Florida Senate - 2017 SB 1430
By Senator Lee
1 A bill to be entitled
2 An act relating to continuing care contracts;
3 providing a short title; amending s. 651.011, F.S.;
4 defining and redefining terms; amending s. 651.013,
5 F.S.; revising applicability of certain provisions of
6 the Florida Insurance Code as to providers of
7 continuing care and continuing care at-home; providing
8 legislative intent; amending s. 651.014, F.S.; making
9 technical changes; amending s. 651.019, F.S.;
10 requiring all new financing or refinancing to be in
11 the best interest of facilities and their residents;
12 revising requirements for providers relating to
13 financing and refinancing; amending s. 651.021, F.S.;
14 revising requirements for obtaining a certain written
15 approval from the Office of Insurance Regulation
16 relating to construction or marketing for an expansion
17 of a certificated facility; revising criteria used by
18 the office in determining whether to approve an
19 expansion; requiring certain entrance fees and
20 reservation deposits to be held according to certain
21 escrow requirements; amending s. 651.022, F.S.;
22 revising the required information on applications for
23 provisional certificates of authority; revising
24 requirements for amending such applications; revising
25 construction and the office’s procedures for reviewing
26 such applications; amending s. 651.023, F.S.; revising
27 the information required to be provided to the office
28 for the issuance of certificates of authority;
29 revising construction; revising the office’s
30 procedures for reviewing applications for such
31 certificates; revising the office’s requirements for
32 issuing such certificates; amending s. 651.024, F.S.;
33 revising requirements for persons who seek to acquire
34 or assume specified ownership, possession, or control
35 over providers or providers’ assets; authorizing such
36 persons to rebut presumptions of control by making
37 specified filings with the office; creating s.
38 651.0245, F.S.; providing application requirements and
39 procedures for the simultaneous acquisition of
40 facilities and the issuance of certificates of
41 authority; specifying conditions under which the
42 office may disapprove acquisitions or must approve
43 acquisitions; prohibiting the office from approving
44 certain applications; authorizing persons to rebut
45 presumptions of control by making specified filings
46 with the office; defining terms; providing
47 construction; authorizing the Financial Services
48 Commission to adopt rules; creating s. 651.025, F.S.;
49 prohibiting certain persons who served in specified
50 capacities with certain insolvent facilities or
51 providers from thereafter serving in such capacities
52 under certain circumstances; amending s. 651.0261,
53 F.S.; requiring providers to file specified quarterly
54 statements at specified intervals; authorizing the
55 office to waive the requirement under certain
56 circumstances; revising the office’s authority to
57 require, under certain circumstances, providers and
58 facilities to file monthly statements and certain
59 other information; authorizing the commission to adopt
60 rules; creating s. 651.0271, F.S.; specifying
61 requirements for actuarial opinions by providers, if
62 required by the office; specifying the circumstances
63 under which the office may require a provider to
64 submit an actuarial opinion; amending s. 651.033,
65 F.S.; revising requirements for escrow accounts that
66 are required for specified funds; prohibiting escrow
67 agents from releasing or permitting the transfer of
68 funds under certain circumstances; creating s.
69 651.034, F.S.; specifying contractual liability
70 reserve requirements for providers; specifying
71 allowable investments for such reserves; requiring
72 providers to submit to the office actuarial opinions
73 and actuarial studies at specified intervals;
74 providing requirements for such opinions and studies;
75 authorizing disciplinary actions by the office;
76 authorizing the commission to adopt rules; amending s.
77 651.035, F.S.; revising, as of a specified date, the
78 minimum liquid reserve requirements of providers;
79 providing applicability; authorizing the office to
80 order the immediate transfer of specified funds under
81 certain circumstances; authorizing providers to
82 withdraw funds from certain debt service reserves
83 under certain circumstances; providing procedures for
84 the office to provide approval or disapproval for such
85 withdrawals; conforming provisions to changes made by
86 the act; creating s. 651.036, F.S.; defining terms;
87 requiring providers to obtain the office’s approval
88 before paying certain dividends or distributions of
89 assets; providing notice requirements for providers
90 intending to pay such dividends or distributions;
91 specifying conditions under which the office may
92 approve such dividends or distributions; providing
93 criminal penalties for certain acts by persons of the
94 provider relating to dividends or distributions;
95 authorizing administrative actions by the office;
96 creating s. 651.043, F.S.; defining the term
97 “management”; providing requirements for contracts for
98 management; providing requirements and procedures for
99 providers to notify the office of certain changes in
100 management; providing procedures for the office’s
101 review and approval or disapproval of such changes;
102 specifying conditions under which the office may
103 disapprove new management and order providers to
104 cancel such contracts; requiring disapproved
105 management to be removed within a specified timeframe;
106 authorizing disciplinary action by the office under
107 certain circumstances; requiring providers to
108 immediately remove management under certain
109 circumstances; providing for construction; amending s.
110 651.051, F.S.; requiring all records and assets of
111 providers to be maintained in this state; providing
112 for construction relating to certain electronic
113 storage of records; amending s. 651.055, F.S.;
114 revising requirements for continuing care contracts;
115 conforming a cross-reference; specifying the required
116 timeframe for a certain refund; creating s. 651.058,
117 F.S.; specifying grounds upon which the office may
118 disapprove continuing care contracts; creating s.
119 651.064, F.S.; prohibiting persons from unfair and
120 deceptive trade practices relating to continuing care
121 contracts; providing civil penalties; specifying such
122 unfair and deceptive trade practices; authorizing
123 certain trade practices; providing for construction;
124 amending s. 651.071, F.S.; revising construction
125 relating to continuing care and continuing care at
126 home contracts in the event of receivership or
127 liquidation proceedings against providers; amending s.
128 651.091, F.S.; revising disclosure requirements for
129 continuing care facilities and certain providers;
130 conforming a cross-reference; amending s. 651.105,
131 F.S.; revising applicability of certain provisions of
132 the Florida Insurance Code relating to examinations
133 and investigations; authorizing the office, as of a
134 specified date, to examine providers and their
135 affiliates for a specified purpose; defining the term
136 “enterprise risk”; creating s. 651.1055, F.S.;
137 requiring providers to cooperate with the office,
138 including responding to correspondence and providing
139 certain information; amending s. 651.106, F.S.;
140 revising the office’s authority in certain
141 disciplinary actions; revising grounds for such
142 actions against applicants or providers; creating s.
143 651.1065, F.S.; prohibiting certain persons of
144 impaired or insolvent continuing care retirement
145 communities from permitting such communities to
146 solicit or accept new continuing care contracts under
147 certain circumstances; providing a criminal penalty;
148 amending s. 651.107, F.S.; revising the period of
149 suspension of certificates of authority; revising
150 certain conditions under which such suspensions are
151 rescinded and the certificates are reinstated;
152 amending s. 651.114, F.S.; revising procedures and
153 requirements of providers and the office in
154 delinquency proceedings of providers; providing for
155 and revising construction; revising certain authority
156 relating to a certain petition for a court order from
157 the office to the Department of Financial Services;
158 revising conditions under which the department or
159 office are vested with certain powers and duties
160 relating to delinquency proceedings; revising notice
161 requirements for providers in delinquency proceedings;
162 creating s. 651.1141, F.S.; providing that certain
163 violations constitute an immediate danger to the
164 public health, safety, or welfare; authorizing the
165 office to issue immediate final orders for such
166 violations; amending s. 651.1151, F.S.; requiring
167 providers to submit to the office contracts for
168 administrative, vendor, or management services with
169 certain entities; authorizing the office to disapprove
170 such contracts under certain circumstances; deleting
171 an obsolete date; amending s. 651.119, F.S.; providing
172 that the department is the creditor of liquidated
173 facilities or facilities pending liquidation for the
174 purpose of providing certain entrance fee refunds;
175 authorizing the office to seek voluntary contributions
176 from and levy certain assessments against providers’
177 contractual liability reserves; revising the limit on
178 assessments that the office may assess from certain
179 reserves for specified purposes; revising requirements
180 for the office in modifying providers’ minimum liquid
181 reserve requirements; specifying the allocation and
182 maximum refund amounts payable to displaced residents;
183 defining the term “entrance fee refund”; amending s.
184 651.125, F.S.; providing a criminal penalty for a
185 person who takes certain actions without having a
186 valid provisional certificate of authority; making a
187 technical change; amending s. 651.131, F.S.; revising
188 applicability of certain limitations of judgment
189 amounts resulting from actions under prior law;
190 repealing s. 651.132, F.S., relating to amendment or
191 renewal of existing contracts; amending s. 651.012,
192 F.S.; conforming a cross-reference; providing
193 effective dates.
195 Be It Enacted by the Legislature of the State of Florida:
197 Section 1. This act may be cited as the “Protecting Florida
198 Seniors from Financial Fraud Act.”
199 Section 2. Section 651.011, Florida Statutes, is amended to
201 651.011 Definitions.—As used in this chapter, the term:
202 (1) “Actuarial opinion” means an opinion issued by an
203 actuary in accordance with the standards of practice adopted by
204 the Actuarial Standards Board.
205 (2) “Actuarial study” means an analysis addressing the
206 current actuarial financial condition of a provider or the
207 projected actuarial financial condition of an applicant, which
208 is performed by an actuary in accordance with accepted actuarial
209 principles and the standards of practice adopted by the
210 Actuarial Standards Board, and which includes all of the
212 (a) An actuarial report.
213 (b) A statement of actuarial opinion.
214 (c) An actuarial balance sheet.
215 (d) A cohort pricing analysis.
216 (e) A cash-flow projection.
217 (f) A description of the actuarial methodology, formulas,
218 and assumptions used in the study.
219 (g) Other information as reasonably requested by the
221 (3) “Actuary” means an individual who is qualified to sign
222 an actuarial opinion in accordance with the American Academy of
223 Actuaries’ qualification standards and who is a member in good
224 standing of the American Academy of Actuaries.
(1) “Advertising” means the dissemination of written,
226 visual, or electronic information by a provider, or any person
227 affiliated with or controlled by a provider, to potential
228 residents or their representatives for the purpose of inducing
229 such persons to subscribe to or enter into a contract for
230 continuing care or continuing care at-home.
231 (5) (2) “Continuing care” or “care” means, pursuant to a
232 contract, furnishing shelter and nursing care or personal
233 services to a resident who resides in a facility, whether such
234 nursing care or personal services are provided in the facility
235 or in another setting designated in the contract for continuing
236 care, by an individual not related by consanguinity or affinity
237 to the resident, upon payment of an entrance fee.
238 (6) (3) “Continuing Care Advisory Council” or “advisory
239 council” means the council established in s. 651.121.
240 (7) (4) “Continuing care at-home” means, pursuant to a
241 contract other than a contract described in subsection (5) (2),
242 furnishing to a resident who resides outside the facility the
243 right to future access to shelter and nursing care or personal
244 services, whether such services are provided in the facility or
245 in another setting designated in the contract, by an individual
246 not related by consanguinity or affinity to the resident, upon
247 payment of an entrance fee.
248 (8) (5) “Entrance fee” means an initial or deferred payment
249 of a sum of money or property made as full or partial payment
250 for continuing care or continuing care at-home. An accommodation
251 fee, admission fee, member fee, or other fee of similar form and
252 application are considered to be an entrance fee.
253 (9) (6) “Facility” means a place where continuing care is
254 furnished and may include one or more physical plants on a
255 primary or contiguous site or an immediately accessible site. As
256 used in this subsection, the term “immediately accessible site”
257 means a parcel of real property separated by a reasonable
258 distance from the facility as measured along public
259 thoroughfares, and the term “primary or contiguous site” means
260 the real property contemplated in the feasibility study required
261 by this chapter.
262 (10) (7) “Generally accepted accounting principles” means
263 those accounting principles and practices adopted by the
264 Financial Accounting Standards Board and the American Institute
265 of Certified Public Accountants, including Statement of Position
266 90-8 with respect to any full year to which the statement
268 (11) “Impaired” means the provider is not in compliance
269 with the capital reserve requirement under s. 651.035(1)(c).
270 (12) (8) “Insolvency” means the condition in which the
271 provider is unable to pay its obligations as they come due in
272 the normal course of business.
273 (13) (9) “Licensed” means that the provider has obtained a
274 certificate of authority from the department.
275 (14) “Manager” or “management company” means a person who
276 administers the day-to-day business operations of a facility for
277 a provider, subject to the policies, directives, and oversight
278 of the provider.
279 (15) (10) “Nursing care” means those services or acts
280 rendered to a resident by an individual licensed or certified
281 pursuant to chapter 464.
282 (16) (11) “Personal services” has the same meaning as in s.
284 (17) (12) “Provider” means:
285 (a) For provisional certificates of authority applied for
286 on or after July 1, 2017, the corporation, whether operated for
287 profit or not, that:
288 1. Owns and operates a facility the owner or operator,
289 whether a natural person, partnership or other unincorporated
290 association, however organized, trust, or corporation, of an
291 institution, building, residence, or other place, whether
292 operated for profit or not, which owner or operator and that
293 provides continuing care for a fixed or variable fee, or for any
294 other remuneration of any type, whether fixed or variable, for
295 the period of care, payable in a lump sum or lump sum and
296 monthly maintenance charges or in installments; or
297 2. Provides or continuing care at-home for a fixed or
298 variable fee, or for any other remuneration of any type, whether
299 fixed or variable, for the period of care, payable in a lump sum
300 or lump sum and monthly maintenance charges or in installments.
301 (b) For a provisional certificate of authority or a
302 certificate of authority applied for before July 1, 2017, and
303 subsequently issued, the owner or operator, whether a natural
304 person, partnership, other unincorporated association however
305 organized, trust, or corporation of an institution, building,
306 residence, or other place, whether operated for profit or not,
307 which owner or operator provides continuing care or continuing
308 care at-home for a fixed or variable fee, or for any other
309 remuneration of any type, whether fixed or variable, for the
310 period of care, payable in a lump sum or lump sum and monthly
311 maintenance charges or in installments.
313 The term does not apply to an entity that has existed and
314 continuously operated a facility located on at least 63 acres in
315 this state providing residential lodging to members and their
316 spouses for at least 66 years on or before July 1, 1989, and has
317 the residential capacity of 500 persons, is directly or
318 indirectly owned or operated by a nationally recognized
319 fraternal organization, is not open to the public, and accepts
320 only its members and their spouses as residents.
321 (18) (13) “Records” means all documents, correspondence, and
322 the permanent financial, directory, and personnel information
323 and data maintained by a provider pursuant to this chapter,
324 regardless of the physical form, characteristics, or means of
326 (19) (14) “Resident” means a purchaser of, a nominee of, or
327 a subscriber to a continuing care or continuing care at-home
328 contract. Such contract does not give the resident a part
329 ownership of the facility in which the resident is to reside,
330 unless expressly provided in the contract.
331 (20) (15) “Shelter” means an independent living unit, room,
332 apartment, cottage, villa, personal care unit, nursing bed, or
333 other living area within a facility set aside for the exclusive
334 use of one or more identified residents.
335 Section 3. Section 651.013, Florida Statutes, is amended to
337 651.013 Chapter exclusive; applicability of other laws;
338 legislative intent.—
339 (1) Except as herein provided, providers of continuing care
340 and continuing care at-home are governed by the provisions of
341 this chapter and are exempt from all other provisions of the
342 Florida Insurance Code.
343 (2) In addition to other applicable provisions cited in
344 this chapter, the office has the authority granted under ss.
345 624.302 and 624.303, 624.307-624.312, 624.308-624.312 , 624.318,
346 624.319(1)-(3), 624.320-624.321, 624.324, and 624.34, and
347 624.422 of the Florida Insurance Code to regulate providers of
348 continuing care and continuing care at-home.
349 (3) The Legislature recognizes that continuing care
350 communities have become an important option for the long-term
351 care needs for many elderly residents of this state. The
352 Legislature further recognizes that, in exchange for an entrance
353 fee or monthly maintenance charges, a continuing care contract
354 guarantees continuing care or the refund of a portion of the
355 entrance fee upon death or other specified circumstance.
356 Continuing care providers contract for services substantially
357 similar to life, health, and long-term care insurance products.
358 Therefore, the Legislature finds that providers of continuing
359 care and continuing care at-home are engaged in the business of
360 insurance and must be regulated and governed by this chapter.
361 Section 4. Section 651.014, Florida Statutes, is amended to
363 651.014 Other insurance business not authorized.— Nothing in
364 The Florida Insurance Code or this chapter may not shall be
365 deemed to authorize any provider of a continuing care facility
366 to transact any insurance business other than that of continuing
367 care insurance or otherwise to engage in any other type of
368 insurance, unless it is authorized under a certificate of
369 authority issued by the office under the provisions of the
370 Florida Insurance Code.
371 Section 5. Section 651.019, Florida Statutes, is amended to
373 651.019 New financing, additional financing, or
375 (1) All new financing or refinancing must be in the best
376 interest of the facility and its residents After issuance of a
377 certificate of authority, the provider shall submit to the
378 office a general outline, including intended use of proceeds,
379 with respect to any new financing, additional financing, or
380 refinancing at least 30 days before the closing date of such
381 financing transaction.
382 (2) The provider shall:
383 (a) Provide notice to the residents’ council of any new
384 financing or refinancing at least 30 days before the closing
385 date of such financing or refinancing transaction. The notice
386 must include a general outline and the intended use of proceeds,
387 as well as any financing agreements and any related documents,
388 escrow or trust agreements, and statistical or financial data
389 prepared in support of such financing or refinancing
390 transaction; or
391 (b) If the facility does not have a residents’ council,
392 inform all residents in writing that the notice required by
393 paragraph (a) is available for review and specify where the
394 notice may be accessed furnish any information the office may
395 reasonably request in connection with any new financing,
396 additional financing, or refinancing, including, but not limited
397 to, the financing agreements and any related documents, escrow
398 or trust agreements, and statistical or financial data.
399 (3) Within 30 days after the closing date of such financing
400 or refinancing transaction, the provider shall also submit to
401 the office copies of executed financing documents and a copy of
402 all documents required to be submitted to the residents’ council
403 under paragraph (2)(a) within 30 days after the closing date.
404 Section 6. Paragraphs (b) and (c) of subsection (2) of
405 section 651.021, Florida Statutes, are amended, and subsection
406 (3) is added to that section, to read:
407 651.021 Certificate of authority required.—
408 (2) Written approval must be obtained from the office
409 before commencing construction or marketing for an expansion of
410 a certificated facility equivalent to the addition of at least
411 20 percent of existing units or 20 percent or more in the number
412 of continuing care at-home contracts. This provision does not
413 apply to construction for which a certificate of need from the
414 Agency for Health Care Administration is required.
415 (b) The application for such approval shall be on forms
416 adopted by the commission and provided by the office. The
417 application must include the feasibility study required by s.
418 651.022(3) or s. 651.023(1)(b) and such other information as
419 required by s. 651.023 or as reasonably requested by the office.
420 If the expansion is only for continuing care at-home contracts,
421 an actuarial study prepared by an independent actuary in
422 accordance with standards adopted by the American Academy of
423 Actuaries which presents the financial impact of the expansion
424 may be substituted for the feasibility study.
425 (c) In determining whether an expansion should be approved,
426 the office shall use the criteria provided in s. 651.022(6) ss.
427 651.022(6) and 651.023(4).
428 (3) Entrance fees and reservation deposits collected for
429 expansions must be held pursuant to the escrow requirements of
430 s. 651.023(5) and (6).
431 Section 7. Subsection (2), paragraph (b) of subsection (5),
432 and subsections (6) and (8) of section 651.022, Florida
433 Statutes, are amended to read:
434 651.022 Provisional certificate of authority; application.—
435 (2) The application for a provisional certificate of
436 authority shall be on a form prescribed by the commission and
437 shall contain the following information:
438 (a) If the applicant or provider is a corporation, A copy
439 of the articles of incorporation and bylaws ; if the applicant or
440 provider is a partnership or other unincorporated association, a
441 copy of the partnership agreement, articles of association, or
442 other membership agreement; and, if the applicant or provider is
443 a trust, a copy of the trust agreement or instrument.
444 (b) The full names, residences, and business addresses of:
445 1. The proprietor, if the applicant or provider is an
447 2. Every partner or member, if the applicant or provider is
448 a partnership or other unincorporated association, however
449 organized, having fewer than 50 partners or members, together
450 with the business name and address of the partnership or other
452 3. The principal partners or members, if the applicant or
453 provider is a partnership or other unincorporated association,
454 however organized, having 50 or more partners or members,
455 together with the business name and business address of the
456 partnership or other organization. If such unincorporated
457 organization has officers and a board of directors, the full
458 name and business address of each officer and director may be
459 set forth in lieu of the full name and business address of its
460 principal members.
461 1. 4. The corporation and each officer and director thereof ,
462 if the applicant or provider is a corporation.
463 5. Every trustee and officer, if the applicant or provider
464 is a trust.
465 2. 6. The manager, whether an individual, corporation,
466 partnership, or association.
467 3. 7. Any stockholder holding at least a 10 percent interest
468 in the operations of the facility in which the care is to be
470 4. 8. Any person whose name is required to be provided in
471 the application under this paragraph and who owns any interest
472 in or receives any remuneration from, directly or indirectly,
473 any professional service firm, association, trust, partnership,
474 or corporation providing goods, leases, or services to the
475 facility for which the application is made, with a real or
476 anticipated value of $10,000 or more, and the name and address
477 of the professional service firm, association, trust,
478 partnership, or corporation in which such interest is held. The
479 applicant shall describe such goods, leases, or services and the
480 probable cost to the facility or provider and shall describe why
481 such goods, leases, or services should not be purchased from an
482 independent entity.
483 5. 9. Any person, corporation, partnership, association, or
484 trust owning land or property leased to the facility, along with
485 a copy of the lease agreement.
486 6. 10. Any affiliated parent or subsidiary corporation or
488 (c)1. Evidence that the persons named in paragraph (b) are
489 competent and trustworthy applicant is reputable and of
490 responsible character. If the applicant is a firm, association,
491 organization, partnership, business trust, corporation, or
492 company, The form must further shall require evidence that the
493 members or shareholders are reputable and of responsible
494 character , and the person in charge of providing care under a
495 certificate of authority is competent and trustworthy shall
496 likewise be required to produce evidence of being reputable and
497 of responsible character.
498 2. Evidence satisfactory to the office of the ability of
499 the applicant to comply with the provisions of this chapter and
500 with rules adopted by the commission pursuant to this chapter.
501 3. A statement of whether a person identified in the
502 application for a provisional certificate of authority or the
503 administrator or manager of the facility, if such person has
504 been designated, or any such person living in the same location:
505 a. Has been convicted of a felony or has pleaded nolo
506 contendere to a felony charge, or has been held liable or has
507 been enjoined in a civil action by final judgment, if the felony
508 or civil action involved fraud, embezzlement, fraudulent
509 conversion, or misappropriation of property.
510 b. Is subject to a currently effective injunctive or
511 restrictive order or federal or state administrative order
512 relating to business activity or health care as a result of an
513 action brought by a public agency or department, including,
514 without limitation, an action affecting a license under chapter
515 400 or chapter 429.
517 The statement must shall set forth the court or agency, the date
518 of conviction or judgment, and the penalty imposed or damages
519 assessed, or the date, nature, and issuer of the order. Before
520 determining whether a provisional certificate of authority is to
521 be issued, the office may make an inquiry to determine the
522 accuracy of the information submitted pursuant to subparagraphs
523 1., 2., and 3. 1. and 2.
524 (d) The contracts for continuing care and continuing care
525 at-home to be entered into between the provider and residents
526 which meet the minimum requirements of s. 651.055 or s. 651.057
527 and which include a statement describing the procedures required
528 by law relating to the release of escrowed entrance fees. Such
529 statement may be furnished through an addendum.
530 (e) Any advertisement or other written material proposed to
531 be used in the solicitation of residents.
532 (f) Such other reasonable data, financial statements, and
533 pertinent information as the commission or office may reasonably
534 require with respect to the provider or the facility, including
535 the most recent audited financial statements of comparable
536 facilities currently or previously owned, managed, or developed
537 by the applicant or its principal, to assist in determining the
538 financial viability of the project and the management
539 capabilities of its managers and owners.
540 (g) The forms of the residency contracts, reservation
541 contracts, escrow agreements, and wait list contracts, if
542 applicable, which are proposed to be used by the provider in the
543 furnishing of care. The office shall approve contracts and
544 escrow agreements that comply with ss. 651.023(1)(c), 651.033,
545 651.055, and 651.057. Thereafter, no other form of contract or
546 agreement may be used by the provider until it has been
547 submitted to the office and approved.
548 (h) An actuarial study.
550 If any material change occurs in the facts set forth in an
551 application filed with the office pursuant to this subsection,
552 an amendment setting forth such changes must be immediately
553 filed with the office, and a copy of the amendment must be sent
554 by registered mail to the principal office of the facility and
555 to the principal office of the controlling company.
557 (b) An application is deemed complete upon receipt of all
558 requested information and correction of any error or omission
559 for which the applicant was timely notified or when the time for
560 such notification has expired Within 15 days after receipt of
561 all of the requested additional information, the office shall
562 notify the applicant in writing that all of the requested
563 information has been received and the application is deemed to
564 be complete as of the date of the notice. Failure to so notify
565 the applicant in writing within the 15-day period shall
566 constitute acknowledgment by the office that it has received all
567 requested additional information, and the application shall be
568 deemed to be complete for purposes of review upon the date of
569 the filing of all of the requested additional information.
570 (6) Within 90 45 days after the date an application is
571 deemed complete as set forth in paragraph (5)(b), the office
572 shall complete its review and issue a provisional certificate of
573 authority to the applicant based upon its review and a
574 determination that the application meets all requirements of
575 law, that the feasibility study was based on sufficient data and
576 reasonable assumptions, and that the applicant will be able to
577 provide continuing care or continuing care at-home as proposed
578 and meet all financial and contractual obligations related to
579 its operations, including the financial requirements of this
580 chapter. If the application is denied, the office shall notify
581 the applicant in writing, citing the specific failures to meet
582 the provisions of this chapter. Such denial entitles the
583 applicant to a hearing pursuant to chapter 120.
584 (8) The office may shall not approve any application that
585 which includes in the plan of financing any encumbrance of the
586 operating reserves required by this chapter.
587 Section 8. Subsections (1), (2), and (3), paragraph (a) of
588 subsection (4), and present subsection (9) of section 651.023,
589 Florida Statutes, are amended, paragraph (c) of subsection (7)
590 of that section is redesignated as subsection (8), and present
591 subsection (8) of that section is redesignated as subsection
592 (9), to read:
593 651.023 Certificate of authority; application.—
594 (1) After issuance of a provisional certificate of
595 authority, the office shall issue to the holder of such
596 provisional certificate a certificate of authority if the holder
597 of the provisional certificate provides the office with the
598 following information:
599 (a) Any material change in status with respect to the
600 information required to be filed under s. 651.022(2) in the
601 application for the provisional certificate.
602 (b) A feasibility study prepared by an independent
603 consultant which contains all of the information required by s.
604 651.022(3) and financial forecasts or projections prepared in
605 accordance with standards adopted by the American Institute of
606 Certified Public Accountants or in accordance with standards for
607 feasibility studies or continuing care retirement communities
608 adopted by the Actuarial Standards Board.
609 1. The study must also contain an independent evaluation
610 and examination opinion, or a comparable opinion acceptable to
611 the office, by the consultant who prepared the study, of the
612 underlying assumptions used as a basis for the forecasts or
613 projections in the study and that the assumptions are reasonable
614 and proper and the project as proposed is feasible.
615 2. The study must take into account project costs, actual
616 marketing results to date and marketing projections, resident
617 fees and charges, competition, resident contract provisions, and
618 any other factors which affect the feasibility of operating the
620 3. If the study is prepared by an independent certified
621 public accountant, it must contain an examination opinion for
622 the first 3 years of operations and financial projections having
623 a compilation opinion for the next 3 years. If the study is
624 prepared by an independent consulting actuary, it must contain
625 mortality and morbidity data and an actuary’s signed opinion
626 that the project as proposed is feasible and that the study has
627 been prepared in accordance with standards adopted by the
628 American Academy of Actuaries.
629 (c) Subject to subsection (4), a provider may submit an
630 application for a certificate of authority and any required
631 exhibits upon submission of proof that the project has a minimum
632 of 50 30 percent of the units reserved for which the provider is
633 charging an entrance fee. This does not apply to an application
634 for a certificate of authority for the acquisition of a facility
635 for which a certificate of authority was issued before October
636 1, 1983, to a provider who subsequently becomes a debtor in a
637 case under the United States Bankruptcy Code, 11 U.S.C. ss. 101
638 et seq., or to a provider for which the department has been
639 appointed receiver pursuant to part II of chapter 631.
640 (d) Proof that commitments have been secured for both
641 construction financing and long-term financing or a documented
642 plan acceptable to the office has been adopted by the applicant
643 for long-term financing.
644 (e) Proof that all conditions of the lender have been
645 satisfied to activate the commitment to disburse funds other
646 than the obtaining of the certificate of authority, the
647 completion of construction, or the closing of the purchase of
648 realty or buildings for the facility.
649 (f) Proof that the aggregate amount of entrance fees
650 received by or pledged to the applicant, plus anticipated
651 proceeds from any long-term financing commitment, plus funds
652 from all other sources in the actual possession of the
653 applicant, equal at least 100 percent of the aggregate cost of
654 constructing or purchasing, equipping, and furnishing the
655 facility plus 100 percent of the anticipated startup losses of
656 the facility.
657 (g) Complete audited financial statements of the applicant,
658 prepared by an independent certified public accountant in
659 accordance with generally accepted accounting principles, as of
660 the date the applicant commenced business operations or for the
661 fiscal year that ended immediately preceding the date of
662 application, whichever is later, and complete unaudited
663 quarterly financial statements attested to by the applicant
664 after the date of the last audit.
665 (h) Proof that the applicant has complied with the escrow
666 requirements of subsection (5) or subsection (7) and will be
667 able to comply with s. 651.035.
668 (i) An actuarial study.
669 (j) Such other reasonable data, financial statements, and
670 pertinent information as the commission or office may require
671 with respect to the applicant or the facility, to determine the
672 financial status of the facility and the management capabilities
673 of its managers and owners.
674 (2) Within 30 days after receipt of the information
675 required under subsection (1), the office shall examine such
676 information and notify the provider in writing, specifically
677 requesting any additional information the office is permitted by
678 law to require. An application is deemed complete upon receipt
679 of all requested information and correction of any error or
680 omission for which the applicant was timely notified or when the
681 time for such notification has expired Within 15 days after
682 receipt of all of the requested additional information, the
683 office shall notify the provider in writing that all of the
684 requested information has been received and the application is
685 deemed to be complete as of the date of the notice. Failure to
686 notify the applicant in writing within the 15-day period
687 constitutes acknowledgment by the office that it has received
688 all requested additional information, and the application shall
689 be deemed complete for purposes of review on the date of filing
690 all of the required additional information.
691 (3) Within 90 45 days after an application is deemed
692 complete as set forth in subsection (2), and upon completion of
693 the remaining requirements of this section, the office shall
694 complete its review and issue or deny a certificate of authority
695 to the holder of a provisional certificate of authority. If a
696 certificate of authority is denied, the office must notify the
697 holder of the provisional certificate in writing, citing the
698 specific failures to satisfy the provisions of this chapter. If
699 denied, the holder of the provisional certificate is entitled to
700 an administrative hearing pursuant to chapter 120.
701 (4) The office shall issue a certificate of authority upon
702 determining that the applicant meets all requirements of law and
703 has submitted all of the information required by this section,
704 that all escrow requirements have been satisfied, and that the
705 fees prescribed in s. 651.015(2) have been paid.
706 (a) Notwithstanding satisfaction of the 30-percent minimum
707 reservation requirement of paragraph (1)(c), A No certificate of
708 authority may not shall be issued until the project has a
709 minimum of 50 percent of the units reserved for which the
710 provider is charging an entrance fee, and proof is provided to
711 the office. If a provider offering continuing care at-home is
712 applying for a certificate of authority or approval of an
713 expansion pursuant to s. 651.021(2), the same minimum
714 reservation requirements must be met for the continuing care and
715 continuing care at-home contracts, independently of each other.
716 (10) (9) The office may not approve an application that
717 includes in the plan of financing any encumbrance of the
718 operating reserves required by this chapter.
719 Section 9. Section 651.024, Florida Statutes, is amended to
721 651.024 Acquisition.—
722 (1) A person who seeks to acquire a provider; assume the
723 role of general partner of a provider; or otherwise assume
724 ownership or possession of, or control over, 10 percent or more
725 of a provider’s assets is issued a certificate of authority to
726 operate a continuing care facility or a provisional certificate
727 of authority shall be subject to the provisions of s. 628.4615
728 and is not required to make filings pursuant to s. 651.022 or s.
730 (2) A person who seeks to acquire, and become the provider
731 for, a facility is subject to s. 651.0245 and is not required to
732 make filings pursuant to ss. 628.4615, 651.022, and 651.023.
733 (3) A person may rebut a presumption of control by filing a
734 disclaimer of control with the office on a form prescribed by
735 the commission. The disclaimer must fully disclose all material
736 relationships and bases for affiliation between the person and
737 the provider or facility, as well as the basis for disclaiming
738 the affiliation. In lieu of such form, a person or acquiring
739 party may file with the office a copy of a Schedule 13G filed
740 with the Securities and Exchange Commission pursuant to Rule
741 13d-1(b) or (c) under the Securities Exchange Act of 1934 as
742 amended, 17 C.F.R. s. 240.13d-1. After a disclaimer has been
743 filed, the provider or facility is relieved of any duty to
744 register or report under this section which may arise out of the
745 provider’s or facility’s relationship with the person, unless
746 the office disallows the disclaimer.
747 Section 10. Section 651.0245, Florida Statutes, is created
748 to read:
749 651.0245 Application for the simultaneous acquisition of a
750 facility and issuance of a certificate of authority.—
751 (1) A person may not, individually or in conjunction with
752 any affiliated person of such person, directly or indirectly,
753 acquire a facility operating under a subsisting certificate of
754 authority and engage in the business of providing continuing
755 care, unless:
756 (a) The person or affiliated person has filed with the
757 office and has sent by registered mail to the principal office
758 of the facility and controlling company a letter of notification
759 regarding the transaction or proposed transaction no later than
760 5 days after entering into an agreement to purchase the
761 facility. The notification must be provided on forms prescribed
762 by the commission, containing information determined necessary
763 to understand the transaction and to identify all purchasers and
764 owners involved;
765 (b) The person or affiliated person has filed with the
766 office an application, signed under oath and prepared on forms
767 prescribed by the commission, which contains the information
768 specified in subsection (2). The application must be completed
769 and filed within 30 days after entering into an agreement to
770 purchase the facility; and
771 (c) The office has approved the application to purchase the
772 facility and has issued a certificate of authority to the
774 (2) An application filed with the office and furnished to
775 the facility and controlling company must contain the following
776 information and any additional information that the office deems
777 necessary to determine the character, experience, ability, and
778 other qualifications of the person, or the affiliated person of
779 such person, for the protection of the residents of the facility
780 and of the public:
781 (a) A copy of the articles of incorporation and bylaws of
782 the applicant.
783 (b) The full names, residences, and business addresses of:
784 1. The corporation and each officer and director thereof.
785 2. The manager, whether an individual, corporation,
786 partnership, or association.
787 3. Any stockholder holding at least a 10 percent interest
788 in the operations of the facility in which the care is to be
790 4. Any person whose name is required to be provided in the
791 application under this paragraph and who owns any interest in or
792 receives any remuneration from, directly or indirectly, any
793 professional service firm, association, trust, partnership, or
794 corporation providing goods, leases, or services to the facility
795 for which the application is made, with a real or anticipated
796 value of $10,000 or more, and the name and address of the
797 professional service firm, association, trust, partnership, or
798 corporation in which such interest is held. The applicant shall
799 describe such goods, leases, or services and the probable cost
800 to the facility or provider and shall describe why such goods,
801 leases, or services should not be purchased from an independent
803 5. Any person, corporation, partnership, association, or
804 trust owning land or property leased to the facility, along with
805 a copy of the lease agreement.
806 6. Any affiliated parent or subsidiary corporation or
808 7. Any other person performing duties similar to those of
809 persons in the positions described in subparagraphs 1.-6.
810 (c)1. Evidence that the persons named in paragraph (b) are
811 competent and trustworthy. The form must require evidence that
812 the person in charge of providing care under a certificate of
813 authority is competent and trustworthy.
814 2. Evidence satisfactory to the office of the applicant’s
815 ability to comply with this chapter and with rules adopted by
816 the commission pursuant to this chapter.
817 3. A statement of whether a person identified in the
818 application or the administrator or manager of the facility, if
819 such person has been designated, or any person living in the
820 same location:
821 a. Has been convicted of a felony, has pleaded nolo
822 contendere to a felony charge, or has been held liable or has
823 been enjoined in a civil action by final judgment, if the felony
824 or civil action involved fraud, embezzlement, fraudulent
825 conversion, or misappropriation of property.
826 b. Is subject to a currently effective injunctive or
827 restrictive order or federal or state administrative order
828 relating to business activity or health care as a result of an
829 action brought by a public agency or department, including,
830 without limitation, an action affecting a license under chapter
831 400 or chapter 429.
833 The statement must specify the court or agency, the date of
834 conviction or judgment, and the penalty imposed or damages
835 assessed; or the date, nature, and issuer of the order. Before
836 determining whether to issue a provisional certificate of
837 authority, the office may make an inquiry to determine the
838 accuracy of the information submitted pursuant to subparagraphs
839 1., 2., and 3.
840 4. For each natural person about whom information is
841 required to be furnished pursuant to paragraph (b), a statement
843 a. The natural person’s occupations, positions of
844 employment, and offices held during the past 10 years.
845 b. The principal business and address of any business,
846 corporation, or organization in which each office of the natural
847 person was held, or in which each occupation or position of
848 employment was carried on.
849 c. Whether the natural person was at any time during the
850 past 10 years convicted of any crime other than a traffic
852 d. Whether the natural person has been the subject of any
853 proceeding for the revocation of any license during the past 10
854 years and, if so, the nature of the proceeding and the
855 disposition of the proceeding.
856 e. Whether, during the past 10 years, the natural person
857 has been the subject of any proceeding under the federal
858 Bankruptcy Act; or whether, during such 10-year period, any
859 person or other business or organization in which the natural
860 person was a director, officer, trustee, partner, owner,
861 manager, or other official has been subject to any such
862 proceeding, either during the time in which the natural person
863 was a director, officer, or trustee, if a corporation, or a
864 partner, owner, manager, joint venturer, or other official, if
865 not a corporation, or within 12 months thereafter.
866 f. Whether, during the past 10 years, the natural person
867 has been enjoined, temporarily or permanently, by a court of
868 competent jurisdiction from violating any federal or state law
869 regulating the business of continuing care, insurance,
870 securities, or banking or from carrying out any particular
871 practice or practices in the course of the business of
872 continuing care, insurance, securities, or banking, together
873 with details as to any such event.
875 Any person filing the statement required by this subparagraph
876 must give all required information that is within the knowledge
877 of the directors, officers, or trustees of the person making the
878 filing and of any person directly or indirectly controlling such
880 5. Fingerprints of each person referred to in paragraph
882 (d) The source and amount of the funds or other
883 consideration used, or to be used, in making the acquisition of
884 the facility.
885 (e) Any plan or proposal that persons described under
886 paragraph (b) may have made to liquidate the facility, to sell
887 any of its assets or merge or consolidate it with any person, or
888 to make any other major change in its business or corporate
889 structure or management; and any plan or proposal that such
890 persons may have made to liquidate any controlling company of
891 the facility, to sell any of its assets or merge or consolidate
892 it with any person, or to make any other major change in its
893 business or corporate structure or management.
894 (f) The contracts for continuing care and continuing care
895 at-home to be entered into between the provider and residents
896 which meet the minimum requirements of s. 651.055 or s. 651.057
897 and which include a statement describing the procedures required
898 by law relating to the release of escrowed entrance fees. Such
899 statement may be furnished through an addendum.
900 (g) Such other data, financial statements, and pertinent
901 information as the commission or office may reasonably require
902 with respect to the provider or the facility, including the most
903 recent audited financial statements of comparable facilities
904 currently or previously owned, managed, or developed by the
905 applicant or its principal, to assist in determining the
906 financial viability of the project and the management
907 capabilities of its managers and owners.
908 (h) The forms of the residency contracts, reservation
909 contracts, escrow agreements, and wait list contracts, if
910 applicable, which are proposed to be used by the provider in the
911 furnishing of care. The office shall approve contracts and
912 escrow agreements that comply with ss. 651.023(1)(c), 651.033,
913 651.055, and 651.057. Thereafter, no other form of contract or
914 agreement may be used by the provider until it has been
915 submitted to the office and approved.
916 (i) An actuarial study.
917 (j) Any advertisement or other written material proposed to
918 be used in the solicitation of residents.
920 If any material change occurs in the facts set forth in the
921 application filed with the office pursuant to this subsection,
922 an amendment setting forth such changes must be filed
923 immediately with the office and a copy of the amendment must be
924 sent by registered mail to the principal office of the facility
925 and to the principal office of the controlling company.
926 (3)(a) In addition to the information required in
927 subsection (2), an applicant shall submit a feasibility study
928 prepared by an independent consultant and financial forecasts or
929 projections prepared in accordance with standards adopted by the
930 American Institute of Certified Public Accountants. The
931 feasibility study must include at least the following
933 1. A description of the facility, including the location,
934 size, occupancy level, and description of the continuing care
935 and continuing care at-home contracts in force.
936 2. Projected revenues, including anticipated entrance fees;
937 monthly service fees; nursing care rates, if applicable; and all
938 other sources of revenue, including the total amount of debt
939 financing required.
940 3. Projected expenses, including staffing requirements and
941 salaries; cost of property, plant, and equipment, including
942 depreciation expense; interest expense; marketing expense; and
943 other operating expenses.
944 4. Current assets and liabilities of the applicant.
945 5. Expectations of the financial condition of the project,
946 including the projected cash flow and a projected balance sheet
947 and an estimate of the funds anticipated to be necessary to
948 cover startup losses, if any, for 3 years.
949 6. The inflation factor, if any, assumed in the study for
950 the proposed facility and how and where it is applied.
951 7. Project costs, marketing projections, resident fees and
952 charges, the competition, resident contract provisions, and
953 other factors that affect the feasibility of the facility.
954 8. The name of the person who prepared the feasibility
955 study and the experience of that person in preparing similar
956 studies or otherwise consulting in the field of continuing care.
957 (b)1. The study must also contain an independent evaluation
958 and examination opinion, or a comparable opinion acceptable to
959 the office, by the consultant who prepared the study, of the
960 underlying assumptions used as a basis for the forecasts or
961 projections in the study and that the assumptions are reasonable
962 and proper and the project as proposed is feasible.
963 2. The study must take into account project costs, actual
964 marketing results to date and marketing projections, resident
965 fees and charges, competition, resident contract provisions, and
966 any other factors which affect the feasibility of operating the
968 3. If the study is prepared by an independent certified
969 public accountant, it must contain an examination opinion for
970 the first 3 years of operations and financial projections having
971 a compilation opinion for the next 3 years. If the study is
972 prepared by an independent consulting actuary, it must contain
973 mortality and morbidity data and an actuary’s signed opinion
974 that the project as proposed is feasible and that the study has
975 been prepared in accordance with standards adopted by the
976 American Academy of Actuaries.
977 (4)(a) The application must be reviewed in accordance with
978 chapter 120. The office may conduct on its own initiative, or
979 shall conduct if requested to do so in writing by a
980 substantially affected person, a proceeding to consider the
981 appropriateness of the proposed acquisition. Timeframes for
982 purposes of chapter 120 are tolled during the pendency of the
983 proceeding. Any written request for a proceeding must be filed
984 with the office within 10 days after the date notice is given
985 pursuant to paragraph (1)(a). During the pendency of the
986 proceeding or review period by the office, any person or
987 affiliated person complying with the filing requirements of this
988 section may proceed and take all steps necessary to conclude the
989 acquisition so long as the acquisition becoming final is
990 conditioned upon obtaining office approval. However, at any time
991 the office finds an immediate danger exists to the public
992 health, safety, and welfare of the residents, the office shall
993 immediately order, pursuant to s. 120.569(2)(n), the proposed
994 acquisition disapproved and any further steps to conclude the
995 acquisition ceased.
996 (b) If a request for a proceeding is filed, the proceeding
997 must be conducted within 60 days after the date the written
998 request for a proceeding is received by the office. A
999 recommended order must be issued within 20 days after the date
1000 the proceedings are closed. A final order must be issued within
1001 20 days after the date of the recommended order or, if
1002 exceptions to the recommended order are filed, within 20 days
1003 after the date the exceptions are filed.
1004 (5) The office may disapprove any acquisition subject to
1005 the provisions of this section by any person or any affiliated
1006 person of such person who:
1007 (a) Willfully violates this section;
1008 (b) Fails to divest any ownership interest obtained in
1009 violation of this section or fails to divest any direct or
1010 indirect control of such ownership interest within 25 days after
1011 the issuance of an order by the office; or
1012 (c) Acquires any ownership interest in a facility or
1013 controlling company or direct or indirect control of such
1014 ownership interest without complying with this section.
1015 (6) The office must approve any such acquisition and issue
1016 a certificate of authority if it finds, on the basis of the
1017 record made during any proceeding or on the basis of the filed
1018 application if no proceeding is conducted, all of the following:
1019 (a) Upon completion of the acquisition, the applicant will
1020 be able to satisfy the requirements for the issuance of a
1021 certificate of authority to provide continuing care.
1022 (b) The financial condition of the acquiring person or
1023 persons will not jeopardize the financial stability of the
1024 facility or prejudice the interests of its residents or the
1026 (c) Any plan or proposal that the acquiring person or
1027 persons have made:
1028 1. To liquidate the facility, sell its assets, or merge or
1029 consolidate it with any person, or to make any other major
1030 change in its business or corporate structure or management is
1031 fair and free of prejudice to the residents of the facility or
1032 to the public; or
1033 2. To liquidate any controlling company, sell its assets,
1034 or merge or consolidate it with any person, or to make any major
1035 change in its business or corporate structure or management
1036 which would have an effect upon the facility is fair and free of
1037 prejudice to the residents of the facility or to the public.
1038 (d) The competence, experience, and integrity of those
1039 persons who will control directly or indirectly the operation of
1040 the applicant indicate that the acquisition is in the best
1041 interest of the residents of the facility and in the public
1043 (e) The natural persons for whom background information is
1044 required to be furnished pursuant to this section have such
1045 backgrounds as to indicate that it is in the best interests of
1046 the residents of the facility and in the public interest to
1047 permit such persons to exercise control over the applicant.
1048 (f) The directors and officers or other persons performing
1049 duties similar to those of persons to be employed after the
1050 acquisition have sufficient continuing care experience and
1051 ability to assure reasonable promise of successful operation.
1052 (g) The management of the applicant after the acquisition
1053 will be competent and trustworthy, and will possess sufficient
1054 managerial experience so as to make the proposed operation of
1055 the facility not hazardous to the public.
1056 (h) The management of the applicant and facility after the
1057 acquisition will not include any person who has directly or
1058 indirectly through ownership, control, reinsurance transactions,
1059 or other business relations unlawfully manipulated the assets,
1060 accounts, finances, or books of any facility, insurer, provider,
1061 or other entity or otherwise acted in bad faith with respect
1063 (i) The acquisition is not likely to be hazardous or
1064 prejudicial to the residents of the facility or to the public.
1065 (j) The effect of the acquisition would not substantially
1066 lessen competition or would not tend to create a monopoly
1069 The applicant has the burden of proof for any finding made
1070 pursuant to this subsection.
1071 (7) A vote by the stockholder of record, or by any other
1072 person, of any security acquired in contravention of this
1073 section is invalid. An acquisition contrary to this section is
1074 void. Upon the petition of the office, the facility, or the
1075 controlling company, the circuit court for the county in which
1076 the principal office of the facility is located may, without
1077 limiting the generality of its authority, order the issuance or
1078 entry of an injunction or other order to enforce the provisions
1079 of this section. A facility or controlling company has a private
1080 right of action to enforce this section. The facility or
1081 controlling company is not required to file a demand with the
1082 office that it perform its functions as a prerequisite to a suit
1083 by the facility or controlling company against another person,
1084 and the office is not deemed a necessary party in any action by
1085 the facility or controlling company to enforce this section. A
1086 person who makes or proposes an acquisition requiring the filing
1087 of an application pursuant to this section, or who files such an
1088 application, is deemed to have thereby designated the Chief
1089 Financial Officer, or his or her assistant or deputy or another
1090 person in charge of his or her office, as such person’s agent
1091 for service of process under this section and is thereby deemed
1092 to have submitted himself or herself to the administrative
1093 jurisdiction of the office and to the jurisdiction of the
1094 circuit court.
1095 (8) An approval by the office under this section does not
1096 constitute a recommendation by the office of the tender offer or
1097 exchange offer, or acquisition if no tender offer or exchange
1098 offer is involved. It is unlawful for a person to represent that
1099 the office’s approval constitutes a recommendation. A person who
1100 violates the provisions of this subsection commits a felony of
1101 the third degree, punishable as provided in s. 775.082, s.
1102 775.083, or s. 775.084. The statute of limitations period for
1103 the prosecution of an offense committed under this subsection is
1104 5 years.
1105 (9) The office may not approve any application that
1106 includes in the plan of financing any encumbrance of the
1107 reserves required by this chapter.
1108 (10) A facility acquired in violation of this section holds
1109 no certificate of authority and is deemed to be in such
1110 condition, or to be using or to have been subject to such
1111 methods or practices in the conduct of its business, as to
1112 render its further operation presently or prospectively
1113 hazardous to its residents, creditors, or stockholders or to the
1115 (11) A person may rebut a presumption of control by filing
1116 a disclaimer of control with the office on a form prescribed by
1117 the office. The disclaimer must fully disclose all material
1118 relationships and bases for affiliation between the person and
1119 the provider or facility as well as the basis for disclaiming
1120 the affiliation. In lieu of such form, a person or acquiring
1121 party may file with the office a copy of a Schedule 13G filed
1122 with the Securities and Exchange Commission pursuant to Rule
1123 13d-1(b) or (c) under the Securities Exchange Act of 1934 as
1124 amended, 17 C.F.R. s. 240.13d-1.
1125 (12) For the purposes of this section:
1126 (a) The term “controlling company” means any corporation,
1127 trust, or association owning, directly or indirectly, 25 percent
1128 or more of the voting securities of one or more facilities that
1129 are stock corporations, or 25 percent or more of the ownership
1130 interest of one or more facilities that are not stock
1132 (b) The term “natural person” means an individual.
1133 (c) The term “person” includes a natural person,
1134 corporation, association, trust, general partnership, limited
1135 partnership, joint venture, firm, proprietorship, or any other
1136 entity that may hold a license or certificate as a facility.
1137 (13) The commission may adopt, amend, or repeal rules
1138 pursuant to chapter 120 which are necessary to implement this
1140 Section 11. Section 651.025, Florida Statutes, is created
1141 to read:
1142 651.025 Insolvent facilities or providers.—A person who was
1143 a proprietor, general partner, member, officer, director,
1144 trustee, or manager of a facility or provider doing business in
1145 this state and who served in that capacity within the 2-year
1146 period before the date the facility or provider became
1147 insolvent, for any insolvency that occurs on or after July 1,
1148 2017, may not thereafter serve as a proprietor, general partner,
1149 member, officer, director, trustee, or manager of a facility or
1150 provider authorized in this state unless such person
1151 demonstrates that his or her personal actions or omissions were
1152 not a significant contributing cause to the insolvency.
1153 Section 12. Section 651.0261, Florida Statutes, is amended
1154 to read:
1155 651.0261 Quarterly and monthly statements.—
1156 (1) Within 45 days after the end of each fiscal quarter,
1157 each provider shall file a quarterly unaudited financial
1158 statement of the provider or of the facility in the form
1159 prescribed by the commission by rule and a detailed listing of
1160 the assets maintained in the liquid reserve as required under s.
1161 651.035. This requirement may be waived by the office upon
1162 written request from a provider accredited under s. 651.028.
1163 (2) If the office finds , pursuant to rules of the
1164 commission, that such information is needed to properly monitor
1165 the financial condition of a provider or facility or is
1166 otherwise needed to protect the public interest, the office may
1167 require the provider to file: ,
1168 (a) Within 25 days after the end of each month, a monthly
1169 unaudited financial statement of the provider or of the facility
1170 in the form prescribed by the commission by rule and a detailed
1171 listing of the assets maintained in the liquid reserve as
1172 required under s. 651.035 Within 45 days after the end of each
1173 fiscal quarter, a quarterly unaudited financial statement of the
1174 provider or of the facility in the form prescribed by the
1175 commission by rule. The commission may by rule require all or
1176 part of the statements or filings required under this section to
1177 be submitted by electronic means in a computer-readable form
1178 compatible with the electronic data format specified by the
1180 (b) Such other data, financial statements, and pertinent
1181 information as the commission or office may reasonably require
1182 with respect to the provider or the facility, or its directors,
1183 trustees, members, branches, subsidiaries, or affiliates, to
1184 determine the financial status of the provider or of the
1185 facility, and the management capabilities of its managers and
1187 (3) A filing under subsection (2) may be required if:
1188 (a) The provider has been in operation for less than 2
1189 years since the date of issuance of its certificate of
1191 (b) The provider is subject to:
1192 1. Administrative supervision proceedings;
1193 2. A corrective action plan;
1194 3. Refinancing;
1195 4. An acquisition; or
1196 5. Delinquency or receivership proceedings.
1197 (c) The provider or facility displays a declining financial
1199 (4) The commission may by rule require all or part of the
1200 statements or filings required under this section to be
1201 submitted by electronic means in a computer-readable form
1202 compatible with the electronic data format specified by the
1204 Section 13. Section 651.0271, Florida Statutes, is created
1205 to read:
1206 651.0271 Actuarial opinions.—
1207 (1) When required by the office pursuant to subsection (2),
1208 a provider must submit an actuarial opinion for each facility
1209 operated in this state which states whether the reserves and
1210 related actuarial items held in support of the policies and
1211 contracts are computed appropriately, are based on assumptions
1212 that satisfy contractual provisions, are consistent with prior
1213 reported amounts, and comply with applicable state law.
1214 (a) The actuarial opinion must state whether the provider
1215 has adequate resources to meet all of its actuarial liabilities
1216 and related statement items for each operated facility and
1217 whether the provider’s financial condition is actuarially sound.
1218 (b) The amount to be held in the reserve must be determined
1219 and certified by an actuary pursuant to s. 651.034.
1220 (c) The opinion must be conducted within 1 year before the
1221 date of the office’s request or completed within 90 days after
1222 the date of the office’s request.
1223 (2) The office may require a provider to submit the
1224 actuarial opinion if the office finds that:
1225 (a) The provider has a negative net worth;
1226 (b) The provider is subject to quarterly or monthly
1228 (c) The average occupancy of the facility has declined by
1229 more than 5 percent from the prior year;
1230 (d) The provider is delinquent on the payment of refunds
1231 due pursuant to the terms of resident contracts; or
1232 (e) More than 20 percent of the contracts issued by the
1233 provider are refundable.
1234 Section 14. Section 651.033, Florida Statutes, is amended
1235 to read:
1236 651.033 Escrow accounts.—
1237 (1) When funds are required to be deposited in an escrow
1238 account pursuant to s. 651.022, s. 651.023, s. 651.035, or s.
1240 (a) The escrow account must shall be established in a
1241 Florida bank, Florida savings and loan association, or Florida
1242 trust company acceptable to the office or on deposit with the
1243 department; and the funds deposited therein must shall be kept
1244 and maintained in an account separate and apart from the
1245 provider’s business accounts.
1246 (b) An escrow agreement must shall be entered into between
1247 the bank, savings and loan association, or trust company and the
1248 provider of the facility; the agreement must shall state that
1249 its purpose is to protect the resident or the prospective
1250 resident; and, upon presentation of evidence of compliance with
1251 applicable portions of this chapter, or upon order of a court of
1252 competent jurisdiction, the escrow agent must shall release and
1253 pay over the funds, or portions thereof, together with any
1254 interest accrued thereon or earned from investment of the funds,
1255 to the provider or resident as directed.
1256 (c) Any agreement establishing an escrow account required
1257 under the provisions of this chapter is shall be subject to
1258 approval by the office. The agreement must shall be in writing
1259 and shall contain, in addition to any other provisions required
1260 by law, a provision whereby the escrow agent agrees to abide by
1261 the duties imposed by paragraphs (b) and (e), (2)(a), (2)(b),
1262 and (4)(a) and subsection (5) under this section.
1263 (d) All funds deposited in an escrow account, if invested,
1264 must shall be invested in cash, cash equivalents, mutual funds,
1265 equities, or investment grade bonds as set forth in part II of
1266 chapter 625; however, such investment may not diminish the funds
1267 held in escrow below the amount required by this chapter. Funds
1268 deposited in an escrow account are not subject to charges by the
1269 escrow agent except escrow agent fees associated with
1270 administering the accounts, or subject to any liens, judgments,
1271 garnishments, creditor’s claims, or other encumbrances against
1272 the provider or facility except as provided in s. 651.035(1).
1273 (e) At the request of either the provider or the office,
1274 the escrow agent shall issue a statement indicating the status
1275 of the escrow account.
1276 (2) In addition, the escrow agreement shall provide that
1277 the escrow agent or another person designated to act in the
1278 escrow agent’s place and the provider, except as otherwise
1279 provided in s. 651.035, shall notify the office in writing at
1280 least 10 days before the withdrawal of any portion of any funds
1281 required to be escrowed under the provisions of s. 651.035.
1282 However, in the event of an emergency and upon petition by the
1283 provider, the office may waive the 10-day notification period
1284 and allow a withdrawal of up to 10 percent of the required
1285 minimum liquid reserve. The office shall have 3 working days to
1286 deny the petition for the emergency 10-percent withdrawal. If
1287 the office fails to deny the petition within 3 working days, the
1288 petition shall be deemed to have been granted by the office. For
1289 the purpose of this section, “working day” means each day that
1290 is not a Saturday, Sunday, or legal holiday as defined by
1291 Florida law. Also for the purpose of this section, the day the
1292 petition is received by the office shall not be counted as one
1293 of the 3 days.
1294 (3) In addition, When entrance fees are required to be
1295 deposited in an escrow account pursuant to s. 651.022, s.
1296 651.023, or s. 651.055:
1297 (a) The provider shall deliver to the resident a written
1298 receipt. The receipt must show the payor’s name and address, the
1299 date, the price of the care contract, and the amount of money
1300 paid. A copy of each receipt, together with the funds, must
1301 shall be deposited with the escrow agent or as provided in
1302 paragraph (c). The escrow agent must shall release such funds to
1303 the provider 7 days after the date of receipt of the funds by
1304 the escrow agent if the provider, operating under a certificate
1305 of authority issued by the office, has met the requirements of
1306 s. 651.023(6). However, if the resident rescinds the contract
1307 within the 7-day period, the escrow agent must shall release the
1308 escrowed fees to the resident.
1309 (b) At the request of an individual resident of a facility,
1310 the escrow agent shall issue a statement indicating the status
1311 of the resident’s portion of the escrow account.
1312 (c) At the request of an individual resident of a facility,
1313 the provider may hold the check for the 7-day period and may
1314 shall not deposit it during this time period. If the resident
1315 rescinds the contract within the 7-day period, the check must
1316 shall be immediately returned to the resident. Upon the
1317 expiration of the 7 days, the provider shall deposit the check.
1318 (d) A provider may assess a nonrefundable fee, which is
1319 separate from the entrance fee, for processing a prospective
1320 resident’s application for continuing care or continuing care
1322 (3) (4) Any fees of $1,500 or less which are assessed with
1323 respect to prospective residents to have their names placed on a
1324 facility’s waiting list are shall not be subject to the escrow
1325 provisions of this section.
1326 (4) (5) When funds are required to be deposited in an escrow
1327 account pursuant to s. 651.022 or , s. 651.023, or s. 651.035,
1328 the following shall apply:
1329 (a) The escrow agreement must shall require that the escrow
1330 agent furnish the provider with a quarterly statement indicating
1331 the amount of any disbursements from or deposits to the escrow
1332 account and the condition of the account during the period
1333 covered by the statement. The agreement must shall require that
1334 the statement be furnished to the provider by the escrow agent
1335 on or before the 10th day of the month following the end of the
1336 quarter for which the statement is due. If the escrow agent does
1337 not provide the quarterly statement to the provider on or before
1338 the 10th day of the month following the month for which the
1339 statement is due, the office may, in its discretion, levy
1340 against the escrow agent a fine not to exceed $25 a day for each
1341 day of noncompliance with the provisions of this subsection.
1342 (b) If the escrow agent does not provide the quarterly
1343 statement to the provider on or before the 10th day of the month
1344 following the quarter for which the statement is due, the
1345 provider must shall, on or before the 15th day of the month
1346 following the quarter for which the statement is due, send a
1347 written request for the statement to the escrow agent by
1348 certified mail return receipt requested.
1349 (c) On or before the 20th day of the month following the
1350 quarter for which the statement is due, the provider shall file
1351 with the office a copy of the escrow agent’s statement or, if
1352 the provider has not received the escrow agent’s statement, a
1353 copy of the written request to the escrow agent for the
1355 (d) The office may, in its discretion, in addition to any
1356 other penalty that may be provided for under this chapter, levy
1357 a fine against the provider not to exceed $25 a day for each day
1358 the provider fails to comply with the provisions of this
1360 (e) Funds held on deposit with the department are exempt
1361 from the reporting requirements of this subsection.
1362 (5) The escrow agent may not release or otherwise permit
1363 the transfer of funds without the written approval of the
1364 office, except as described in paragraph (2)(a).
1365 Section 15. Section 651.034, Florida Statutes, is created
1366 to read:
1367 651.034 Contractual liability reserve.—
1368 (1) A provider shall maintain a reserve for the benefit of
1369 residents in an amount determined by an actuary to be
1370 appropriate given the amount of the provider’s contractual
1371 obligations to residents, including refunds and medical care.
1372 (2) The provider must revise the reserve amount annually
1373 and submit the provider’s calculation of the reserve amount to
1374 the office concurrently with the annual report.
1375 (3) The reserve may be invested in any combination of the
1377 (a) Cash or cash equivalents;
1378 (b) Mutual funds, equities, or investment grade bonds that
1379 accumulate interest or earnings;
1380 (c) Clean, irrevocable, unconditional evergreen letters of
1381 credit issued or confirmed by a qualified United States
1382 financial institution that is regulated, supervised, and
1383 examined by federal or state authorities having regulatory
1384 authority over banks and trust companies; or
1385 (d) Real property, subject to all of the following
1387 1. With the prior written approval of the office, up to 70
1388 percent of the reserves may be held as net equity in the real
1389 property of the facility.
1390 2. Not more than 50 percent of the provider’s net equity in
1391 the real property may be allocated as part of the reserve. The
1392 net equity is the book value, assessed value, or current
1393 appraised value within 12 months before the end of the fiscal
1394 year, less any depreciation and encumbrances, as recorded on
1395 audited financial statements acceptable to the office.
1396 (4) The provider shall submit to the office, at least once
1397 every 3 years with the annual report, an actuarial opinion as to
1398 the provider’s actuarial financial condition, along with the
1399 supporting actuarial study. The actuarial opinion must be based
1400 on an actuarial study completed by the actuary. The actuarial
1401 opinion and supporting actuarial study must examine, refer to,
1402 and opine on the provider’s actuarial financial condition as of
1403 December 31 of the reporting year. The actuarial study must
1404 demonstrate that fees for nonrefundable contracts are not
1405 increased due to any portion of reserves held under this section
1406 which are due to refund liability.
1407 (5) The office may suspend, revoke, or take other
1408 administrative action against the certificate of authority of a
1409 facility that violates this section.
1410 (6) The commission may adopt rules providing the standards
1411 for the actuarial opinion which are consistent with standards
1412 adopted by the Actuarial Standards Board on December 31, 2016,
1413 and subsequent revisions thereto.
1414 Section 16. Effective January 1, 2018, section 651.035,
1415 Florida Statutes, is amended to read:
1416 651.035 Minimum liquid reserve requirements.—
1417 (1) A provider shall maintain in escrow a minimum liquid
1418 reserve consisting of the following reserves, as applicable:
1419 (a) Each provider shall maintain in escrow as a debt
1420 service reserve the aggregate amount of all principal and
1421 interest payments due during the fiscal year on any mortgage
1422 loan or other long-term financing of the facility, including
1423 property taxes as recorded in the audited financial statements
1424 required under s. 651.026. The amount must include any leasehold
1425 payments and all costs related to such payments. If principal
1426 payments are not due during the fiscal year, the provider shall
1427 maintain in escrow as a minimum liquid reserve an amount equal
1428 to interest payments due during the next 12 months on any
1429 mortgage loan or other long-term financing of the facility,
1430 including property taxes.
1431 (b) A provider that has outstanding indebtedness that
1432 requires a debt service reserve to be held in escrow pursuant to
1433 a trust indenture or mortgage lien on the facility and for which
1434 the debt service reserve may only be used to pay principal and
1435 interest payments on the debt that the debtor is obligated to
1436 pay, and which may include property taxes and insurance, may
1437 include such debt service reserve in computing the minimum
1438 liquid reserve needed to satisfy this subsection if the provider
1439 furnishes to the office a copy of the agreement under which such
1440 debt service is held, together with a statement of the amount
1441 being held in escrow for the debt service reserve, certified by
1442 the lender or trustee and the provider to be correct. The
1443 trustee shall provide the office with any information concerning
1444 the debt service reserve account upon request of the provider or
1445 the office.
1446 (c) A Each provider shall at all times maintain a capital
1447 reserve consisting of:
1448 1. For the first 12 months of operation, 25 percent of the
1449 total operating expenses projected in the feasibility study
1450 required by s. 651.023.
1451 2. After the first 12 months of operation, 25 percent of
1452 the total operating expenses in the most recent annual report
1453 filed pursuant to s. 651.026.
1455 For purposes of this subsection, total annual operating expenses
1456 include all expenses of the facility except depreciation and
1457 amortization. Paragraphs (a) and (b) do not apply to obligations
1458 undertaken after January 1, 2018 in escrow an operating reserve
1459 equal to 30 percent of the total operating expenses projected in
1460 the feasibility study required by s. 651.023 for the first 12
1461 months of operation. Thereafter, each provider shall maintain in
1462 escrow an operating reserve equal to 15 percent of the total
1463 operating expenses in the annual report filed pursuant to s.
1464 651.026. If a provider has been in operation for more than 12
1465 months, the total annual operating expenses shall be determined
1466 by averaging the total annual operating expenses reported to the
1467 office by the number of annual reports filed with the office
1468 within the preceding 3-year period subject to adjustment if
1469 there is a change in the number of facilities owned. For
1470 purposes of this subsection, total annual operating expenses
1471 include all expenses of the facility except: depreciation and
1472 amortization; interest and property taxes included in paragraph
1473 (a); extraordinary expenses that are adequately explained and
1474 documented in accordance with generally accepted accounting
1475 principles; liability insurance premiums in excess of those paid
1476 in calendar year 1999; and changes in the obligation to provide
1477 future services to current residents. For providers initially
1478 licensed during or after calendar year 1999, liability insurance
1479 shall be included in the total operating expenses in an amount
1480 not to exceed the premium paid during the first 12 months of
1481 facility operation. Beginning January 1, 1993, the operating
1482 reserves required under this subsection shall be in an
1483 unencumbered account held in escrow for the benefit of the
1484 residents. Such funds may not be encumbered or subject to any
1485 liens or charges by the escrow agent or judgments, garnishments,
1486 or creditors’ claims against the provider or facility. However,
1487 if a facility had a lien, mortgage, trust indenture, or similar
1488 debt instrument in place before January 1, 1993, which
1489 encumbered all or any part of the reserves required by this
1490 subsection and such funds were used to meet the requirements of
1491 this subsection, then such arrangement may be continued, unless
1492 a refinancing or acquisition has occurred, and the provider
1493 shall be in compliance with this subsection.
1494 (d) Each provider shall maintain in escrow a renewal and
1495 replacement reserve equal to 15 percent of the total accumulated
1496 depreciation based on the audited financial statement required
1497 to be filed pursuant to s. 651.026, not to exceed 15 percent of
1498 the facility’s average operating expenses for the past 3 fiscal
1499 years based on the audited financial statements for each of
1500 those years. For a provider who is an operator of a facility but
1501 is not the owner and depreciation is not included as part of the
1502 provider’s financial statement, the renewal and replacement
1503 reserve required by this paragraph must equal 15 percent of the
1504 total operating expenses of the provider, as described in this
1505 section . E ach provider licensed before October 1, 1983, shall
1506 fully fund the renewal and replacement reserve by October 1,
1507 2003, by multiplying the difference between the former escrow
1508 requirement and the present escrow requirement by the number of
1509 years the facility has been in operation after October 1, 1983 .
1510 (2)(a) In facilities where not all residents are under
1511 continuing care or continuing care at-home contracts, the
1512 reserve requirements of subsection (1) must shall be computed
1513 only with respect to the proportional share of operating
1514 expenses that are applicable to residents. For purposes of this
1515 calculation, the proportional share must shall be based upon the
1516 ratio of residents under continuing care or continuing care at
1517 home contracts to those residents who do not hold such
1519 (b) In facilities that have voluntarily and permanently
1520 discontinued marketing continuing care and continuing care at
1521 home contracts, the office may allow a reduced debt service
1522 reserve as required in subsection (1) based upon the ratio of
1523 residents under continuing care or continuing care at-home
1524 contracts to those residents who do not hold such contracts if
1525 the office finds that such reduction is not inconsistent with
1526 the security protections intended by this chapter. In making
1527 this determination, the office may consider such factors as the
1528 financial condition of the facility, the provisions of
1529 outstanding continuing care and continuing care at-home
1530 contracts, the ratio of residents under continuing care or
1531 continuing care at-home contracts to those residents who do not
1532 hold such contracts, the current occupancy rates, the previous
1533 sales and marketing efforts, the life expectancy of the
1534 remaining residents, and the written policies of the board of
1535 directors of the provider or a similar board.
1536 (3) The capital reserve must be held in a manner that
1537 accumulates interest and earnings and be invested in cash, cash
1538 equivalents, mutual funds, equities, or investment grade bonds.
1539 However, the office may order the immediate transfer of up to
1540 100 percent of the funds held in the capital reserve to the
1541 custody of the department pursuant to part III of chapter 625 if
1542 the office finds that any of the grounds enumerated in s.
1543 651.106 exist. The office may order such transfer regardless of
1544 whether the office has suspended or revoked, or intends to
1545 suspend or revoke, the certificate of authority of the provider
1546 If principal and interest payments are paid to a trust that is
1547 beneficially held by the residents as described in s.
1548 651.023(7), the office may waive all or any portion of the
1549 escrow requirements for mortgage principal and interest
1550 contained in subsection (1) if the office finds that such waiver
1551 is not inconsistent with the security protections intended by
1552 this chapter.
1553 (4) A provider may withdraw funds from the debt service
1554 reserve as provided in s. 625.62 with the written consent of the
1556 (a) In order to receive the consent of the office, the
1557 provider must file the following:
1558 1. The reason for such filing;
1559 2. Proof that the amount held on such reserve is in excess
1560 of the amount required under this section, or documentation
1561 showing why the withdrawal in necessary for the continued
1562 operation of the facility; and
1563 3. Such additional information as the office reasonably
1565 (b) The office shall notify the provider when the file is
1566 deemed complete. If the provider has complied with all prior
1567 requests for information, the file is deemed complete after 30
1568 days without communication from the office.
1569 (c) Within 30 days after the date a file is deemed
1570 complete, the office shall provide the provider with written
1571 notice of its approval or disapproval of the request. The office
1572 may disapprove any request to withdraw such funds if it
1573 determines that the withdrawal is not in the best interest of
1574 the residents The office, upon approval of a plan for fulfilling
1575 the requirements of this section and upon demonstration by the
1576 facility of an annual increase in liquid reserves, may extend
1577 the time for compliance.
1578 (5) A provider may satisfy the minimum liquid reserve
1579 requirements of this section by acquiring from a financial
1580 institution, as specified in paragraph (b), a clean,
1581 unconditional irrevocable letter of credit equal to the
1582 requirements of this section.
1583 (a) The letter of credit must be issued by a financial
1584 institution participating in the State of Florida Treasury
1585 Certificate of Deposit Program, and must be approved by the
1586 office before issuance and before any renewal or modification
1587 thereof. At a minimum, the letter of credit must provide for:
1588 1. Ninety days’ prior written notice to both the provider
1589 and the office of the financial institution’s determination not
1590 to renew or extend the term of the letter of credit.
1591 2. Unless otherwise arranged by the provider to the
1592 satisfaction of the office, deposit by the financial institution
1593 of letter of credit funds in an account designated by the office
1594 no later than 30 days before the expiration of the letter of
1596 3. Deposit by the financial institution of letter of credit
1597 funds in an account designated by the office within 4 business
1598 days following written instructions from the office that, in the
1599 sole judgment of the office, funding of the minimum liquid
1600 reserve is required.
1601 (b) The terms of the letter of credit must be approved by
1602 the office and the long-term debt of the financial institution
1603 providing such letter of credit must be rated in one of their
1604 top three long-term debt rating categories by either Moody’s
1605 Investors Service, Standard & Poor’s Corporation, or a
1606 recognized securities rating agency acceptable to the office.
1607 (c) The letter of credit must name the office as
1609 (d) Notwithstanding any other provision of this section, a
1610 provider using a letter of credit pursuant to this subsection
1611 shall, at all times, have and maintain in escrow an operating
1612 cash reserve equal to 2 months’ operating expenses as determined
1613 pursuant to s. 651.026.
1614 (e) If the issuing financial institution no longer
1615 participates in the State of Florida Treasury Certificate of
1616 Deposit Program, such financial institution shall deposit as
1617 collateral with the department eligible securities, as
1618 prescribed by s. 625.52, having a market value equal to or
1619 greater than 100 percent of the stated amount of the letter of
1621 (6) Each fiscal year, a provider may withdraw up to 33
1622 percent of the total renewal and replacement reserve available.
1623 The reserve available is equal to the market value of the
1624 invested reserves at the end of the provider’s prior fiscal
1625 year. The withdrawal must be used for capital items or major
1627 (a) Before any funds are eligible for withdrawal, the
1628 provider must obtain written permission from the office by
1629 submitting the following:
1630 1. The amount of the withdrawal and the intended use of the
1632 2. A board resolution and sworn affidavit signed by two
1633 officers or general partners of the provider which indicates
1634 approval of the withdrawal and use of the funds.
1635 3. Proof that the provider has met all funding requirements
1636 for the operating, debt service, and renewal and replacement
1637 reserves computed for the previous fiscal year.
1638 4. Anticipated payment schedule for refunding the renewal
1639 and replacement reserve fund.
1640 (b) Within 30 days after the withdrawal of funds, the
1641 provider must begin refunding the reserve account in equal
1642 monthly payments that allow for a complete funding of the
1643 withdrawal within 36 months. If the payment schedule required
1644 under subparagraph (a)4. has changed, the provider must update
1645 the office with the new payment schedule. If the provider fails
1646 to make a required monthly payment or the payment is late, the
1647 provider must notify the office within 5 days after the due date
1648 of the payment. No additional withdrawals from the renewal and
1649 replacement reserve will be allowed until all scheduled payments
1650 are current.
1651 Section 17. Section 651.036, Florida Statutes, is created
1652 to read:
1653 651.036 Dividends and other distributions of assets.—
1654 (1) As used in this section, the term “extraordinary
1655 dividend” means a dividend or distribution in excess of the
1656 greater of the provider’s entire net operating profit for the
1657 prior fiscal year or 25 percent of the net equity in the
1658 facility. As used in this subsection, the term “net operating
1659 profit” means the total revenues of a provider less total
1660 expenses, excluding amortization and depreciation.
1661 (2) A provider shall obtain the approval of the office
1662 before paying any extraordinary dividend or distributing cash or
1663 other property to stockholders, officers, directors, owners,
1664 partners, or members.
1665 (3) A provider shall file notice of its intent to pay any
1666 dividend or distribution with the office and provide a copy of
1667 such notice to the chair of the residents’ council at least 30
1668 days before the payment of such dividend or distribution. If the
1669 facility does not have a residents’ council, the provider must
1670 inform all residents of the intent to pay the dividend or
1672 (4) The office may not approve an extraordinary dividend
1673 unless, considering the following factors, it determines that
1674 the distribution or dividend would not jeopardize the financial
1675 condition of the facility:
1676 (a) The liquidity, quality, and diversification of the
1677 facility’s assets and the effect of the distribution or dividend
1678 on its ability to meet its obligations.
1679 (b) Reduction of investment portfolio and investment
1681 (c) Effects on the facility’s ability to pay resident
1683 (d) Industrywide financial conditions.
1684 (e) Prior dividend distributions of the facility.
1685 (f) Whether the dividend is only a “pass-through” dividend
1686 from a subsidiary or affiliate of the facility.
1687 (g) The ongoing maintenance obligations of the facility.
1688 (5) A director of a provider who knowingly votes for or
1689 concurs in declaration or payment of a dividend to stockholders
1690 or members other than as authorized under this section commits a
1691 misdemeanor of the second degree, punishable as provided in s.
1692 775.082 or s. 775.083, and is jointly and severally liable,
1693 together with other such directors likewise voting for or
1694 concurring, for any loss thereby sustained by creditors of the
1695 facility to the extent of such dividend.
1696 (6) A partner or stockholder receiving such an illegal
1697 dividend is liable in the amount thereof to the facility.
1698 (7) A partner voting for, concurring in, or otherwise
1699 facilitating or cooperating in the payment of a distribution
1700 other than as authorized under this section commits a
1701 misdemeanor of the second degree, punishable as provided in s.
1702 775.082 or s. 775.083, and is jointly and severally liable,
1703 together with other such partners likewise voting for,
1704 concurring in, facilitating or cooperating in the payment, for
1705 any loss thereby sustained by creditors of the facility to the
1706 extent of such dividend.
1707 (8) The office may revoke or suspend or take other
1708 administrative action against the certificate of authority of a
1709 provider that has declared or paid such an illegal dividend or
1711 Section 18. Section 651.043, Florida Statutes, is created
1712 to read:
1713 651.043 Approval of change in management.—
1714 (1) For purposes of this section, the term “management”
1716 (a) A manager or management company;
1717 (b) An officer or director of the provider or of the
1718 manager or management company;
1719 (c) Any other person performing duties similar to those of
1720 persons in paragraphs (a) or (b); or
1721 (d) A person who exercises or who has the ability to
1722 exercise effective control of the organization, or who
1723 influences or has the ability to influence the transaction of
1724 the business of the provider.
1725 (2) Effective July 1, 2017, a contract for management must
1726 be in writing and include a provision that the contract will be
1727 canceled upon issuance of an order by the office pursuant to
1728 this section without the application of any cancelation fee or
1730 (3) A provider must file notice with the office of any
1731 change in management within 5 days after the appointment of new
1732 management or the removal of approved management, whichever is
1733 sooner. For each new management appointment, the provider must
1734 submit the information required by s. 651.022(2) and a copy of
1735 the written management contract. The office shall complete its
1736 review and issue an approval or disapproval of the management
1737 contract within 30 days after the filing is deemed complete. A
1738 filing is deemed complete upon receipt of all requested
1739 information and correction of any error or omission for which
1740 the applicant was timely notified.
1741 (4) The office may disapprove new management and order the
1742 provider to cancel the contract in accordance with the terms of
1743 the contract and applicable law if the office:
1744 (a) Finds that the new management is incompetent or
1746 (b) Finds that the new management is so lacking in
1747 continuing care retirement community managerial experience as to
1748 make the proposed operation hazardous to the residents or
1749 potential residents;
1750 (c) Finds that the new management is so lacking in
1751 continuing care experience, ability, and standing as to
1752 jeopardize the reasonable promise of successful operation; or
1753 (d) Has good reason to believe that the new management is
1754 affiliated directly or indirectly through ownership, control,
1755 reinsurance transactions, or other insurance or business
1756 relations with any person or persons whose business operations
1757 are or have been marked by manipulation of assets, accounts, or
1758 reinsurance or by bad faith, to the detriment of policyholders,
1759 stockholders, investors, creditors, or the public.
1760 (5) Management disapproved by the office must be removed
1761 within 30 days after receipt by the provider of such
1763 (6) The office may revoke, suspend, or take other
1764 administrative action against the certificate of authority of
1765 the provider if the provider:
1766 (a) Fails to timely remove management disapproved by the
1768 (b) Fails to timely notify the office of a change in
1770 (c) Appoints management without a written contract; or
1771 (d) Repeatedly appoints management who were previously
1772 disapproved by the office or who are not approvable pursuant to
1773 subsection (4).
1774 (7) The provider shall remove any management immediately
1775 upon discovery of any of the following conditions, if the
1776 conditions were not disclosed in the notice to the office
1777 required in subsection (3):
1778 (a) That any person who exercises or has the ability to
1779 exercise effective control of the provider, or who influences or
1780 has the ability to influence the transaction of the business of
1781 the provider, has been found guilty of, or has pled guilty or no
1782 contest to, any felony or crime punishable by imprisonment of 1
1783 year or more under the laws of the United States or any state
1784 thereof or under the laws of any other country, which involves
1785 moral turpitude, without regard to whether a judgment or
1786 conviction has been entered by the court having jurisdiction in
1787 such case.
1788 (b) That any person who exercises or has the ability to
1789 exercise effective control of the organization, or who
1790 influences or has the ability to influence the transaction of
1791 the business of the provider, is now or was in the past
1792 affiliated, directly or indirectly, through ownership interest
1793 of 10 percent or more in, control of, or reinsurance
1794 transactions with any business, corporation, or other entity
1795 that has been found guilty of or has pleaded guilty or nolo
1796 contendere to any felony or crime punishable by imprisonment for
1797 1 year or more under the laws of the United States, any state,
1798 or any other country, regardless of adjudication.
1800 The failure to remove such management is grounds for revocation
1801 or suspension of the provider’s certificate of authority.
1802 Section 19. Section 651.051, Florida Statutes, is amended
1803 to read:
1804 651.051 Maintenance of assets and records in this state.
1805 All records and assets of a provider must be maintained in this
1806 state. No records or assets may be removed from this state by a
1807 provider unless the office consents to such removal in writing
1808 before such removal. Such consent must shall be based upon the
1809 provider’s submitting satisfactory evidence that the removal
1810 will facilitate and make more economical the operations of the
1811 provider and will not diminish the service or protection
1812 thereafter to be given the provider’s residents in this state.
1813 Before Prior to such removal, the provider must shall give
1814 notice to the president or chair of the facility’s residents’
1815 council. If such removal is part of a cash management system
1816 which has been approved by the office, disclosure of the system
1817 meets shall meet the notification requirements. The electronic
1818 storage of records on a web-based, secured storage platform by
1819 contract with a third party constitutes removal from the state
1820 and requires prior approval by the office.
1821 Section 20. Paragraphs (h) and (l) of subsection (1),
1822 subsection (2), and subsection (5) of section 651.055, Florida
1823 Statutes, are amended, and a new paragraph (m) is added to
1824 subsection (1) of that section, to read:
1825 651.055 Continuing care contracts; right to rescind.—
1826 (1) Each continuing care contract and each addendum to such
1827 contract shall be submitted to and approved by the office before
1828 its use in this state. Thereafter, no other form of contract
1829 shall be used by the provider until it has been submitted to and
1830 approved by the office. Each contract must:
1831 (h) Describe in clear and understandable language, in print
1832 no smaller than the largest type used in the body of the
1833 contract, the terms governing the refund of any portion of the
1834 entrance fee.
1835 1. For a resident whose contract with the facility provides
1836 that the resident does not receive a transferable membership or
1837 ownership right in the facility, and who has occupied his or her
1838 unit, the refund shall be calculated on a pro rata basis with
1839 the facility retaining up to 2 percent per month of occupancy by
1840 the resident and up to a 5 percent processing fee. Such refund
1841 must be paid within 120 days after giving the notice of
1842 intention to cancel. For contracts entered into on or after
1843 January 1, 2016, refunds must be made within 90 days after the
1844 contract is terminated and the unit is vacated. A resident who
1845 enters into a contract before January 1, 2016, may voluntarily
1846 sign a contract addendum approved by the office that provides
1847 for such revised refund requirement.
1848 2. In addition to a processing fee not to exceed 5 percent,
1849 if the contract provides for the facility to retain no more than
1850 1 percent per month of occupancy by the resident and the
1851 resident does not receive a transferable membership or ownership
1852 right in the facility, the contract shall provide that such
1853 refund will be paid from one of the following:
1854 a. The proceeds of the next entrance fees received by the
1855 provider for units for which there are no prior claims by any
1856 resident until paid in full;
1857 b. The proceeds of the next entrance fee received by the
1858 provider for a like or similar unit as specified in the
1859 residency or reservation contract signed by the resident for
1860 which there are no prior claims by any resident until paid in
1861 full; or
1862 c. The proceeds of the next entrance fee received by the
1863 provider for the unit that is vacated if the contract is
1864 approved by the office before October 1, 2015. Providers may not
1865 use this refund option after October 1, 2016, and must submit a
1866 new or amended contract with an alternative refund provision to
1867 the office for approval by August 2, 2016; or .
1868 d. Unrestricted funds available to the provider within 90
1869 days after the contract is terminated and the unit is vacated.
1870 3. For contracts entered into on or after January 1, 2016,
1871 that provide for a refund in accordance with sub-subparagraph
1872 2.b., the following provisions apply:
1873 a. Any refund that is due upon the resident’s death or
1874 relocation of the resident to another level of care that results
1875 in the termination of the contract must be paid the earlier of:
1876 (I) Thirty days after receipt by the provider of the next
1877 entrance fee received for a like or similar unit for which there
1878 is no prior claim by any resident until paid in full; or
1879 (II) No later than a specified maximum number of months or
1880 years, determined by the provider and specified in the contract,
1881 after the contract is terminated and the unit is vacated.
1882 b. Any refund that is due to a resident who vacates the
1883 unit and voluntarily terminates a contract after the 7-day
1884 rescission period required in subsection (2) must be paid within
1885 30 days after receipt by the provider of the next entrance fee
1886 for a like or similar unit for which there are no prior claims
1887 by any resident until paid in full and is not subject to the
1888 provisions in sub-subparagraph a. A contract is voluntarily
1889 terminated when a resident provides written notice of intent to
1890 leave and moves out of the continuing care facility after the 7
1891 day rescission period.
1892 4. For purposes of this paragraph, the term “like or
1893 similar unit” means a residential dwelling categorized into a
1894 group of units which have similar characteristics such as
1895 comparable square footage, number of bedrooms, location, age of
1896 construction, or a combination of one or more of these features
1897 as specified in the residency or reservation contract. Each
1898 category must consist of at least 5 percent of the total number
1899 of residential units designated for independent living or 10
1900 residential units designated for independent living, whichever
1901 is less. However, a group of units consisting of single family
1902 homes may contain fewer than 10 units.
1903 5. If the provider has discontinued marketing continuing
1904 care contracts, any refund due a resident must be paid within
1905 200 days after the contract is terminated and the unit is
1907 6. Unless subsection (5) applies, for any prospective
1908 resident, regardless of whether or not such a resident receives
1909 a transferable membership or ownership right in the facility,
1910 who cancels the contract before occupancy of the unit, the
1911 entire amount paid toward the entrance fee shall be refunded,
1912 less a processing fee of up to 5 percent of the entire entrance
1913 fee; however, the processing fee may not exceed the amount paid
1914 by the prospective resident. Such refund must be paid within 60
1915 days after the resident gives notice of intention to cancel. For
1916 a resident who has occupied his or her unit and who has received
1917 a transferable membership or ownership right in the facility,
1918 the foregoing refund provisions do not apply but are deemed
1919 satisfied by the acquisition or receipt of a transferable
1920 membership or an ownership right in the facility. The provider
1921 may not charge any fee for the transfer of membership or sale of
1922 an ownership right.
1923 (l) Specify whether the facility is, or is affiliated with,
1924 a religious, nonprofit, or proprietary organization or
1925 management entity or whether other facilities are owned or
1926 operated by a common provider; the extent to which the affiliate
1927 organization will be responsible for the financial and
1928 contractual obligations of the provider; and the provisions of
1929 the federal Internal Revenue Code, if any, under which the
1930 provider or affiliate is exempt from the payment of federal
1931 income tax.
1932 (m) Be marked with a combination of letters or figures
1933 identifying the contract and differentiating that contract from
1934 other contracts issued by the same provider. Whenever a change
1935 is made to a contract, the designating letters or figures
1936 thereon must be correspondingly changed.
1937 (2) A resident has the right to rescind a continuing care
1938 contract and receive a full refund of any funds paid, without
1939 penalty or forfeiture, within 7 days after executing the
1940 contract. A resident may not be required to move into the
1941 facility designated in the contract before the expiration of the
1942 7-day period. During the 7-day period, the resident’s funds must
1943 be held in an escrow account unless otherwise requested by the
1944 resident pursuant to s. 651.033(2)(c) s. 651.033(3)(c).
1945 (5) Except for a resident who postpones moving into the
1946 facility but is deemed to have occupied a unit as described in
1947 paragraph (1)(d), if a prospective resident dies before
1948 occupying the facility or, through illness, injury, or
1949 incapacity, is precluded from becoming a resident under the
1950 terms of the continuing care contract, the contract is
1951 automatically canceled, and the prospective resident or his or
1952 her legal representative shall receive a full refund of all
1953 moneys paid to the facility, except those costs specifically
1954 incurred by the facility at the request of the prospective
1955 resident and set forth in writing in a separate addendum, signed
1956 by both parties, to the contract. Such refund must be paid
1957 within 60 days after the provider receives notice of the
1958 prospective resident’s death, illness, injury, or incapacity.
1959 Section 21. Section 651.058, Florida Statutes, is created
1960 to read:
1961 651.058 Grounds for continuing care contract disapproval.
1962 The office may disapprove any contract filed under s. 651.055 or
1963 s. 651.057, or withdraw any previous approval thereof, only if
1964 the contract:
1965 (1) Is in any respect in violation of, or does not comply
1966 with, this chapter or any section herein incorporated by
1968 (2) Contains or incorporates by reference, where such
1969 incorporation is otherwise permissible, any inconsistent,
1970 ambiguous, or misleading clauses, exceptions, or conditions;
1971 (3) Has a title, heading, or other indication of its
1972 provisions which is misleading; or
1973 (4) Is printed or otherwise reproduced in such manner as to
1974 render any material provision of the form substantially
1976 Section 22. Section 651.064, Florida Statutes, is created
1977 to read:
1978 651.064 Unfair and deceptive trade practices prohibited.—
1979 (1) A person may not engage in this state in a trade
1980 practice that is defined in this section as, or that is
1981 determined by the office to be, an unfair method of competition
1982 or an unfair or deceptive act or practice involving the business
1983 of continuing care.
1984 (2) A person who violates this part is subject to a fine of
1985 up to $5,000 for each nonwillful violation and up to $40,000 for
1986 each willful violation. Fines under this subsection imposed
1987 against a provider may not exceed an aggregate amount of $20,000
1988 for all nonwillful violations arising out of the same action or
1989 an aggregate amount of $200,000 for all willful violations
1990 arising out of the same action. The fines may be imposed in
1991 addition to any other applicable penalty, including revocation
1992 or suspension of the provider’s certificate of authority. Such
1993 fines may not be used as justification for a rate increase.
1994 (3) The following are defined as unfair methods of
1995 competition and unfair or deceptive acts or practices:
1996 (a) Misrepresentations and false advertising of continuing
1997 care contracts.—Knowingly making, issuing, circulating, or
1998 causing to be made, issued, or circulated an estimate,
1999 illustration, circular, statement, sales presentation, omission,
2000 comparison, or continuing care contract altered after being
2001 issued which:
2002 1. Misrepresents the benefits, advantages, conditions, or
2003 terms of a continuing care contract;
2004 2. Misrepresents the dividends or share of the surplus to
2005 be received on a continuing care contract;
2006 3. Makes a false or misleading statement as to the
2007 dividends or share of surplus previously paid on a continuing
2008 care contract;
2009 4. Is misleading, or is a misrepresentation, as to the
2010 financial condition of a person;
2011 5. Uses a name or title of a continuing care contract or
2012 continuing care contracts which misrepresents the true nature
2014 6. Is a misrepresentation for the purpose of inducing, or
2015 tending to induce, the lapse, forfeiture, exchange, conversion,
2016 or surrender of a continuing care contract;
2017 7. Is a misrepresentation for the purpose of effecting a
2018 pledge or assignment of, or effecting a loan against, a
2019 continuing care contract;
2020 8. Misrepresents a continuing care contract as being shares
2021 of stock or misrepresents ownership interest in the provider or
2022 facility; or
2023 9. Uses an advertisement that would mislead or otherwise
2024 cause a reasonable person to believe mistakenly that the state
2025 or the Federal Government is responsible for the continuing care
2026 sales activities of a person or stands behind a person’s credit
2027 or that a person, the state, or the Federal Government
2028 guarantees any returns on a continuing care contract or is a
2029 source of payment of a continuing care obligation of or sold by
2030 a person.
2031 (b) False information and advertising generally.—Knowingly
2032 making, publishing, disseminating, circulating, or placing
2033 before the public or causing, directly or indirectly, to be
2034 made, published, disseminated, circulated, or placed before the
2036 1. In a newspaper, magazine, or other publication;
2037 2. In the form of a notice, circular, pamphlet, letter, or
2039 3. Over a radio or television station; or
2040 4. In any other way,
2042 an advertisement, an announcement, or a statement containing an
2043 assertion, a representation, or a statement with respect to the
2044 business of continuing care which is untrue, deceptive, or
2046 (c) Defamation.—Knowingly making, publishing,
2047 disseminating, or circulating, directly or indirectly, or
2048 aiding, abetting, or encouraging the making, publishing,
2049 disseminating, or circulating, of an oral or written statement
2050 or a pamphlet, circular, article, or literature which is false
2051 or maliciously critical of, or derogatory to, a person and which
2052 is calculated to injure that person.
2053 (d) Boycott, coercion, and intimidation.—Entering into an
2054 agreement to commit, or by a concerted action committing, an act
2055 of boycott, coercion, or intimidation resulting in, or tending
2056 to result in, unreasonable restraint of, or monopoly in, the
2057 business of continuing care.
2058 (e) False statements and entries.—
2059 1. Knowingly:
2060 a. Filing with a supervisory or other public official;
2061 b. Making, publishing, disseminating, or circulating;
2062 c. Delivering to a person;
2063 d. Placing before the public; or
2064 e. Causing, directly or indirectly, to be made, published,
2065 disseminated, circulated, delivered to a person, or placed
2066 before the public,
2068 a false material statement.
2069 2. Knowingly making a false entry of a material fact in a
2070 book, report, or statement of a person, or knowingly omitting to
2071 make a true entry of a material fact pertaining to the business
2072 of such person in a book, report, or statement of such person.
2073 (f) Stock operations and advisory board contracts.—Issuing
2074 or delivering, promising to issue or deliver, or permitting
2075 officers or employees to issue or deliver capital stock, benefit
2076 certificates or shares in a common-law corporation, or
2077 securities or any special or advisory board contracts or other
2078 contracts of any kind promising returns or profits as an
2079 inducement to a continuing care contract.
2080 (g) Unfair discrimination.—
2081 1. Knowingly making or permitting unfair discrimination
2082 between individuals of the same actuarially supportable class
2083 and equal expectation of life in the rates charged for a
2084 continuing care contract, in the dividends or other benefits
2085 payable thereon, or in any other term or condition of such
2087 2. Knowingly making or permitting unfair discrimination
2088 between individuals of the same actuarially supportable class,
2089 as determined at the time of initial issuance of the coverage,
2090 and essentially the same hazard in the amount of premium, policy
2091 fees, or rates charged for a policy or contract of accident,
2092 disability, or health insurance, in the benefits payable
2093 thereunder, in the terms or conditions of such contract, or in
2094 any other manner.
2095 3. Knowingly refusing to issue, canceling, or otherwise
2096 terminating a continuing care contract based upon the fact that
2097 a resident or potential resident has sought or should have
2098 sought medical or psychological treatment in the past for abuse.
2099 A provider may refuse to issue a contract based on the potential
2100 resident’s medical condition but may not consider whether such
2101 condition was caused by an act of abuse. For purposes of this
2102 subparagraph, the term “abuse” means the occurrence of one or
2103 more of the following acts:
2104 a. Attempting or committing assault, battery, sexual
2105 assault, or sexual battery;
2106 b. Placing another in fear of imminent serious bodily
2107 injury by physical menace;
2108 c. False imprisonment;
2109 d. Physically or sexually abusing a minor child; or
2110 e. An act of domestic violence as defined in s. 741.28.
2111 (h) Failure to maintain complaint-handling procedures.
2112 Failure of any person to maintain a complete record of all the
2113 complaints received since the date of the last examination. For
2114 purposes of this paragraph, “complaint” means a written
2115 communication primarily expressing a grievance.
2116 (i) Misrepresentation in applications.—
2117 1. Knowingly making a false or fraudulent written or oral
2118 statement or representation on, or relative to, an application
2119 or negotiation for a continuing care contract for the purpose of
2120 obtaining a fee, commission, money, or other benefit from an
2121 insurer, agent, broker, or individual.
2122 2. Knowingly making a material omission in the comparison
2123 of a continuing care contract with the contract it replaces for
2124 the purpose of obtaining a fee, commission, money, or other
2125 benefit from an insurer, agent, broker, or individual. For the
2126 purposes of this subparagraph, a “material omission” includes
2127 the failure to advise the resident or potential resident of the
2128 existence and operation of a preexisting condition clause in the
2129 replacement contract.
2130 (j) Twisting.—Knowingly making a misleading representation,
2131 incomplete or fraudulent comparison, or fraudulent material
2132 omission of or with respect to a continuing care contract,
2133 facility, or provider for the purpose of inducing, or tending to
2134 induce, a person to lapse, forfeit, surrender, terminate,
2135 retain, pledge, assign, borrow on, or convert a continuing care
2136 contract or to buy a continuing care contract in another
2138 (k) Advertising gifts permitted.—Paragraphs (f) and (g) do
2139 not prohibit a licensed provider or facility from giving to a
2140 resident, a potential resident, or another person, for the
2141 purpose of advertising, an article of merchandise having a value
2142 of not more than $25.
2143 (l) Free care prohibited.—
2144 1. Advertising, offering, or providing free continuing care
2145 as an inducement to the purchase or sale of real or personal
2146 property or of services directly or indirectly connected with
2147 such real or personal property.
2148 2. For the purposes of this paragraph, “free” continuing
2149 care is:
2150 a. Continuing care for which no identifiable and additional
2151 charge is made to the purchaser of such real property, personal
2152 property, or services.
2153 b. Continuing care for which an identifiable or additional
2154 charge is made in an amount less than the cost of such
2155 continuing care as to the seller or other person, other than the
2156 provider or facility, providing the same.
2157 (m) Illegal dealings in charges for care.—
2158 1. Knowingly collecting any sum for continuing care, which
2159 is not then provided, or is not in due course to be provided,
2160 under a continuing care contract as permitted by this code.
2161 2. Knowingly collecting any sum for continuing care in
2162 excess of or less than the charge applicable to continuing care
2163 as specified in the continuing care contract and as fixed by the
2165 3. A provider may not cancel or otherwise terminate a
2166 continuing care contract, or require execution of a consent to
2167 rate endorsement, during the stated contract term for the
2168 purpose of offering to issue, or issuing, a similar or identical
2169 contract to the same resident at a higher cost or continuing an
2170 existing contract at an increased cost.
2171 4. A provider may not cancel or issue a nonrenewal notice
2172 on any continuing care contract without complying with any
2173 applicable cancellation or nonrenewal provision required under
2174 the Florida Insurance Code.
2175 (n) Interlocking ownership and management.—
2176 1. A provider may retain, invest in, or acquire the whole
2177 or any part of the capital stock of any other provider or
2178 providers, or have a common management with any other provider
2179 or providers, unless such retention, investment, acquisition, or
2180 common management is inconsistent with this code or unless by
2181 reason thereof the business of such providers with the public is
2182 conducted in a manner that substantially lessens competition
2183 generally in the continuing care business.
2184 2. A person otherwise qualified may be a director of two or
2185 more providers that are competitors unless the effect thereof is
2186 substantially to lessen competition between providers generally
2187 or materially tends to create a monopoly.
2188 3. The limitations contained in this paragraph do not apply
2189 to a person who is a director of two or more providers under
2190 common control or management.
2191 (o) Prohibited arrangements as to funerals.—
2192 1. A provider may not designate in a continuing care
2193 contract the person to conduct the funeral of the resident, or
2194 organize, promote, or operate an enterprise or plan to enter
2195 into a contract with a resident under which the freedom of
2196 choice in the open market of the person having the legal right
2197 to such choice is restricted as to the purchase, arrangement,
2198 and conduct of a funeral service or any part thereof for a
2200 2. A provider may not contract or agree to furnish funeral
2201 merchandise or services in connection with the disposition of a
2202 person upon the death of a resident.
2203 3. A provider may not contract or agree with a funeral
2204 director or direct disposer to the effect that such funeral
2205 director or direct disposer conducts the funeral of a resident.
2206 (p) Certain relations with funeral directors prohibited.—
2207 1. A provider may not:
2208 a. Affix, or permit to be affixed, advertising matter of
2209 any kind or character of a licensed funeral director or direct
2210 disposer to a continuing care contract.
2211 b. Circulate, or permit to be circulated, any such
2212 advertising matter with a continuing care contract.
2213 c. Attempt in any manner or form to influence residents to
2214 employ the services of a particular licensed funeral director or
2215 direct disposer.
2216 2. A provider may not maintain, or permit its agent to
2217 maintain, an office or place of business in the office,
2218 establishment, or place of business of a funeral director or
2219 direct disposer in this state.
2220 (q) False claims; obtaining or retaining money
2222 1. An agent, physician, resident, or other person who
2223 causes to be presented to a provider a false claim for payment,
2224 knowing the same to be false; or
2225 2. An agent, collector, or other person who represents a
2226 provider or collects or does business without the authority of
2227 the provider, secures cash advances by false statements, or
2228 fails to turn over when required, or satisfactorily account for,
2229 all collections of such provider,
2231 in addition to the other penalties provided in this act, commits
2232 a misdemeanor of the second degree and, upon conviction thereof,
2233 is subject to the penalties provided by s. 775.082 or s.
2235 (r) Refusal to contract.—In addition to other provisions of
2236 this code, the refusal to issue a continuing care contract to an
2237 individual solely because of:
2238 1. Race, color, creed, marital status, sex, or national
2240 2. The age or lawful occupation of the individual, unless
2241 there is a reasonable relationship between the age or lawful
2242 occupation of the individual and the continuing care contract;
2243 3. The resident’s or potential resident’s failure to agree
2244 to place collateral business with an insurer;
2245 4. The resident’s or potential resident’s failure to
2246 purchase noninsurance services or commodities;
2247 5. The fact that the resident or potential resident is a
2248 public official; or
2249 6. The fact that the resident or potential resident had
2250 been previously refused a continuing care contract by a
2251 provider, when such refusal for this reason occurs with such
2252 frequency as to indicate a general business practice.
2253 (s) Powers of attorney.—Except as provided in s.
2255 1. Requiring, as a condition to issuance of a continuing
2256 care contract, that a resident or potential resident execute a
2257 power of attorney in favor of the provider, facility, or an
2258 employee thereof; or
2259 2. Presenting to the resident or potential resident, as a
2260 routine business practice, a form that authorizes the provider
2261 or facility to sign the resident’s or potential resident’s name
2262 on any continuing care document. To be valid, a power of
2263 attorney must be an act or practice other than as described in
2264 this paragraph, must be a separate writing in a separate
2265 document, must be executed with the full knowledge and consent
2266 of the resident or potential resident who grants the power of
2267 attorney, must be in the best interests of the resident or
2268 potential resident, and a copy of the power of attorney must be
2269 provided to the resident or potential resident at the time of
2270 the transaction.
2271 (t) Sliding.—Sliding is the act or practice of:
2272 1. Representing to the applicant that a specific ancillary
2273 coverage or product is required by law in conjunction with the
2274 purchase of a continuing care contract when such coverage or
2275 product is not required;
2276 2. Representing to the applicant that a specific ancillary
2277 coverage or product is included in the continuing care contract
2278 applied for without an additional charge when such charge is
2279 required; or
2280 3. Charging an applicant for a specific ancillary coverage
2281 or product, in addition to the cost of the continuing care
2282 contract applied for, without the informed consent of the
2284 (u) Deceptive use of name.—Using the name or logo of a
2285 financial institution, as defined in s. 655.005(1), or its
2286 affiliates or subsidiaries when marketing to or soliciting
2287 existing or prospective residents if such name or logo is used
2288 without the written consent of the financial institution and in
2289 a manner that would lead a reasonable person to believe that the
2290 material or solicitation originated from, was endorsed by, or is
2291 related to or the responsibility of the financial institution or
2292 its affiliates or subsidiaries.
2293 (v) Fraudulent signatures on an application or policy
2294 related document.—Willfully submitting to an insurer or provider
2295 on behalf of a consumer an insurance application, continuing
2296 care contract, or policy-related document bearing a false or
2297 fraudulent signature.
2298 (4) This section does not prohibit a provider from
2299 negotiating or entering into a contract with a licensed health
2300 care provider for alternative rates of payment, or from limiting
2301 payments under a policy pursuant to an agreement with a
2302 resident, as long as the continuing care provider offers the
2303 benefit of such alternative rates to residents who select
2304 designated health care providers.
2305 (5)(a) Participation in a wellness or health improvement
2306 program.—A provider may offer a voluntary wellness or health
2307 improvement program and may encourage or reward participation in
2308 the program by authorizing rewards or incentives, including, but
2309 not limited to, merchandise, gift cards, debit cards, or
2310 discounts on fees. An advertisement of the program is not
2311 subject to the limitations set forth in paragraph (1)(m).
2312 (b) Verification of medical condition by nonparticipants
2313 due to medical condition.—A provider may require a resident to
2314 provide verification, such as an affirming statement from the
2315 resident’s physician, that the resident’s medical condition
2316 makes it unreasonably difficult or inadvisable to participate in
2317 the wellness or health improvement program in order for that
2318 nonparticipant to receive the reward or incentive.
2319 (c) Disclosure requirement.—A reward or incentive offered
2320 under this subsection must be disclosed in the contract.
2321 (d) Other incentives.—This subsection does not prohibit
2322 providers from offering other incentives or rewards for
2323 adherence to a wellness or health improvement program if
2324 otherwise authorized by state or federal law.
2325 Section 23. Subsection (1) of section 651.071, Florida
2326 Statutes, is amended to read:
2327 651.071 Contracts as preferred claims on liquidation or
2329 (1) In the event of receivership or liquidation proceedings
2330 against a provider, all continuing care and continuing care at
2331 home contracts executed by a provider are shall be deemed
2332 policyholder loss preferred claims pursuant to s. 631.271
2333 against all assets owned by the provider; however, such claims
2334 are subordinate to any secured claim.
2335 Section 24. Present paragraphs (c) through (h) of
2336 subsection (2) of section 651.091, Florida Statutes, are
2337 redesignated as paragraphs (d) through (i), respectively, new
2338 paragraphs (c), (j), and (k) are added to that subsection,
2339 present paragraph (e) of subsection (2) and paragraphs (c) and
2340 (g) of subsection (3) of that section are amended, paragraphs
2341 (j) through (m) are added to subsection (3) of that section, and
2342 paragraph (d) of subsection (3) of that section is republished,
2343 to read:
2344 651.091 Availability, distribution, and posting of reports
2345 and records; requirement of full disclosure.—
2346 (2) Every continuing care facility shall:
2347 (c) Provide notice to the president or chair of the
2348 residents’ council within 3 business days of issuance of an
2349 examination report or the initiation of any legal or
2350 administrative proceeding by the office or the department and
2351 include a copy of such document.
2352 (f) (e) Deliver the information described in s. 651.085(4)
2353 in writing to the president or chair of the residents’ council
2354 and make supporting documentation available upon request Notify
2355 the residents’ council of any plans filed with the office to
2356 obtain new financing, additional financing, or refinancing for
2357 the facility and of any applications to the office for any
2358 expansion of the facility.
2359 (j) Provide to the president or chair of the residents’
2360 council a copy of any notice filed with the office relating to
2361 any change in ownership within 3 business days after the receipt
2362 of such filing by the provider.
2363 (k) Make the information available to prospective residents
2364 pursuant to paragraph (3)(d) available to current residents and
2365 provide notice of changes to that information to the president
2366 or chair of the residents’ council within 3 business days.
2367 (3) Before entering into a contract to furnish continuing
2368 care or continuing care at-home, the provider undertaking to
2369 furnish the care, or the agent of the provider, shall make full
2370 disclosure, and provide copies of the disclosure documents to
2371 the prospective resident or his or her legal representative, of
2372 the following information:
2373 (c) All ownership interests and lease agreements, including
2374 information specified in s. 651.022(2)(b)4. s. 651.022(2)(b)8.
2375 (d) In keeping with the intent of this subsection relating
2376 to disclosure, the provider shall make available for review
2377 master plans approved by the provider’s governing board and any
2378 plans for expansion or phased development, to the extent that
2379 the availability of such plans does not put at risk real estate,
2380 financing, acquisition, negotiations, or other implementation of
2381 operational plans and thus jeopardize the success of
2382 negotiations, operations, and development.
2383 (g) A statement of the reserve requirements of ss. 651.034
2384 and 651.035 and the amounts required to be held for each reserve
2385 as of the date of the last annual statement to the office The
2386 amount and location of any reserve funds required by this
2387 chapter, and the name of the person or entity having a claim to
2388 such funds in the event of a bankruptcy, foreclosure, or
2389 rehabilitation proceeding.
2390 (j) Notice of the issuance of an examination report or the
2391 initiation of any legal or administrative proceeding by the
2392 office or the department, including a copy of such document.
2393 (k) Notice that the entrance fee is the property of the
2394 provider after the expiration of the 7-day escrow requirement
2395 under s. 651.055(2).
2396 (l) If the provider operates multiple facilities, a
2397 disclosure of any distribution of assets or income between
2398 facilities that may occur and the manner in which such
2399 distributions would be made, or a statement that such
2400 distributions will not occur.
2401 (m) Notice of any holding company system or obligated group
2402 of which the provider is a member.
2403 Section 25. Subsection (1) of section 651.105, Florida
2404 Statutes, is amended, and subsection (7) is added to that
2405 section, to read:
2406 651.105 Examination and inspections.—
2407 (1) The office may at any time, and shall at least once
2408 every 3 years, examine the business of any applicant for a
2409 certificate of authority and any provider engaged in the
2410 execution of care contracts or engaged in the performance of
2411 obligations under such contracts, in the same manner as is
2412 provided for the examination of insurance companies pursuant to
2413 ss. 624.316 and 624.318 s. 624.316. For a provider as described
2414 defined in s. 651.028, such examinations shall take place at
2415 least once every 5 years. Such examinations shall be made by a
2416 representative or examiner designated by the office whose
2417 compensation will be fixed by the office pursuant to s. 624.320.
2418 Routine examinations may be made by having the necessary
2419 documents submitted to the office; and, for this purpose,
2420 financial documents and records conforming to commonly accepted
2421 accounting principles and practices, as required under s.
2422 651.026, are deemed adequate. The final written report of each
2423 examination must be filed with the office and, when so filed,
2424 constitutes a public record. Any provider being examined shall,
2425 upon request, give reasonable and timely access to all of its
2426 records. The representative or examiner designated by the office
2427 may at any time examine the records and affairs and inspect the
2428 physical property of any provider, whether in connection with a
2429 formal examination or not.
2430 (7)(a) Effective January 1, 2018, the office may examine a
2431 provider and its affiliates to ascertain the financial condition
2432 of the provider, including the enterprise risk to the provider
2433 by the ultimate controlling party, or by any entity or
2434 combination of entities within the holding company system, or by
2435 the holding company system on a consolidated basis.
2436 (b) As used in this subsection, the term “enterprise risk”
2437 means an activity, circumstance, event, or series of events
2438 involving one or more affiliates of a provider which, if not
2439 remedied promptly, is likely to have a materially adverse effect
2440 upon the financial condition or liquidity of the provider or its
2441 holding company system as a whole, including anything that would
2442 cause the provider to be in a hazardous financial condition.
2443 Section 26. Section 651.1055, Florida Statutes, is created
2444 to read:
2445 651.1055 Duty of provider to cooperate.—A provider has a
2446 duty to cooperate with the office, including responding to
2447 written correspondence and providing data, financial statements,
2448 and pertinent information as requested by the office.
2449 Section 27. Section 651.106, Florida Statutes, is amended
2450 to read:
2451 651.106 Grounds for discretionary denial refusal,
2452 suspension, or revocation of certificate of authority.—The
2453 office may deny an application or , suspend , or revoke the
2454 provisional certificate of authority or the certificate of
2455 authority of any applicant or provider if it finds that any one
2456 or more of the following grounds applicable to the applicant or
2457 provider exist:
2458 (1) Failure by the provider to continue to meet the
2459 requirements for the authority originally granted.
2460 (2) Failure by the provider to meet one or more of the
2461 qualifications for the authority specified by this chapter.
2462 (3) Material misstatement, misrepresentation, or fraud in
2463 obtaining the authority, or in attempting to obtain the same.
2464 (4) Demonstrated lack of fitness or trustworthiness.
2465 (5) Fraudulent or dishonest practices of management in the
2466 conduct of business.
2467 (6) Misappropriation, conversion, or withholding of moneys.
2468 (7) Failure to comply with, or violation of, any proper
2469 order or rule of the office or commission or violation of any
2470 provision of this chapter.
2471 (8) The insolvent or impaired condition of the provider or
2472 the provider’s being in such condition or using such methods and
2473 practices in the conduct of its business as to render its
2474 further transactions in this state hazardous or injurious to the
2476 (9) Refusal by the provider to be examined or to produce
2477 its accounts, records, and files for examination, or refusal by
2478 any of its officers to give information with respect to its
2479 affairs or to perform any other legal obligation under this
2480 chapter when required by the office.
2481 (10) Failure by the provider to comply with the
2482 requirements of s. 651.026 or s. 651.033.
2483 (11) Failure by the provider to maintain escrow accounts or
2484 funds as required by this chapter.
2485 (12) Failure by the provider to meet the requirements of
2486 this chapter for disclosure of information to residents
2487 concerning the facility, its ownership, its management, its
2488 development, or its financial condition or failure to honor its
2489 continuing care or continuing care at-home contracts.
2490 (13) Any cause for which issuance of the license could have
2491 been refused had it then existed and been known to the office.
2492 (14) Having been found guilty of, or having pleaded guilty
2493 or nolo contendere to, a felony in this state or any other
2494 state, without regard to whether a judgment or conviction has
2495 been entered by the court having jurisdiction of such cases.
2496 (15) In the conduct of business under the license, engaging
2497 in unfair methods of competition or in unfair or deceptive acts
2498 or practices prohibited under s. 651.064 part IX of chapter 626.
2499 (16) A pattern of bankrupt enterprises.
2500 (17)(a) The ownership, control, or management of the
2501 organization includes any person:
2502 1. Who is incompetent or untrustworthy;
2503 2. Who is so lacking in continuing care expertise as to
2504 make the operation of the provider hazardous to potential and
2505 existing residents;
2506 3. Who is so lacking in continuing care experience,
2507 ability, and standing as to jeopardize the reasonable promise of
2508 successful operation;
2509 4. Who is affiliated, directly or indirectly, through
2510 ownership, control, reinsurance transactions, or other business
2511 relations, with any person whose business operations are or have
2512 been marked by business practices or conduct that is to the
2513 detriment of the public, stockholders, investors, or creditors;
2515 5. Whose business operations are or have been marked by
2516 business practices or conduct that is to the detriment of the
2517 public, stockholders, investors, or creditors;
2518 (b) Any person, including any stock subscriber,
2519 stockholder, or incorporator, who exercises or has the ability
2520 to exercise effective control of the organization, or who
2521 influences or has the ability to influence the transaction of
2522 the provider’s business, does not possess the financial standing
2523 and business experience for the successful operation of the
2525 (18) The provider has not filed a notice of change in
2526 management, fails to remove a disapproved manager, or persists
2527 in appointing disapproved or unapprovable managers.
2529 Revocation of a certificate of authority under this section does
2530 not relieve a provider from the provider’s obligation to
2531 residents under the terms and conditions of any continuing care
2532 or continuing care at-home contract between the provider and
2533 residents or the provisions of this chapter. The provider shall
2534 continue to file its annual statement and pay license fees to
2535 the office as required under this chapter as if the certificate
2536 of authority had continued in full force, but the provider shall
2537 not issue any new contracts. The office may seek an action in
2538 the circuit court of Leon County to enforce the office’s order
2539 and the provisions of this section.
2540 Section 28. Section 651.1065, Florida Statutes, is created
2541 to read:
2542 651.1065 Soliciting or accepting new continuing care
2543 contracts by impaired or insolvent facilities or providers.—
2544 (1) Whether or not delinquency proceedings as to a
2545 continuing care retirement community have been or are to be
2546 initiated, a proprietor, general partner, member, officer,
2547 director, trustee, or manager of a continuing care retirement
2548 community, except with the written permission of the office, may
2549 not permit the continuing care retirement community to solicit
2550 or accept new continuing care contracts in this state after the
2551 proprietor, general partner, member, officer, director, trustee,
2552 or manager knew, or reasonably should have known, that the
2553 continuing care retirement community was impaired or insolvent.
2554 (2) A proprietor, general partner, member, officer,
2555 director, trustee, or manager who violates this section commits
2556 a felony of the third degree, punishable as provided in s.
2557 775.082, s. 775.083, or s. 775.084.
2558 Section 29. Subsection (1) of section 651.107, Florida
2559 Statutes, is amended, and subsection (4) is added to that
2560 section, to read:
2561 651.107 Duration of suspension; obligations during
2562 suspension period; reinstatement.—
2563 (1) Suspension of a certificate of authority shall be for
2564 such period, not to exceed 2 years 1 year, as is fixed by the
2565 office in the order of suspension or until the occurrence of a
2566 specific event necessary for remedying the reasons for
2567 suspension, unless the office shortens or rescinds such
2568 suspension or the order of suspension is modified, rescinded, or
2570 (4) If the suspension of the certificate of authority was
2571 until the occurrence of a specific event or events and the
2572 certificate of authority has not been otherwise terminated, upon
2573 the presentation of evidence satisfactory to the office that the
2574 specific event or events have occurred, the provider’s
2575 certificate of authority must be reinstated unless the office
2576 finds that the provider is otherwise not in compliance with the
2577 requirements of this chapter. The office shall promptly notify
2578 the provider of such reinstatement, but the provider may not
2579 consider its certificate of authority reinstated until so
2580 notified by the office. If satisfactory evidence as to the
2581 occurrence of the specific event or events has not been
2582 presented to the office within 2 years of the date of such
2583 suspension, the certificate of authority is deemed to have
2584 expired as of 2 years from the date of suspension or upon
2585 failure of the provider to continue the certificate during the
2586 suspension period in accordance with subsection (2), whichever
2587 first occurs.
2588 Section 30. Section 651.114, Florida Statutes, is amended
2589 to read:
2590 651.114 Delinquency proceedings; remedial rights.—
2591 (1) Upon determination by the office that a provider is not
2592 in compliance with this chapter, the office may notify the chair
2593 of the Continuing Care Advisory Council, who may assist the
2594 office in formulating a corrective action plan.
2595 (2) Within 30 days after a request by either the advisory
2596 council or the office, a provider shall make a plan for
2597 obtaining compliance or solvency available to the advisory
2598 council and the office , within 30 days after being requested to
2599 do so by the council, a plan for obtaining compliance or
2601 (3) Within 30 days after receipt of a plan for obtaining
2602 compliance or solvency, the office or notification, the advisory
2603 council, at the request of the office, shall:
2604 (a) Consider and evaluate the plan submitted by the
2606 (b) Discuss the problem and solutions with the provider.
2607 (c) Conduct such other business as is necessary.
2608 (d) Report its findings and recommendations to the office,
2609 which may require additional modification of the plan.
2611 This subsection may not be interpreted so as to delay or prevent
2612 the office from taking any regulatory measures it deems
2613 necessary regarding the provider that submitted the plan.
2614 (4) If the financial condition of the continuing care
2615 facility or provider is impaired or is such that if not modified
2616 or corrected, its continued operation would result in
2617 insolvency, the office may direct the provider to formulate and
2618 file with the office a corrective action plan. If the provider
2619 fails to submit a plan within 30 days after the office’s
2620 directive, or submits a plan that is insufficient to correct the
2621 condition, the office may specify a plan and direct the provider
2622 to implement the plan.
2623 (5) (4) After receiving approval of a plan by the office,
2624 the provider shall submit a progress report monthly to the
2625 advisory council and or the office , or both, in a manner
2626 prescribed by the office. After 3 months, or at any earlier time
2627 deemed necessary, the council shall evaluate the progress by the
2628 provider and shall advise the office of its findings.
2629 (6) Supervision by the office under ss. 624.80-624.87
2630 constitutes the exclusive means of supervising a provider
2631 licensed under this chapter.
2632 (7) (5) If Should the office finds find that sufficient
2633 grounds exist for rehabilitation, liquidation, conservation,
2634 reorganization, seizure, or summary proceedings of an insurer as
2635 set forth in ss. 631.051, 631.061, and 631.071, the department
2636 office may petition for an appropriate court order or may pursue
2637 such other relief as is afforded in part I of chapter 631.
2638 Before invoking its powers under part I of chapter 631, the
2639 department office shall notify the chair of the advisory
2641 (8) A delinquency proceeding under part I of chapter 631
2642 constitutes the sole and exclusive means of conserving,
2643 rehabilitating, liquidating, or seizing a provider licensed
2644 under this chapter. Notwithstanding s. 631.011, impairment of a
2645 provider for the purposes of s. 631.051 is defined according to
2646 the term “impaired” in s. 651.011.
2647 (9) (6) In the event an order of conservation,
2648 rehabilitation, liquidation, or conservation, reorganization,
2649 seizure , or summary proceeding has been entered against a
2650 provider, the department and office are vested with all of the
2651 powers and duties they have under the provisions of part I of
2652 chapter 631 in regard to delinquency proceedings of insurance
2653 companies. A provider shall give written notice of the
2654 proceeding to its residents within 3 business days after the
2655 initiation of a delinquency proceeding under chapter 631 and
2656 shall include a notice of the delinquency proceeding in any
2657 written materials provided to prospective residents.
2658 (7) If the financial condition of the continuing care
2659 facility or provider is such that, if not modified or corrected,
2660 its continued operation would result in insolvency, the office
2661 may direct the provider to formulate and file with the office a
2662 corrective action plan. If the provider fails to submit a plan
2663 within 30 days after the office’s directive or submits a plan
2664 that is insufficient to correct the condition, the office may
2665 specify a plan and direct the provider to implement the plan.
2666 (8)(a) The rights of the office described in this section
2667 are subordinate to the rights of a trustee or lender pursuant to
2668 the terms of a resolution, ordinance, loan agreement, indenture
2669 of trust, mortgage, lease, security agreement, or other
2670 instrument creating or securing bonds or notes issued to finance
2671 a facility, and the office, subject to the provisions of
2672 paragraph (c), shall not exercise its remedial rights provided
2673 under this section and ss. 651.018, 651.106, 651.108, and
2674 651.116 with respect to a facility that is subject to a lien,
2675 mortgage, lease, or other encumbrance or trust indenture
2676 securing bonds or notes issued in connection with the financing
2677 of the facility, if the trustee or lender, by inclusion or by
2678 amendment to the loan documents or by a separate contract with
2679 the office, agrees that the rights of residents under a
2680 continuing care or continuing care at-home contract will be
2681 honored and will not be disturbed by a foreclosure or conveyance
2682 in lieu thereof as long as the resident:
2683 1. Is current in the payment of all monetary obligations
2684 required by the contract;
2685 2. Is in compliance and continues to comply with all
2686 provisions of the contract; and
2687 3. Has asserted no claim inconsistent with the rights of
2688 the trustee or lender.
2689 (b) This subsection does not require a trustee or lender
2691 1. Continue to engage in the marketing or resale of new
2692 continuing care or continuing care at-home contracts;
2693 2. Pay any rebate of entrance fees as may be required by a
2694 resident’s continuing care or continuing care at-home contract
2695 as of the date of acquisition of the facility by the trustee or
2696 lender and until expiration of the period described in paragraph
2698 3. Be responsible for any act or omission of any owner or
2699 operator of the facility arising before the acquisition of the
2700 facility by the trustee or lender; or
2701 4. Provide services to the residents to the extent that the
2702 trustee or lender would be required to advance or expend funds
2703 that have not been designated or set aside for such purposes.
2704 (c) Should the office determine, at any time during the
2705 suspension of its remedial rights as provided in paragraph (a),
2706 that the trustee or lender is not in compliance with paragraph
2707 (a), or that a lender or trustee has assigned or has agreed to
2708 assign all or a portion of a delinquent or defaulted loan to a
2709 third party without the office’s written consent, the office
2710 shall notify the trustee or lender in writing of its
2711 determination, setting forth the reasons giving rise to the
2712 determination and specifying those remedial rights afforded to
2713 the office which the office shall then reinstate.
2714 (d) Upon acquisition of a facility by a trustee or lender
2715 and evidence satisfactory to the office that the requirements of
2716 paragraph (a) have been met, the office shall issue a 90-day
2717 temporary certificate of authority granting the trustee or
2718 lender the authority to engage in the business of providing
2719 continuing care or continuing care at-home and to issue
2720 continuing care or continuing care at-home contracts subject to
2721 the office’s right to immediately suspend or revoke the
2722 temporary certificate of authority if the office determines that
2723 any of the grounds described in s. 651.106 apply to the trustee
2724 or lender or that the terms of the contract used as the basis
2725 for the issuance of the temporary certificate of authority by
2726 the office have not been or are not being met by the trustee or
2727 lender since the date of acquisition.
2728 Section 31. Section 651.1141, Florida Statutes, is created
2729 to read:
2730 651.1141 Immediate final orders.—The Legislature finds that
2731 a violation of s. 651.024, s. 651.0245, s. 651.025, s.
2732 651.035(3), s. 651.036, s. 651.043, s. 651.083, or s. 651.105
2733 constitutes an immediate danger to the public health, safety, or
2734 welfare. Pursuant to s. 120.569, the office may issue an
2735 immediate final order to cease and desist if it finds that a
2736 provider is in violation of such sections.
2737 Section 32. Section 651.1151, Florida Statutes, is amended
2738 to read:
2739 651.1151 Administrative, vendor, and management contracts.—
2740 (1) The office may require A provider must to submit to the
2741 office any contract for administrative, vendor, or management
2742 services if the office has information and belief that a
2743 provider has entered into a contract with an affiliate, an
2744 entity controlled by the provider, or an entity controlled by an
2745 affiliate of the provider , which has not been disclosed to the
2746 office or which contract requires the provider to pay a fee that
2747 is unreasonably high in relation to the service provided.
2748 (2) The office may disapprove a contract for
2749 administrative, vendor, or management services if it finds that
2750 the fees to be paid are so unreasonably high as compared with
2751 similar contracts entered into by other providers in similar
2752 circumstances that the contract is detrimental to the facility
2753 or its residents.
2754 (3) (2) After review of the contract, the office may order
2755 the provider to cancel the contract in accordance with the terms
2756 of the contract and applicable law if it determines that the
2757 fees to be paid are so unreasonably high as compared with
2758 similar contracts entered into by other providers in similar
2759 circumstances that the contract is detrimental to the facility
2760 or its residents.
2761 (4) (3) Any contract with an affiliate, an entity controlled
2762 by the provider, or an entity controlled by an affiliate of the
2763 provider for administrative, vendor, or management services
2764 entered into or renewed after October 1, 1991 , must include a
2765 provision that the contract will be canceled upon issuance of an
2766 order by the office pursuant to this section. A copy of the
2767 current management services contract, pursuant to this section,
2768 if any, must be on file in the marketing office or other area
2769 accessible to residents and the appropriate residents’ council.
2770 (5) (4) Any action of the office under this section is
2771 subject to review pursuant to the procedures provided in chapter
2773 Section 33. Section 651.119, Florida Statutes, is amended
2774 to read:
2775 651.119 Assistance to persons affected by closure due to
2776 liquidation or pending liquidation.—
2777 (1) If a facility closes and ceases to operate as a result
2778 of liquidation or pending liquidation and residents are forced
2779 to relocate, the department shall become a creditor of the
2780 facility for the purpose of providing entrance fee refunds due
2781 to the cancellation of continuing care contracts of displaced
2782 residents, moving expenses for displaced residents, and such
2783 other care or services as is made possible by the unencumbered
2784 assets of the facility. To the extent that another provider
2785 provides, as approved by the office, direct assistance to such
2786 residents, the cost of such direct assistance shall be offset
2787 against reserves pursuant to subsection (4). The department
2788 shall provide proportional reimbursements of such costs to the
2789 respective providers from such unencumbered assets.
2790 (2) If the moneys and direct assistance made available
2791 under subsection (1) are not sufficient to cover moving costs,
2792 the office may seek voluntary contributions from the reserves
2793 maintained by providers under ss. 651.034 and 651.035 s. 651.035
2794 in amounts approved by the office to provide for the moving
2795 expenses of the residents in moving to another residence within
2796 the state.
2797 (3) If the moneys and direct assistance provided under
2798 subsections (1) and (2) are not sufficient to provide for
2799 entrance fee refunds due to the cancellation of continuing care
2800 contracts and the moving expenses of displaced residents in
2801 moving to other residences within the state, the office may levy
2802 pro rata assessments on the reserves of providers maintained
2803 under ss. 651.034 and 651.035 s. 651.035 for such entrance fee
2804 refunds and moving expenses of any displaced resident who lacks
2805 sufficient assets to pay for such moving expenses. The
2806 assessments for such entrance fee refunds and moving expenses on
2807 any particular provider may not exceed for any 12-month period
2808 an aggregate of 5 1 percent of the unencumbered portion of the
2809 reserves maintained by the provider under ss. 651.034 and
2810 651.035 s. 651.035. If the office determines that payment of an
2811 assessment under this subsection would impair the financial
2812 standing of a facility or its residents, the office may waive or
2813 temporarily defer all or part of the assessment with respect to
2814 that provider. The office shall apply any moneys voluntarily
2815 paid by a provider under subsection (1) or subsection (2) to
2816 satisfaction of assessments under this subsection.
2817 (4) The office shall permanently reduce the reserves
2818 required of a provider under s. 651.035 to the extent of the
2819 provider’s costs under subsection (1), voluntary contributions
2820 under subsection (2), and assessments under subsection (3) for a
2821 period of 3 years. However, the office shall thereafter raise
2822 the reserve requirements of a provider to the extent of
2823 reimbursements paid to the provider under subsection (1) unless
2824 such increase would raise the reserve requirement above the
2825 amount required under s. 651.035.
2826 (5) No payment, contribution, or assessment may be paid by
2827 a provider under this section if the release of funds from the
2828 reserves of the provider would violate a bond or lending
2829 commitment or covenant.
2830 (6) Moneys received under this section for the support of
2831 residents shall be kept in a separate fund maintained and
2832 administered by the department. The Continuing Care Advisory
2833 Council shall monitor the collection and use of such funds and
2834 shall advise the office or department on plans for resident
2835 relocation. The council shall seek the assistance of providers
2836 licensed under this chapter and other service providers in
2837 locating alternative housing and care arrangements.
2838 (7) The amount each displaced resident is entitled to
2839 receive under this section must be prorated based on the amount
2840 of available funds held by the department under this section and
2841 the calculation of the total amount that would be due the
2842 resident as a result of the cancellation of the resident’s
2843 continuing care contract. The refund amount paid to a displaced
2844 resident may not exceed $500,000 or the total amount due the
2845 resident as an entrance fee refund under the resident’s
2846 continuing care contract as a result of cancellation of that
2847 contract, whichever is lesser.
2848 (8) (7) For the purposes of this section, “moving expenses”
2849 means transportation expenses and the cost of packing and
2850 relocating personal belongings.
2851 (9) For the purposes of this section, the term “entrance
2852 fee refund” means the amount due the displaced resident under
2853 the terms of the resident’s continuing care contract as a result
2854 of the cancellation of the contract.
2855 Section 34. Subsections (1) and (4) of section 651.125,
2856 Florida Statutes, are amended to read:
2857 651.125 Criminal penalties; injunctive relief.—
2858 (1) Any person who maintains, enters into, or, as manager
2859 or officer or in any other administrative capacity, assists in
2860 entering into, maintaining, or performing any continuing care or
2861 continuing care at-home contract subject to this chapter without
2862 doing so in pursuance of a valid provisional certificate of
2863 authority or certificate of authority or renewal thereof, as
2864 contemplated by or provided in this chapter, or who otherwise
2865 violates any provision of this chapter or rule adopted in
2866 pursuance of this chapter, commits a felony of the third degree,
2867 punishable as provided in s. 775.082 or s. 775.083. Each
2868 violation of this chapter constitutes a separate offense.
2869 (4) Any action brought by the office against a provider
2870 shall not abate by reason of a sale or other transfer of
2871 ownership of the facility used to provide care, which provider
2872 is a party to the action, except with the express written
2873 consent of the director of the office.
2874 Section 35. Subsection (1) of section 651.131, Florida
2875 Statutes, is amended to read:
2876 651.131 Actions under prior law.—
2877 (1) With respect to any proceedings hereafter instituted by
2878 any person believing himself or herself to be aggrieved by a
2879 violation of any of the provisions of former s. 651.01, s.
2880 651.014, s. 651.019, s. 651.02, s. 651.021, s. 651.022, s.
2881 651.023, s. 651.024, s. 651.0261, s. 651.03, s. 651.033, s.
2882 651.035, s. 651.04, s. 651.05, s. 651.051, s. 651.055, s.
2883 651.06, s. 651.07, s. 651.071, s. 651.072, s. 651.074, s.
2884 651.076, s. 651.08, s. 651.09, s. 651.091, s. 651.10, s.
2885 651.105, s. 651.106, s. 651.107, s. 651.11, s. 651.114, s.
2886 651.115, s. 651.1151, s. 651.119, or s. 651.12, or s. 651.125,
2887 any resulting judgment shall be limited to the actual monetary
2888 loss suffered by such person plus reasonable attorney’s fees.
2889 Section 36. Section 651.132, Florida Statutes, is repealed.
2890 Section 37. Section 651.012, Florida Statutes, is amended
2891 to read:
2892 651.012 Exempted facility; written disclosure of
2893 exemption.—Any facility exempted under ss. 632.637(1)(e) and
2894 651.011(17) ss. 632.637(1)(e) and 651.011(12) must provide
2895 written disclosure of such exemption to each person admitted to
2896 the facility after October 1, 1996. This disclosure must be
2897 written using language likely to be understood by the person and
2898 must briefly explain the exemption.
2899 Section 38. Except as otherwise expressly provided in this
2900 act, this act shall take effect July 1, 2017.