Current through Register Vol. 46, No. 12, March 20, 2024
(a) In any
transactions between a continuing care retirement community and its parent
corporation or any affiliate or subsidiary:
(1) the terms of the financial transactions
shall be fair and equitable to the continuing care retirement community at the
time of the transaction;
(2)
charges or fees for services performed shall be reasonable; and
(3) expenses incurred and payments received
shall be allocated to the continuing care retirement community on an equitable
basis in conformity with customary accounting practices consistently
applied.
(b) The books,
accounts and records of each person to all such transactions shall be so
maintained as to clearly and accurately disclose the nature and details of the
transactions including accounting information as is necessary to support the
reasonableness of the charges or fees to the respective persons.
(c) Services to be provided to or by a
continuing care retirement community by or to its parent corporation, or any
affiliate or subsidiary shall be set forth in a services agreement signed by
the contracting persons.
(d) The
records, reports and accounts of each continuing care retirement community
shall be maintained separately from those of its parent corporation, affiliates
and subsidiaries.
(e) A continuing
care retirement community shall not guarantee the obligations of its parent
corporation or any affiliate or subsidiary.
(f)
(1) A
continuing care retirement community shall not enter into any of the following
transactions with its parent corporation or any affiliate or subsidiary unless
it has obtained the superintendent's prior approval of the transaction: sales,
purchases, exchanges, loans or extensions of credit, or investments, involving
five percent or more of the continuing care retirement community's total
assets, in excess of capital assets, as defined herein, at last
year-end.
(2) A continuing care
retirement community shall not enter into any of the following transactions
with its parent corporation or any affiliate or subsidiary unless the
continuing care retirement community has notified the superintendent in writing
of its intention to enter into any such transaction at least 30 days prior to
entering into the transaction and the superintendent has not disapproved it
within that period:
(i) sales, purchases,
exchanges, loans or extensions of credit, or investments involving less than
five percent of the continuing care retirement community's total assets, in
excess of capital assets, as defined herein, at last year-end;
(ii) rendering of services on a regular or
systematic basis;
(iii) any
management agreements, tax allocation agreements, service contracts, or cost
sharing arrangements; or
(iv) any
lease of real or personal property that does not provide for the rendering of
services on a regular and systematic basis.
(3) Nothing in this subdivision shall be
deemed to authorize or permit any transaction that would be otherwise contrary
to law.
(4) The superintendent, in
reviewing any transaction described in paragraph (1) or (2) of this subdivision
will consider whether the transaction complies with the standards set forth in
subdivisions (a) through (d) of this section and whether it may adversely
affect the interests of residents of that continuing care retirement
community.
(5) Any series of
transactions designed to evade the provisions of this subdivision shall be
subject to the filing requirements described in paragraph (1) or (2) of this
subdivision.
