b) In order to receive the approval of the Commissioner, a provider shall explain why a 1
2362	2364		release is necessary and, if applicable, submit a repayment schedule to replenish the operating 2
2363	2365		reserve to the amount required by G.S. 58-64A-245. Within five business days after the date a 3
2364	2366		request is deemed complete, the Commissioner shall provide the provider with a written notice 4
2365	2367		of approval or disapproval of the request. The Commissioner may disapprove any request to 5
2366	2368		release the funds if it is determined that the release is not in the best interest of residents. 6
2367	2369		(c) A provider shall give written notice to residents of any request made pursuant to 7
2368	2370		subsection (a) of this section at the same time the written request is submitted to the 8
2369	2371		Commissioner. 9
2370	2372		"§ 58-64A-270. Operating reserve certification. 10
2371	2373		At the time a provider files its annual audited financial statements pursuant to 11
2372	2374		G.S. 58-64A-195, a provider shall file a form acceptable to the Commissioner computing, 12
2373	2375		reporting, and certifying all of the following: 13
2374	2376		(1) The 12-month daily average independent living unit occupancy rate at the 14
2375	2377		continuing care retirement community, or a shorter period of time that the 15
2376	2378		continuing care retirement community has been in operation, as of the date of 16
2377	2379		certification. 17
2378	2380		(2) The amount the provider is required to hold as its operating reserve. 18
2379	2381		(3) A description of the qualifying assets or other form of security and, if 19
2380	2382		applicable, their respective values, as defined and valued in accordance with 20
2381	2383		G.S. 58-64A-255, that the provider maintains for its operating reserve. 21
2382	2384		"Part 12. Offenses and Penalties. 22
2383	2385		"§ 58-64A-275. Definition of impairment. 23
2384	2386		As used is this Part, "impaired" means a weakened financial state or condition that may affect 24
2385	2387		a provider's ability to pay its obligations as they come due in the normal course of business. 25
2386	2388		"§ 58-64A-280. Grounds for discretionary refusal, restriction, or revocation of a permit, 26
2387	2389		certificate, or license. 27
2388	2390		(a) The Commissioner may (i) deny an application or any other request for approval or 28
2389	2391		(ii) restrict or revoke any permit, certificate, license, or other authorization issued under this 29
2390	2392		Article if the Commissioner finds that the applicant or provider did any of the following: 30
2391	2393		(1) Willfully violated any provision of this Article or of any rule or order of the 31
2392	2394		Commissioner. 32
2393	2395		(2) Made a material omission, misstatement, or misrepresentation, or committed 33
2394	2396		fraud in obtaining a permit, certificate, license, or other authorization. 34
2395	2397		(3) Engaged in any fraudulent or dishonest practices in the conduct of its business. 35
2396	2398		(4) Misappropriated, converted, or improperly withheld any monies. 36
2397	2399		(5) Failed to file an annual disclosure statement, annual audited financial 37
2398	2400		statements, or any other materials requested by the Commissioner or 38
2399	2401		otherwise required by this Article. 39
2400	2402		(6) Failed to deliver to prospective residents a disclosure statement as required by 40
2401	2403		this Article. 41
2402	2404		(7) Delivered to prospective residents a disclosure statement that makes a material 42
2403	2405		misstatement or omits a material fact and the provider, at the time of the 43
2404	2406		delivery of the disclosure statement, had actual knowledge of the misstatement 44
2405	2407		or omission. 45
2406	2408		(8) Failed to make a revised disclosure statement available to residents. 46
2407	2409		(9) Made any material misrepresentations to depositors, prospective residents, or 47
2408	2410		residents of a continuing care retirement community operated or to be 48
2409	2411		operated in this State. 49
2410	2412		(10) Failed to maintain the escrow account required under this Article or released 50
2411	2413		a portion of an escrow account required to be maintained under this Article. 51 General Assembly Of North Carolina Session 2025
2412		-	Page 48 House Bill 357-~~Second~~ Edition
	2414	+	Page 48 House Bill 357-First Edition
2413	2415		(11) Failed to deposit entrance fees and deposits into an escrow account as required 1
2414	2416		by this Article. 2
2415	2417		(12) Failed to maintain the operating reserve required under this Article or released 3
2416	2418		a portion of the operating reserve required to be maintained under this Article 4
2417	2419		without Commissioner approval. 5
2418	2420		(13) Violated a restriction of its permit, certificate, or license. 6
2419	2421		(14) After request by the Commissioner for an investigation or examination, 7
2420	2422		refused access to records or information; refused to be investigated or 8
2421	2423		examined or to produce its accounts, records, and files for an investigation or 9
2422	2424		examination; refused to give information with respect to its affairs; or refused 10
2423	2425		to perform any other legal obligations related to an investigation or 11
2424	2426		examination. 12
2425	2427		(15) Failed to fulfill obligations under continuing care and continuing care at home 13
2426	2428		contracts. 14
2427	2429		(16) Violated the provisions of G.S. 58-64A-230, 58-64A-235, or 58-64A-240. 15
2428	2430		(17) Failed to comply with the terms of a cease and desist order. 16
2429	2431		(18) Has been determined by the Commissioner to be in a hazardous condition. 17
2430	2432		(b) Findings of fact in support of a denial, restriction, or revocation shall be accompanied 18
2431	2433		by an explicit statement of the Commissioner's understanding of the underlying facts supporting 19
2432	2434		the findings. 20
2433	2435		(c) If the Commissioner has good cause to believe that a provider has committed a 21
2434	2436		violation for which revocation could be ordered, the Commissioner may first issue a cease and 22
2435	2437		desist order. If the cease and desist order is not or cannot be effective in remedying the violation, 23
2436	2438		the Commissioner may, after notice and hearing, order that a permit, certificate, or license be 24
2437	2439		revoked. That revocation order may be appealed to the Superior Court of Wake County in the 25
2438	2440		manner provided by G.S. 58-63-35. The provider shall accept no new deposits or entrance fees 26
2439	2441		while the revocation order is under appeal. 27
2440	2442		(d) If the Commissioner issues a cease and desist order or restricts or revokes a provider's 28
2441	2443		permit, certificate, or license, the provider shall notify all residents and depositors of the cease 29
2442	2444		and desist order, restriction, or revocation within five business days. 30
2443	2445		(e) The Commissioner may, upon finding of changed circumstances, remove a 31
2444	2446		restriction. 32
2445	2447		(f) The revocation by the Commissioner of a certificate or license shall not release the 33
2446	2448		provider from obligations assumed through continuing care and continuing care at home 34
2447	2449		contracts. 35
2448	2450		(g) Within 20 business days after receiving a notice of revocation of a license, a provider 36
2449	2451		shall provide to the Commissioner and all residents a written plan detailing specifically how the 37
2450	2452		provider intends to continue to meet its continuing care obligations. 38
2451	2453		(h) A provider who has their permanent license revoked shall continue to maintain an 39
2452	2454		operating reserve and to file its annual audited financial statements, annual disclosure statement, 40
2453	2455		and pay annual fees to the Commissioner as required under this Article as if the permanent license 41
2454	2456		had continued in full force, but the provider shall not issue any new continuing care or continuing 42
2455	2457		care at home contracts. 43
2456	2458		(i) A provider who has a permit, certificate, or license revoked shall provide written 44
2457	2459		notice within five business days to all depositors, shall reimburse all deposits collected, and shall 45
2458	2460		provide documentation to the Commissioner verifying that all deposits have been returned to 46
2459	2461		depositors. 47
2460	2462		"§ 58-64A-285. Hazardous condition. 48
2461	2463		The Commissioner may consider any of the following standards to determine whether a 49
2462	2464		provider is in a hazardous condition: 50
2463	2465		(1) Whether the provider is impaired or insolvent. 51 General Assembly Of North Carolina Session 2025
2464		-	House Bill 357-~~Second~~ Edition Page 49
	2466	+	House Bill 357-First Edition Page 49
2465	2467		(2) Adverse findings reported in examination reports, audit financial statements, 1
2466	2468		and actuarial opinions, reports, or summaries. 2
2467	2469		(3) Whether the provider has failed to establish, maintain, or has substantially 3
2468	2470		depleted the operating reserve required by this Article. 4
2469	2471		(4) Whether the provider is contractually past due on entrance fee refunds. 5
2470	2472		(5) The age and collectability of receivables. 6
2471	2473		(6) Whether a related party is impaired, insolvent, bankrupt, or threatened with 7
2472	2474		insolvency or bankruptcy, or delinquent in payment of its monetary or any 8
2473	2475		other obligations and which in the opinion of the Commissioner may affect 9
2474	2476		the solvency of the provider. 10
2475	2477		(7) Whether the provider, or any obligated group that the provider is a part of, is 11
2476	2478		not in compliance with any covenant contained in any debt agreement. 12
2477	2479		(8) Whether the provider is aware of any existing circumstances which would 13
2478	2480		hinder or cause the provider, or any member of an obligated group that the 14
2479	2481		applicant or provider is a part of, to not be able to perform on any debt 15
2480	2482		agreement. 16
2481	2483		(9) Contingent liabilities, pledges, or guaranties that either individually or 17
2482	2484		collectively involve a total amount that in the Commissioner's opinion may 18
2483	2485		affect a provider's solvency. 19
2484	2486		(10) Whether the management of a provider, including officers, directors, or any 20
2485	2487		other person who directly or indirectly controls the operations of an applicant, 21
2486	2488		provider, or continuing care retirement community, fails to possess and 22
2487	2489		demonstrate the competence, experience, or integrity considered by the 23
2488	2490		Commissioner to be necessary to serve the provider or continuing care 24
2489	2491		retirement community in that position. 25
2490	2492		(11) Whether the management of a provider has failed to respond to the 26
2491	2493		Commissioner's inquiries about the condition of the applicant or provider or 27
2492	2494		has furnished false and misleading information in response to an inquiry by 28
2493	2495		the Commissioner. 29
2494	2496		(12) Whether the applicant or provider has failed to meet financial, disclosure 30
2495	2497		statement, or other filing requirements in the absence of a reason satisfactory 31
2496	2498		to the Commissioner. 32
2497	2499		(13) Whether the management of an applicant or provider has filed any false or 33
2498	2500		misleading financial statement, has released a false or misleading financial 34
2499	2501		statement to a lending institution or to the general public, or has made a false 35
2500	2502		or misleading entry or omitted an entry of material amount in the applicant's 36
2501	2503		or provider's books. 37
2502	2504		(14) Whether the applicant or provider has experienced or will experience in the 38
2503	2505		foreseeable future cash flow or liquidity problems. 39
2504	2506		(15) Any other finding determined by the Commissioner to be hazardous to the 40
2505	2507		applicant's or provider's depositors, residents, creditors, or the general public. 41
2506	2508		"§ 58-64A-290. Corrective action plan. 42
2507	2509		(a) If the Commissioner has determined that a provider is in a hazardous condition, the 43
2508	2510		Commissioner may, in lieu of taking action under G.S. 58-64A-280 or G.S. 58-64A-335, and 44
2509	2511		after notice and opportunity for hearing, issue an order requiring a provider to (i) submit a 45
2510	2512		corrective action plan within 45 days and (ii) notify all residents and depositors within five 46
2511	2513		business days of the Commissioner's order. The corrective action plan shall include both of the 47
2512	2514		following: 48
2513	2515		(1) Proposals of corrective actions the provider intends to take which would be 49
2514	2516		expected to result in the elimination of the hazardous condition. 50 General Assembly Of North Carolina Session 2025
2515		-	Page 50 House Bill 357-~~Second~~ Edition
	2517	+	Page 50 House Bill 357-First Edition
2516	2518		(2) A date when the provider anticipates it will rectify the problems and 1
2517	2519		deficiencies identified by the Commissioner. 2
2518	2520		(b) Within 45 days after the submittal of a corrective action plan, the Commissioner shall 3
2519	2521		notify the provider whether the corrective action plan shall be implemented or is, in the judgment 4
2520	2522		of the Commissioner, unsatisfactory. If the Commissioner determines the corrective action plan 5
2521	2523		is unsatisfactory, the notification to the provider shall set forth the reasons for the determination 6
2522	2524		and may set forth proposed revisions that will render the corrective action plan satisfactory in the 7
2523	2525		judgment of the Commissioner. After receiving notification from the Commissioner, the provider 8
2524	2526		shall prepare a revised corrective action plan, if applicable, which may incorporate by reference 9
2525	2527		any revisions proposed by the Commissioner and shall submit the revised corrective action plan 10
2526	2528		to the Commissioner within 30 days after notification from the Commissioner. If the corrective 11
2527	2529		action plan is approved, the provider shall immediately implement the corrective action plan, 12
2528	2530		distribute a copy of the plan to all residents and depositors, and begin reporting to the 13
2529	2531		Commissioner on the implementation and progress of the corrective action plan in accordance 14
2530	2532		with a schedule and in a format established by the Commissioner. Each report shall also be 15
2531	2533		distributed to all residents and depositors at the time the report is submitted to the Commissioner. 16
2532	2534		(c) If the corrective action plan is disapproved, or if a corrective action plan is not 17
2533	2535		submitted, the Commissioner may engage consultants to develop a corrective action plan. After 18
2534	2536		the corrective action plan is developed, the Commissioner shall direct the provider to implement 19
2535	2537		the corrective action plan and to distribute a copy of the corrective action plan to all residents 20
2536	2538		and depositors. Expenses incurred by the Commissioner to engage consultants shall be paid by 21
2537	2539		the provider. 22
2538	2540		(d) This section shall not be construed to delay or prevent the Commissioner from taking 23
2539	2541		any regulatory measures deemed necessary regarding the provider. 24
2540	2542		(e) The provider shall distribute its approved corrective action plan and its most recent 25
2541	2543		report to the Commissioner to a prospective resident at the time the provider distributes its current 26
2542	2544		disclosure statement pursuant to G.S. 58-64A-155. Subsections (b) and (c) of G.S. 58-64A-155 27
2543	2545		shall apply to the corrective action plan and the most recent report to the Commissioner required 28
2544	2546		to be distributed pursuant to this subsection. 29
2545	2547		"§ 58-64A-295. Investigations and subpoenas. 30
2546	2548		(a) The Commissioner may make public or private investigations within or outside of this 31
2547	2549		State as necessary to (i) determine whether any person has violated or is about to violate any 32
2548	2550		provision of this Article, (ii) aid in the enforcement of this Article, or (iii) verify statements 33
2549	2551		contained in any disclosure statement or other filing filed or delivered under this Article. 34
2550	2552		(b) For the purpose of any investigation or proceeding under this Article, the 35
2551	2553		Commissioner may require or permit any person to file a statement in writing, under oath or 36
2552	2554		otherwise, as to any of the facts and circumstances concerning the matter to be investigated. 37
2553	2555		(c) For the purpose of any investigation or proceeding under this Article, the 38
2554	2556		Commissioner or the Commissioner's designee may exercise all powers granted to the 39
2555	2557		Commissioner with respect to insurance companies. 40
2556	2558		"§ 58-64A-300. Civil liability. 41
2557	2559		(a) A provider who enters into a binding reservation agreement, continuing care contract, 42
2558	2560		or continuing care at home contract under this Article without having first delivered a disclosure 43
2559	2561		statement meeting the requirements of Part 5 of this Article to the person with whom the binding 44
2560	2562		reservation agreement, continuing care contract, or continuing care at home contract was entered 45
2561	2563		into, or enters into a binding reservation agreement, continuing care contract, or continuing care 46
2562	2564		at home contract with a person who has relied on a disclosure statement that materially 47
2563	2565		misrepresents or omits to state a material fact required to be stated therein or necessary in order 48
2564	2566		to make the statements made therein, in light of the circumstances under which they are made, 49
2565	2567		not misleading, shall be liable to that person for actual damages and repayment of all fees paid 50
2566	2568		to the provider violating this Article, less the costs of care, services, and housing provided to the 51 General Assembly Of North Carolina Session 2025
2567		-	House Bill 357-~~Second~~ Edition Page 51
	2569	+	House Bill 357-First Edition Page 51
2568	2570		resident by or on whose behalf the binding reservation agreement, continuing care contract, or 1
2569	2571		continuing care at home contract was entered into prior to discovery of the violation, 2
2570	2572		misstatement, or omission or the time the violation, misstatement, or omission should reasonably 3
2571	2573		have been discovered, together with interest thereon at the legal rate for judgments, and court 4
2572	2574		costs and reasonable attorneys' fees. 5
2573	2575		(b) Liability under this section exists regardless of whether the provider had actual 6
2574	2576		knowledge of the misstatement or omission. 7
2575	2577		(c) A person may not file or maintain an action under this section if the person, before 8
2576	2578		filing the action, received a written offer of a refund of all amounts paid to the provider, together 9
2577	2579		with interest at the rate established monthly by the Commissioner of Banks pursuant to 10
2578	2580		G.S. 24-1.1(c), less the cost of care, services, and housing provided prior to receipt of the offer, 11
2579	2581		and if the offer recited the provisions of this section and the recipient of the offer failed to accept 12
2580	2582		it within 30 days of actual receipt. 13
2581	2583		(d) An action may not be maintained to enforce a liability created under this Article unless 14
2582	2584		brought before the expiration of three years after the alleged violation. 15
2583	2585		"§ 58-64A-305. Criminal penalties. 16
2584	2586		(a) Any person who willfully and knowingly violates any provision of this Article is 17
2585	2587		guilty of a Class 1 misdemeanor. The Commissioner may refer any available evidence concerning 18
2586	2588		a violation of this Article, or of any rule adopted or order issued pursuant to this Article, to the 19
2587	2589		Attorney General or a district attorney. The Attorney General or a district attorney may institute 20
2588	2590		the appropriate criminal proceedings under this Article, with or without evidentiary referral from 21
2589	2591		the Commissioner. Nothing in this Article limits the power of the State to punish any person for 22
2590	2592		any conduct that constitutes a crime under any other statute. 23
2591	2593		(b) Any action brought against any person shall not abate by reason of a sale or other 24
2592	2594		transfer of ownership of the continuing care retirement community except with the express 25
2593	2595		written consent of the Commissioner. 26
2594	2596		"§ 58-64A-310. Forfeiture. 27
2595	2597		(a) A permit, certificate, license, or other approval issued by the Commissioner pursuant 28
2596	2598		to this Article shall be forfeited, after notice and opportunity for hearing, when any one of the 29
2597	2599		following occurs: 30
2598	2600		(1) The provider terminates marketing a proposed continuing care retirement 31
2599	2601		community. 32
2600	2602		(2) The provider surrenders to the Commissioner its permit, certificate, or license. 33
2601	2603		(3) The provider sells or otherwise transfers all or part of a continuing care 34
2602	2604		retirement community without the Commissioner's approval in accordance 35
2603	2605		with G.S. 58-64A-230. 36
2604	2606		(4) A change occurs in the control of the provider without the Commissioner's 37
2605	2607		approval in accordance with G.S. 58-64A-235. 38
2606	2608		(5) The provider merges with another person without the Commissioner's 39
2607	2609		approval in accordance with G.S. 58-64A-235. 40
2608	2610		(6) The provider moves the continuing care retirement community from one 41
2609	2611		location to another without the Commissioner's prior approval. 42
2610	2612		(7) The provider abandons the continuing care retirement community or its 43
2611	2613		obligations under continuing care and continuing care at home contracts. 44
2612	2614		(8) The provider is evicted from the structures that make up the continuing care 45
2613	2615		retirement community. 46
2614	2616		(9) The provider closes a continuing care retirement community. 47
2615	2617		(b) The provider shall notify all residents and depositors within five business days after 48
2616	2618		a forfeiture of a permit, certificate, or license. 49
2617	2619		"§ 58-64A-315. Remedies available in cases of unlawful contracting. 50 General Assembly Of North Carolina Session 2025
2618		-	Page 52 House Bill 357-~~Second~~ Edition
	2620	+	Page 52 House Bill 357-First Edition
2619	2621		(a) If the Commissioner determines that a provider is or has been violating the provisions 1
2620	2622		of this Article, the Commissioner may, after notice and opportunity for hearing, order the 2
2621	2623		provider to cease entering into binding reservation agreements, continuing care contracts, and 3
2622	2624		continuing care at home contracts and make a rescission offer to any resident or depositor who 4
2623	2625		entered into a binding reservation agreement, continuing care contract, or continuing care at 5
2624	2626		home contract while the provider was violating the provisions of this Article in accordance with 6
2625	2627		the provisions of this section. 7
2626	2628		(b) After the Commissioner issues an order pursuant to subsection (a) of this section, 8
2627	2629		every binding reservation agreement, continuing care contract, or continuing care at home 9
2628	2630		contract entered into in violation of this Article may be rescinded at the election of the resident 10
2629	2631		or depositor without penalty. 11
2630	2632		(c) No resident or depositor shall have the benefit of this section who, within 30 days of 12
2631	2633		receipt, has refused or failed to accept an offer made in writing by the provider to rescind the 13
2632	2634		binding reservation agreement, continuing care contract, or continuing care at home contract in 14
2633	2635		question and to refund the full amount paid by the resident or depositor with interest at the rate 15
2634	2636		established monthly by the Commissioner of Banks pursuant to G.S. 24-1.1(c) on the full amount 16
2635	2637		paid for the binding reservation agreement, continuing care contract, or continuing care at home 17
2636	2638		contract for the period from the date of payment by the depositor or resident to the date of 18
2637	2639		repayment, less the cost of care, services, and housing provided, if applicable, and the amount of 19
2638	2640		any costs specifically incurred by the provider at the request of the resident or depositor and set 20
2639	2641		forth in writing, signed by both parties to the binding reservation agreement, continuing care 21
2640	2642		contract, or continuing care at home contract. 22
2641	2643		"§ 58-64A-325. Nonexclusive remedies. 23
2642	2644		The civil, criminal, and administrative remedies available to the Commissioner pursuant to 24
2643	2645		this Article are not exclusive and may be sought and employed by the Commissioner, in any 25
2644	2646		combination, to enforce this Article. 26
2645	2647		"§ 58-64A-330. Soliciting or accepting new agreements or contracts by impaired or 27
2646	2648		insolvent providers. 28
2647	2649		Regardless of whether delinquency proceedings as to a provider have been or are to be 29
2648	2650		initiated, a provider may not actively solicit, approve the solicitation of, or enter into new binding 30
2649	2651		reservation agreements, continuing care contracts, or continuing care at home contracts in this 31
2650	2652		State after the provider knew, or reasonably should have known, that the provider was impaired 32
2651	2653		or insolvent except with the written permission of the Commissioner. The Commissioner shall 33
2652	2654		approve or disapprove the continued marketing of new binding reservation agreements, 34
2653	2655		continuing care contracts, and continuing care at home contracts within 15 days after receiving a 35
2654	2656		request from a provider. If the provider has declared bankruptcy, the bankruptcy court or trustee 36
2655	2657		appointed by the court has jurisdiction over those matters. 37
2656	2658		"Part 13. Delinquency Proceedings. 38
2657	2659		"§ 58-64A-335. Supervision, rehabilitation, and liquidation. 39
2658	2660		(a) The Commissioner may commence a supervision proceeding pursuant to Article 30 40
2659	2661		of this Chapter or may apply to the Superior Court of Wake County or to the federal bankruptcy 41
2660	2662		court that may have previously taken jurisdiction over the provider or continuing care retirement 42
2661	2663		community for an order directing the Commissioner or authorizing the Commissioner to 43
2662	2664		rehabilitate or liquidate a provider or continuing care retirement community in accordance with 44
2663	2665		Article 30 of this Chapter, if the Commissioner determines, after notice and an opportunity for 45
2664	2666		hearing, that any of the following apply: 46
2665	2667		(1) A portion of an escrow account or operating reserve required to be maintained 47
2666	2668		under this Article has been or is proposed to be released in violation of this 48
2667	2669		Article. 49 General Assembly Of North Carolina Session 2025
2668		-	House Bill 357-~~Second~~ Edition Page 53
	2670	+	House Bill 357-First Edition Page 53
2669	2671		(2) A provider has been or will be unable to fully perform its obligations pursuant 1
2670	2672		to continuing care and continuing care at home contracts, or to meet 2
2671	2673		prospective financial data previously filed by the provider. 3
2672	2674		(3) A provider has failed to maintain the escrow account required under this 4
2673	2675		Article. 5
2674	2676		(4) A provider is in a hazardous condition. 6
2675	2677		(5) A provider is bankrupt or insolvent, or in imminent danger of becoming 7
2676	2678		bankrupt or insolvent. 8
2677	2679		(b) If the Commissioner commences a supervision proceeding, the provider shall notify 9
2678	2680		all residents and depositors of the proceeding within five business days. 10
2679	2681		(c) If an order is issued directing or authorizing the Commissioner to rehabilitate or to 11
2680	2682		liquidate a provider or continuing care retirement community, the Commissioner shall notify all 12
2681	2683		affected residents and depositors of the rehabilitation or liquidation order within five business 13
2682	2684		days or as otherwise directed by the Court. 14
2683	2685		(d) If, at any time, the Court finds, upon petition of the Commissioner, a provider, or on 15
2684	2686		its own motion, that the objectives of an order to rehabilitate a provider have been accomplished 16
2685	2687		and that the continuing care retirement community or communities owned by, or operated by, 17
2686	2688		the provider can be returned to the provider's management without further jeopardy to the 18
2687	2689		residents or depositors of the continuing care retirement community or communities, the Court 19
2688	2690		may, upon a full report and accounting of the conduct of the provider's affairs during the 20
2689	2691		rehabilitation and of the provider's current financial condition, terminate the rehabilitation and, 21
2690	2692		by order, return the continuing care retirement community or communities owned by, or operated 22
2691	2693		by, the provider, along with the assets and affairs of the provider, to the provider's management. 23
2692	2694		(e) When applying for an order to rehabilitate or liquidate a provider, the Commissioner 24
2693	2695		shall give due consideration in the application to the manner in which the welfare of persons who 25
2694	2696		have contracted with the provider for continuing care may be best served. 26
2695	2697		(f) An order for rehabilitation shall be refused or vacated if the provider posts a bond, by 27
2696	2698		a recognized surety authorized to do business in this State and executed in favor of the 28
2697	2699		Commissioner on behalf of persons who may be found entitled to a refund of entrance fees and 29
2698	2700		deposits from the provider or other damages in the event the provider is unable to fulfill its 30
2699	2701		contracts to provide continuing care, in an amount determined by the Court to be equal to the 31
2700	2702		reserve funding that would otherwise need to be available to fulfill the provider's obligations. 32
2701	2703		(g) G.S. 58-30-12 shall not apply to providers under this Article. 33
2702	2704		"§ 58-64A-340. Receiverships; exception for long-term care facility beds. 34
2703	2705		When the Commissioner has been appointed as a receiver under Article 30 of this Chapter 35
2704	2706		for a provider or a continuing care retirement community subject to this Article, the Department 36
2705	2707		of Health and Human Services may, notwithstanding any other provision of law, accept and 37
2706	2708		approve the addition of adult care home beds or nursing beds for a continuing care retirement 38
2707	2709		community owned by, or operated by, the provider, if it appears to the Court, upon petition of 39
2708	2710		the Commissioner or the provider, or on the Court's own motion, that (i) the best interests of the 40
2709	2711		provider or (ii) the welfare of persons who have previously contracted with the provider or may 41
2710	2712		contract with the provider may be best served by the addition of adult care home beds or nursing 42
2711	2713		beds. 43
2712	2714		"§ 58-64A-345. Contracts as preferred claims in liquidation. 44
2713	2715		(a) In the event of liquidation of a provider, all continuing care and continuing care at 45
2714	2716		home contracts executed by the provider shall be deemed preferred claims against all assets 46
2715	2717		owned by the provider. 47
2716	2718		(b) Notwithstanding subsection (a) of this section, the claims of all continuing care and 48
2717	2719		continuing care at home contracts shall be subordinate to the liquidator's cost of administration 49
2718	2720		or any secured claim. 50
2719	2721		"Part 14. Residents' Rights to Organization and Semiannual Meetings. 51 General Assembly Of North Carolina Session 2025
2720		-	Page 54 House Bill 357-~~Second~~ Edition
	2722	+	Page 54 House Bill 357-First Edition
2721	2723		"§ 58-64A-350. Definition of residents' council. 1
2722	2724		As used is this Part, "residents' council" means a group duly elected by residents at a 2
2723	2725		continuing care retirement community to advocate for residents' rights and to serve as a liaison 3
2724	2726		between residents and the provider with respect to resident welfare and interests. 4
2725	2727		"§ 58-64A-355. Right to organization. 5
2726	2728		A resident living in a continuing care retirement community operated by a provider licensed 6
2727	2729		under this Article has the right of self-organization, the right to be represented by an individual 7
2728	2730		of the resident's own choosing, and the right to engage in concerted activities to keep informed 8
2729	2731		on the operation of the provider and the continuing care retirement community in which the 9
2730	2732		resident resides or for other mutual aid or protection. The right to organize includes the right to 10
2731	2733		establish a residents' council. 11
2732	2734		"§ 58-64A-360. Semiannual meetings. 12
2733	2735		(a) The board of directors or other governing body of a provider or its designated 13
2734	2736		representative shall hold in-person semiannual meetings with the residents of each continuing 14
2735	2737		care retirement community operated by the provider in this State for free discussions of subjects, 15
2736	2738		including, but not limited to, income, expenditures, financial trends and problems, and proposed 16
2737	2739		changes in policies, programs, and services as they apply to the provider, the continuing care 17
2738	2740		retirement community, and the continuing care retirement community's residents. For the 18
2739	2741		purposes of this section, a semiannual meeting shall be a single meeting that is open to all 19
2740	2742		residents and not a series of meetings with individual residents. Nothing in this section shall 20
2741	2743		prevent a provider from making a semiannual meeting available via electronic means to residents 21
2742	2744		of the continuing care retirement community who are unable to attend in person. 22
2743	2745		(b) At least one independent member of the board of directors or other governing body 23
2744	2746		of the provider shall attend the semiannual meetings in person. A provider may apply to the 24
2745	2747		Commissioner for a waiver from the requirement of this subsection based on unique 25
2746	2748		circumstances. 26
2747	2749		(c) Residents shall be entitled to at least seven days' advance notice of each meeting under 27
2748	2750		subsection (a) of this section. The agenda and any materials that are distributed at the meetings 28
2749	2751		shall remain available upon request to residents for at least 60 days after each semiannual 29
2750	2752		meeting. 30
2751	2753		(d) Whenever a state of emergency or disaster has been proclaimed in this State or for an 31
2752	2754		area within this State under G.S. 166A-19.20 or G.S. 166A-19.21, or whenever the President of 32
2753	2755		the United States has issued a major disaster declaration for the State or for an area within the 33
2754	2756		State under the Stafford Act, 42 U.S.C. § 5121, et seq., that directly affects the continuing care 34
2755	2757		retirement community, semiannual meetings required under this section may be held by 35
2756	2758		electronic means, including any of the following: 36
2757	2759		(1) Telephone. 37
2758	2760		(2) Video conference. 38
2759	2761		(3) Video broadcast. 39
2760	2762		(e) If a semiannual meeting is held under subsection (d) of this section, notice of the 40
2761	2763		method residents may use to attend the meeting shall be published with the notice of the meeting. 41
2762	2764		The meeting shall be recorded in the format in which it is conducted. Acceptable recording 42
2763	2765		formats include, but are not limited to, all of the following: 43
2764	2766		(1) A sound-only recording. 44
2765	2767		(2) A video recording with sound and picture. 45
2766	2768		(3) A digital or analog broadcast capable of being recorded. 46
2767	2769		(f) Recordings made pursuant to subsection (e) of this section shall remain available to 47
2768	2770		residents for at least 60 days after being made available to residents. 48
2769	2771		(g) A provider shall report in the disclosure statement required under G.S. 58-64A-150 49
2770	2772		the dates on which the semiannual meetings were held during the provider's previous fiscal year. 50
2771	2773		"Part 15. Miscellaneous Provisions. 51 General Assembly Of North Carolina Session 2025
2772		-	House Bill 357-~~Second~~ Edition Page 55
	2774	+	House Bill 357-First Edition Page 55
2773	2775		"§ 58-64A-365. Waiver of statutory protection. 1
2774	2776		No act, agreement, or statement of any resident, or of an individual purchasing continuing 2
2775	2777		care for a resident under any continuing care or continuing care at home contract shall constitute 3
2776	2778		a valid waiver of any provision of this Article intended for the benefit or protection of the resident 4
2777	2779		or the individual purchasing continuing care for the resident. 5
2778	2780		"§ 58-64A-370. Continuing Care Advisory Committee. 6
2779		-	(a) There shall be a 12-member Continuing Care Advisory Committee comprised of 7
2780		-	providers, residents, and professionals involved in the continuing care retirement community 8
2781		-	industry. The members shall be appointed as follows: 9
2782		-	(1) Six members appointed by the Commissioner as follows: 10
2783		-	a. Two residents of continuing care retirement communities. 11
2784		-	b. One owner of a continuing care retirement community. 12
2785		-	c. One provider of continuing care at a continuing care retirement 13
2786		-	community or one provider of a continuing care at home program. 14
2787		-	d. One person who, on account of his or her vocation, employment, or 15
2788		-	affiliation, can be classified as a representative of residents of 16
2789		-	continuing care retirement communities. 17
2790		-	e. One person who, on account of his or her vocation, employment, or 18
2791		-	affiliation, can be classified as a representative of continuing care 19
2792		-	retirement communities. 20
2793		-	(2) Three members appointed by the President Pro Tempore of the Senate as 21
2794		-	follows: 22
2795		-	a. One person who, on account of his or her vocation, employment, or 23
2796		-	affiliation, can be classified as a representative of residents of 24
2797		-	continuing care retirement communities. 25
2798		-	b. One person who, on account of his or her vocation, employment, or 26
2799		-	affiliation, can be classified as a representative of continuing care 27
2800		-	retirement communities. 28
2801		-	c. One person who is a certified public accountant and is licensed to 29
2802		-	practice public accountancy in this State. 30
2803		-	(3) Three members appointed by the Speaker of the House of Representatives as 31
2804		-	follows: 32
2805		-	a. One person who, on account of his or her vocation, employment, or 33
2806		-	affiliation, can be classified as a representative of residents of 34
2807		-	continuing care retirement communities. 35
2808		-	b. One person who, on account of his or her vocation, employment, or 36
2809		-	affiliation, can be classified as a representative of continuing care 37
2810		-	retirement communities. 38
2811		-	c. One person who is a certified public accountant and is licensed to 39
2812		-	practice public accountancy in this State. 40
2813		-	(b) The Committee shall meet all of the following requirements: 41
2814		-	(1) Meet at least twice per year. 42
2815		-	(2) Hold other meetings at times and places as the Committee chair may direct. 43
2816		-	(3) Act in an advisory capacity to the Commissioner on matters pertaining to the 44
2817		-	operation and regulation of continuing care retirement communities and 45
2818		-	continuing care at home programs. 46
2819		-	(4) Report to the Commissioner on developments in the continuing care 47
2820		-	retirement community industry, including continuing care at home and similar 48
2821		-	programs, and problems or concerns of providers and residents. 49
2822		-	(5) Recommend changes in relevant statutes and rules. 50 General Assembly Of North Carolina Session 2025
2823		-	Page 56 House Bill 357-Second Edition
2824		-	(c) The term of each Committee member shall be three years, but each Committee 1
2825		-	member shall serve until a successor has been appointed by the appointing authority. Committee 2
2826		-	members may serve two consecutive terms. Any appointment to fill a vacancy on the Committee 3
2827		-	created by resignation, dismissal, death, or disability of a member shall be for the remainder of 4
2828		-	the unexpired term and filled by the appointing authority. 5
2829		-	(d) Committee members shall serve without pay but shall be reimbursed for travel 6
2830		-	expenses by the Department at the rates set out in G.S. 138-6. 7
2831		-	"§ 58-64A-375. Other licensing or regulation. 8
2832		-	(a) Nothing in this Article affects the authority of the Department of Health and Human 9
2833		-	Services or any successor agency otherwise provided by law to license or regulate any long-term 10
2834		-	care facility. 11
2835		-	(b) Continuing care retirement communities and providers licensed under this Article that 12
2836		-	are also subject to the provisions of the North Carolina Condominium Act under Chapter 47C of 13
2837		-	the General Statutes shall not be subject to the provisions of Chapter 39A of the General Statutes, 14
2838		-	provided that the continuing care retirement community's declaration of condominium does not 15
2839		-	require the payment of any fee or charge not otherwise provided for in a resident's continuing 16
2840		-	care contract, or other separate contract for the provisions of membership or services. 17
2841		-	"§ 58-64A-380. Examination. 18
2842		-	(a) The Commissioner or the Commissioner's designee may, in the Commissioner's 19
2843		-	discretion, visit a provider offering continuing care in this State to examine its books and records. 20
2844		-	Expenses incurred by the Commissioner in conducting examinations under this section shall be 21
2845		-	paid by the provider examined. 22
2846		-	(b) The provisions of G.S. 58-2-131, 58-2-132, 58-2-133, 58-2-134, 58-2-155, 58-2-180, 23
2847		-	58-2-185, and 58-6-5 apply to this Article and are hereby incorporated by reference. 24
2848		-	(c) If a provider relies on a contractual or financial relationship with another person in 25
2849		-	order to meet the financial requirements of this Article, the Commissioner or the Commissioner's 26
2850		-	designee may examine the person that has a contractual or financial relationship with the provider 27
2851		-	to the extent necessary to ascertain the financial condition of the provider. 28
2852		-	(d) A provider shall make a copy of the examination report issued by the Commissioner 29
2853		-	available for inspection by all residents within 10 business days after issuance." 30
2854		-	SECTION 3. This act becomes effective December 1, 2025, and applies to (i) 31
2855		-	offenses committed on or after that date and (ii) contracts issued, renewed, or amended on or 32
2856		-	after that date. 33
	2781	+	(a) There shall be a 12-member Continuing Care Advisory Committee appointed by the 7
	2782	+	Commissioner. The Committee shall be comprised of providers, residents, and professionals 8
	2783	+	involved in the continuing care retirement community industry. At a minimum, the Committee 9
	2784	+	shall include at least two representatives of, and nominated by, the North Carolina Continuing 10
	2785	+	Care Residents Association and two representatives of, and nominated by, LeadingAge North 11
	2786	+	Carolina. 12
	2787	+	(b) The Committee shall meet all of the following requirements: 13
	2788	+	(1) Meet at least twice per year. 14
	2789	+	(2) Hold other meetings at times and places as the Committee chair may direct. 15
	2790	+	(3) Act in an advisory capacity to the Commissioner on matters pertaining to the 16
	2791	+	operation and regulation of continuing care retirement communities and 17
	2792	+	continuing care at home programs. 18
	2793	+	(4) Report to the Commissioner on developments in the continuing care 19
	2794	+	retirement community industry, including continuing care at home and similar 20
	2795	+	programs, and problems or concerns of providers and residents. 21
	2796	+	(5) Recommend changes in relevant statutes and rules. 22
	2797	+	(c) The term of each Committee member shall be three years, but each Committee 23
	2798	+	member shall serve until a successor has been appointed. Committee members may serve two 24
	2799	+	consecutive terms. Any appointment to fill a vacancy on the Committee created by resignation, 25
	2800	+	dismissal, death, or disability of a member shall be for the remainder of the unexpired term. 26
	2801	+	(d) Committee members shall serve without pay but shall be reimbursed for travel 27
	2802	+	expenses by the Department at the rates set out in G.S. 138-6. 28
	2803	+	"§ 58-64A-375. Other licensing or regulation. 29
	2804	+	(a) Nothing in this Article affects the authority of the Department of Health and Human 30
	2805	+	Services or any successor agency otherwise provided by law to license or regulate any long-term 31
	2806	+	care facility. 32
	2807	+	(b) Continuing care retirement communities and providers licensed under this Article that 33
	2808	+	are also subject to the provisions of the North Carolina Condominium Act under Chapter 47C of 34
	2809	+	the General Statutes shall not be subject to the provisions of Chapter 39A of the General Statutes, 35
	2810	+	provided that the continuing care retirement community's declaration of condominium does not 36
	2811	+	require the payment of any fee or charge not otherwise provided for in a resident's continuing 37
	2812	+	care contract, or other separate contract for the provisions of membership or services. 38
	2813	+	"§ 58-64A-380. Examination. 39
	2814	+	(a) The Commissioner or the Commissioner's designee may, in the Commissioner's 40
	2815	+	discretion, visit a provider offering continuing care in this State to examine its books and records. 41
	2816	+	Expenses incurred by the Commissioner in conducting examinations under this section shall be 42
	2817	+	paid by the provider examined. 43
	2818	+	(b) The provisions of G.S. 58-2-131, 58-2-132, 58-2-133, 58-2-134, 58-2-155, 58-2-180, 44
	2819	+	58-2-185, and 58-6-5 apply to this Article and are hereby incorporated by reference. 45
	2820	+	(c) If a provider relies on a contractual or financial relationship with another person in 46
	2821	+	order to meet the financial requirements of this Article, the Commissioner or the Commissioner's 47
	2822	+	designee may examine the person that has a contractual or financial relationship with the provider 48
	2823	+	to the extent necessary to ascertain the financial condition of the provider. 49
	2824	+	(d) A provider shall make a copy of the examination report issued by the Commissioner 50
	2825	+	available for inspection by all residents within 10 business days after issuance." 51 General Assembly Of North Carolina Session 2025
	2826	+	Page 56 House Bill 357-First Edition
	2827	+	SECTION 3. This act becomes effective December 1, 2025, and applies to (i) 1
	2828	+	offenses committed on or after that date and (ii) contracts issued, renewed, or amended on or 2
	2829	+	after that date. 3