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Guide to the Regulation of Continuing Care Retirement Communities in Virginia

Here is a printable PDF version: Guide to the Regulation of Continuing Care Retirement Communities in Virginia

This Consumer's Guide should be used for educational purposes only. Nothing in this Guide is intended to be an opinion, legal or otherwise, of the State Corporation Commission, nor should it be construed as an endorsement of any product, service, person, or organization mentioned in this Guide.

IMPORTANT CONTACT INFORMATION

State Corporation Commission Bureau of Insurance & Company Licensing & Regulatory Compliance:

CCRC Resident Concerns & Issues

CCRC FILING REQUIREMENTS IN VIRGINIA

The State Corporation Commission's Bureau of Insurance has regulated Continuing Care Retirement Communities (“CCRCs”) in Virginia since July 1, 1985. Chapter 49 (Section 38.2-4900 et seq.) of Title 38.2 of the Code of Virginia (“the Code”) provides for regulatory oversight of CCRCs by the State Corporation Commission (“SCC”). Oversight includes ensuring that proper disclosures are made by the CCRC as well as monitoring the CCRC’s financial condition. The terms CCRC and provider are used in this guide interchangeably.

CCRCs are required to submit the following filings with the SCC Bureau of Insurance: 

Initial Registration and Disclosure Statement

  • Prior to operating in Virginia, every continuing care provider (“provider”) files a registration statement, disclosure statement, continuing care contracts, and audited financial statements. 
  • Bureau of Insurance staff has 90 days to complete the review of these documents for compliance with the Code requirements. 
  • Facilities under construction are required to file additional information regarding construction costs and financing. 

Annual Disclosure Statement 

  • Annually within four months of the provider’s fiscal year end, the provider is required to file an updated disclosure statement, continuing care contracts, and audited financial statements.
  • The annual filing is required to include a narrative describing material differences between the prior year’s pro forma income statement and the actual results of operations. 

Amended Disclosure Statement

  • Amended filings are required any time a provider determines an amendment is necessary due to a material change. 

The disclosure statements of providers registered in Virginia can be found under the Continuing Care Services section of the State Corporation Commission Bureau of Insurance's website.

COMPOSITION OF A DISCLOSURE STATEMENT

The disclosure statement includes a narrative description of the identity and experience of the provider, admission requirements, services provided, fees required, refund provisions, and complaint procedures. The disclosure statement also includes copies of the continuing care contracts, audited financial statements, and additional exhibits the provider may wish to include. 

A summary of each part of the disclosure statement may be found below: 
Narrative 

  • Information on the Continuing Care Provider 
    • Name, address, and business type of provider 
    • Ownership and control over provider 
    • Names and business addresses of officers, directors, and owners 
    • Business experience of provider, officers, directors, owners, and management 
    • Criminal, civil, or administrative convictions or investigations
  • Ownership of property and buildings
  • Location and description of property
  • Affiliation with religious, charitable, or nonprofit organizations and information on tax exemptions
  • Description of services provided under continuing care contracts
  • Fees required of residents 
    • Entrance fees and monthly fees 
    • Uses of fees 
    • Escrowing and refunding provisions 
    • Description of how the provider may adjust periodic fees 
    • Tables detailing rate changes
  • Reserve funding
  • Admission of residents
  • Access to facility by nonresidents
  • Information required for facilities under construction
  • Procedures on how to file a complaint or disclose any concern

Resident’s Contract 
The Bureau of Insurance reviews the continuing care contract to determine if the following provisions required by Section 38.2-4905 have been included:

  • Continuing care provided to each resident 
  • Details of values of property transferred by or for residents 
  • Specific details of services to be provided to residents 
  • Description of health and financial condition that may require resident to relinquish space 
  • Description of health and financial condition required to continue as resident
  • Current fees if resident marries and terms concerning spouse’s entry into the facility 
  • Description of good cause provision for cancellation of contract 
  • Details of refund provisions 
  • Terms for contract cancellation by death
  • Terms for at least 30 days advance notice before any changes in fees or services
  • Resident’s right to rescind the contract 
  • Resident’s rights prior to occupying the facility 

In accordance with Section 38.2-4928, the SCC shall have no jurisdiction to adjudicate controversies concerning CCRC contracts. 

Audited Financial Statements 

  • Certified financial statements of the provider including a balance sheet and income statement for the two most recent fiscal years are required.

Financial Monitoring 

  • The Bureau of Insurance reviews the audited financial statements to determine if, in the opinion of the auditor, the provider will remain as a going concern (be able to continue operations), and to determine the financial position of the provider.
  • In accordance with Section 38.2-4931, the SCC may issue an order to require the provider to cease and desist from engaging in any act or practice that constitutes a violation of the Chapter. The SCC may also issue a temporary or permanent injunction or a restraining order to enforce compliance with the Chapter. The SCC may issue an order to protect residents and prospective residents when the SCC determines that: 
    • A provider has been or will be unable to meet the pro forma income or cash flow projections filed and such failure may endanger its ability to perform its obligations. 
    • A provider is bankrupt, insolvent, under reorganization pursuant to federal bankruptcy laws, or in imminent danger of becoming bankrupt or insolvent.

RESIDENT'S RIGHTS

Residents are afforded the following rights under Chapter 49: 

To self-organize 

  • Residents shall have the right of self-organization. 
  • No retaliatory conduct is permitted against a resident for participating in a residents’ organization or filing a complaint. 

To receive copies of submissions 

  • A provider is required to provide all prospective residents with a copy of the disclosure statement at least three days prior to the execution of a continuing care contract. 
  • A provider is required to give the resident’s association a copy of all submissions made to the Commission. 
  • A provider is required to make available by written notice a copy of the annual or amended disclosure statement. 

To attend quarterly meetings 

  • The Board of Directors or its designated representative is required to hold meetings with residents at least quarterly. 
  • Residents must receive seven days’ notice of each meeting. 

To participate in free discussion of issues relating to the facility 

  • Issues may include income, expenditures, and financial matters as they apply to the facility and proposed changes in policies, programs, facilities, and services. 

To receive notification of a change in chief executive officer or management firm

  • Notification must be prompt.

COMPLAINTS

Read the Following Before Filling a Complaint 

If you have questions or are experiencing a problem with a provider, we are here to help. 

Before filing a complaint: 

  • Read your provider’s disclosure statement. 
  • Talk to your provider’s management. 

Once we receive your complaint, we will:

  • Acknowledge your complaint within a week and explain next steps. 
  • Ask the provider to explain and respond to us. Contact you when we have completed our review of the provider’s explanation and share our findings. 
  • Recommend actions that you can take if we do not have the regulatory authority to resolve the problem. 
  • Typically review your complaint within 45 days. 
    • Our review may take longer if your complaint is complex and requires extensive research. 

We cannot: 

  • Act as the complainant's attorney. 
  • Act as your legal representative or get involved in a pending lawsuit. 
  • Adjudicate controversies concerning CCRC contracts. 
  • Get involved with a provider’s management and a resident’s dispute on how best to run a facility or how resources are managed. 
  • Resolve disputes that do not involve a regulated entity's violation of a specific law or regulation (such as a matter concerning internal policies or guidelines).

SCC AUTHORITY AND CCRC REGULATION 

  • Continuing care is defined by Section 38.2-4900 as “. . . providing or committing to provide board, lodging and nursing services to an individual, other than an individual related by blood or marriage, (i) pursuant to an agreement effective for the life of the individual or for a period in excess of one year, including mutually terminable contracts, and (ii) in consideration of the payment of an entrance fee. A contract shall be deemed to be one offering nursing services, irrespective of whether such services are provided under such contract, if nursing services are offered to the resident entering such contract either at the facility in question or pursuant to arrangements specifically offered to residents of the facility. 
  • Continuing care also means providing or committing to provide lodging to an individual, other than an individual related by blood or marriage, (i) pursuant to an agreement effective for the life of the individual or for a period in excess of one year, including mutually terminable contracts, (ii) in consideration of the payment of an entrance fee, and (iii) where board and nursing services are made available to the resident by the provider, either directly or indirectly through affiliated persons, or through contractual arrangements, whether or not such services are specifically offered in the agreement for lodging.” 
  • Sections 38.2-4902 and 38.2-4904 require that certain disclosures be made in the disclosure statement. Section 38.2-4905 requires that certain provisions be included in the continuing care contract. Sections 38.2-4925 and 38.2-4931 provide for the financial monitoring of CCRCs and authorize the SCC to issue an order to restrain and enforce compliance with Chapter 49. Section 38.2-4932 allows the SCC to impose a fine or penalty on a provider for violating any provision of Chapter 49. These requirements are discussed in detail below in this guide. 
  • Section 38.2-4928 states that the SCC shall have no jurisdiction to adjudicate controversies concerning CCRC contracts.

RESOURCES

SCC Website Resources

Other Resources & Contact Information