New York Codes, Rules and Regulations
Title 11 - INSURANCE
Chapter XIII - Life Care Communities
Part 350 - Continuing Care Retirement Communities
Section 350.3 - Reserve liability calculation
Universal Citation: 11 NY Comp Codes Rules and Regs ยง 350.3
Current through Register Vol. 46, No. 39, September 25, 2024
At the end of each fiscal year, the sum of the actuarial reserve liabilities of a continuing care retirement community shall be at least as great as the greatest of the following:
(a) A retrospective reserve liability defined as an accumulation of not less than:
(1) the
entrance fees received; plus
(2)
the monthly fees received; plus
(3)
revenues received from nonresidents for services rendered (such as for health
care); plus
(4) interest and
dividend income received plus (minus) an adjustment for any difference between
interest and dividend income accrued at the end and beginning of the year from
assets eligible under section
350.6(a)(3) and
(c) of this Part; plus (minus)
(5) an adjustment for capital gains or losses
both realized and unrealized on assets eligible under section
350.6(a)(3) and
(c) of this Part for supporting reserve
liabilities; plus (minus)
(6)
adjustment for capital gains or losses realized on sale or disposal of class 3
capital assets; plus
(7) capital
gains both unrealized and realized on class 1 and class 2 capital assets;
minus
(8) capital losses both
unrealized and realized during the original assumed lifetime of class 1 and
class 2 capital assets; minus
(9)
the actual operating expenses, excluding any prepayment of expenses;
minus
(10) any refunds to residents
of either entrance fees or monthly fees; minus
(11) the capital expenses; minus
(12) the interest payment on any loans, bonds
or any other debt obligation, including the interest payments on the mortgage
and any interest attributed to Part 1 paid in surplus; minus
(13) the change in any unearned or advance
payment liability; minus
(14) the
expenses for nonresidents for services for which the revenues are included in
paragraph (3) of this subdivision; minus
(15) any releases of the excess of the
retrospective reserve over the prospective reserve approved under the
provisions of section
350.5 of this Part; plus or
minus
(16) any revenue or expense
that the operator can demonstrate as appropriate, subject to the approval of
the superintendent; minus
(17) any
profit credited to part 1 paid in surplus pursuant to section
350.7(c) of this
Part.
(b) A prospective reserve liability consisting of the following:
(1) amounts due and unpaid; plus
(2) the reserve for replacement as described
in section
350.4(a)-(b) of
this Part; plus
(3) the present
value of future operating expenses for services covered by the continuing care
retirement contract and continuing care at home contract; plus
(4) the present value of the following
expenses:
(i) future depreciation charges on
current and future capital (fixed) assets; and
(ii) future imputed investment income to be
credited each year to an amount equal to the depreciated value of the capital
assets less any debt and less any part 1 paid-in surplus; and
(iii) future interest payments, if not
included in paragraph (3) of this subdivision on loans, bonds or other debt
obligations used to acquire capital (fixed) assets and on part 1 paid in
surplus; and
(iv) future insurance
and taxes related to the capital (fixed) assets; and
(v) future cost of replacements (other than
that provided by paragraph (2) of this subdivision) and repairs to the extent
that such costs are not included in subparagraph (i) of this paragraph;
plus
(vi) future refund expenses;
minus
(5) the present
value of the future scheduled monthly fee payments; plus or minus
(6) the present value of any future expense
or revenue item that the operator can demonstrate as appropriate, subject to
the approval of the superintendent.
(c) The amount necessary to satisfy the requirements of section 350.6(a) of this Part.
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