The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Fiscal Policy
BILL: CS/SB 622
INTRODUCER: Banking and Insurance Committee and Senator Yarborough
SUBJECT: Continuing Care Contracts
DATE: April 24, 2023 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Johnson Knudson BI Fav/CS
2. Sanders Betta AEG Favorable
3. Johnson Yeatman FP Favorable
Please see Section IX. for Additional Information:
COMMITTEE SUBSTITUTE - Substantial Changes
I. Summary:
CS/SB 622 revises many provisions of ch. 651, Florida Statutes, of the Insurance Code
governing continuing care retirement communities1 (CCRC), which are regulated by the Office
of Insurance Regulation (OIR). The CCRCs provide lifelong housing, household assistance, and
nursing care in exchange for a significant entrance fee and monthly fees. A CCRC can include an
independent living apartment or house, as well as an assisted living facility or a nursing home.
The CCRCs may also offer at-home programs that provide residents CCRC services while
continuing to live in their own homes until they are ready to move to the CCRC. The CCRCs
appeal to older Americans because they offer an independent lifestyle for as long as possible but
also provide the reassurance that, as residents age or become unable to care for themselves, they
will receive the additional care they need.
The bill provides many changes relating to CCRCs, including regulatory oversight and
transparency for residents.
1
Continuing care retirement communities, also known as life plan communities, are a long-term care option for older people
who want to stay in the same place through different phases of the aging process. American Association of Retired Persons
(AARP), Family Caregiving Basics, How Continuing Care Retirement Communities Work (January 27, 2022),
https://www.aarp.org/caregiving/basics/info-2017/continuing-care-retirement-communities.html (last visited April 12, 2023).
BILL: CS/SB 622 Page 2
As it relates to regulatory oversight, the bill:
 Makes it easier for a provider to access escrowed resident fees as part of an expansion,
allowing access to the escrowed funds once 75 percent of the proposed units have been
reserved rather than once payment in full has been received for 50 percent of the units.
 Reduces the time for the OIR to approve or deny an expansion application from 45 days to
30 days from the date the application is deemed complete;
 Specifies when a provider is using an escrow account held pursuant to a trust indenture or
mortgage lien to meet its minimum liquid reserve requirement, the trust indenture, loan
agreement, or escrow agreement must require the provider, trustee, lender, escrow agent, or
another person designated to act in their place to notify the OIR in writing at least 10 days
before the withdrawal of any portion of the debt service reserve funds required to meet the
provider's minimum liquid reserve requirement. Further, the notice must include an affidavit
sworn to by the provider, the trustee, or a person designated to act in their place which
includes the amount of the scheduled debt service payment, the payment due date, the
amount of the withdrawal, the accounts from which the withdrawal will be made, and a plan
with a schedule for replenishing the withdrawn funds;
 Removes the requirement for a provider to obtain prior approval from the OIR to withdraw
funds from a debt service reserve required to be escrowed pursuant to a trust indenture of
mortgage lien if the funds will be used to pay principal and interest payments;
 Expands the types of financial institutions that can provide a letter of credit to a provider to
satisfy its minimum liquid reserve requirements by adding state-chartered financial
institutions as well as federally-chartered financial institutions;
 Allows a provider to assess a cancellation penalty against a person who signs a residency
contract and rescinds it within seven days if the person had previously signed a reservation
agreement and did not cancel it within 30 days; and
 Requires the OIR to commence examinations of CCRCs within 12 months after the end of
the most recent fiscal year covered by the examination. Further, the scope of the examination
may include events subsequent to the end of the most recent fiscal year and the events of any
prior period, which affects the present financial condition of the provider.
As it relates to transparency for residents, the bill:
 Clarifies a resident is eligible to participate in residents’ council matter, including elections,
if the person meets the definition of a resident, as provided in s. 651.011, F.S.;
 Requires a provider that owns or operates more than one facility in Florida to have a
designated resident representative at each facility;
 Requires that the designated resident representative to be notified by the provider at least
14 days in advance of any meeting of the full governing body at which the annual budget and
proposed changes in resident fees or services are on the agenda or will be discussed so that
the resident can attend and participate in that portion of the meeting;
 Requires each facility to provide written notice to the president or chair of the residents’
council within 10 business days after a change in management; and
 Requires each facility to provide a copy of the OIR final examination report and corrective
action plan, if applicable, to the president or chair of the residents’ council within 60 days
after issuance of the report.
BILL: CS/SB 622 Page 3
The bill has a significant negative impact on state revenues and expenditures. See Section V.
Fiscal Impact Statement.
II. Present Situation:
Continuing Care Retirement Communities (CCRC)
A provider2 or a CCRC offers shelter and nursing care or personal services upon the payment of
an entrance fee.3 The CCRCs offer a transitional approach to the aging process, accommodating
residents’ changing level of care. A CCRC can include an independent living apartment or a
house, as well as an assisted living facility or a nursing home. The CCRCs may also offer at-
home programs that provide residents CCRC services while continuing to live in their own
homes until they are ready to move to the CCRC.4 A CCRC enters into contracts with seniors
(residents) to provide housing and medical care in exchange for an entrance fee and monthly
fees. Entrance fees are a significant commitment by the resident as entrance fees range from
around $100,000 to over one million dollars.5
Regulation of CCRCs
In Florida, regulatory oversight responsibility of CCRCs is shared between the Agency for
Health Care Administration (AHCA) and the Office of Insurance Regulation (OIR).6 The OIR
regulates CCRC providers7 as specialty insurers. The AHCA regulates aspects of CCRCs related
to the provision of health care, such as nursing facilities, assisted living facilities, home health
agencies, quality of care, and medical facilities.8 There are currently 70 licensed continuing care
retirement communities in Florida.9
Oversight by the Office of Insurance Regulation
The OIR has primary responsibility to license, regulate, and monitor the operation of CCRCs and
to determine facilities’ financial condition and the management capabilities of their managers
and owners.10 Continuing care services are governed by a contract between the facility and the
resident of a CCRC, which is subject to approval by the OIR.11 As part of the regulation of
CCRCs, the OIR reviews applications for licensure, reviews expansion applications, conducts
solvency monitoring through the review of financial statements and other documents, monitors
minimum liquid reserve levels, and conducts examinations of each facility every three to five
2
Section 651.011(23), F.S., defines a provider as an owner or operator that provides continuing care.
3
Section 651.011(13), F.S.
4
Sections 651.057 and 651.118, F.S.
5
Office of Insurance Regulation, Senate Bill 622 Agency Legislative Analysis (Feb. 15, 2023) (on file with Senate Committee
on Banking and Insurance).
6
Chapter 651, F.S., and s. 20.121, F.S.
7
Section 651.011(12), F.S., a provider means an owner or operator.
8
Agency for Health Care Administration, available at https://quality.healthfinder.fl.gov/index.html (last viewed
April 12, 2023) and s. 651.118, F.S.
9
Office of Insurance Regulation, Presentation to the Continuing Care Advisory Council (2022), available at
https://floir.com/docs-sf/default-source/continuing-care-retirement-
communities/2022ccacpresentation.pdf?sfvrsn=5709d51b_2 last visited (April 12, 2023).
10
See ss. 651.021, 651.22, and 651.023, F.S.
11
Sections 651.055 and 651.057, F.S.
BILL: CS/SB 622 Page 4
years. It is a felony of the third degree for any person to maintain, enter into, or perform any
continuing care or continuing care at-home contract without actually having a valid provisional
Certificate of Authority (COA) or COA. One may not avoid such criminal liability by simply
being in pursuance of a COA.12
In order to operate a CCRC in Florida, a provider must generally obtain from the OIR a
certificate of authority predicated upon first receiving a provisional certificate of authority.13 A
provisional certificate of authority is issued once a provider meets the requirements prescribed in
s. 651.023, F.S. The application process for a provisional certificate of authority and a certificate
of authority involves submitting audited financial reports, feasibility studies, copies of contracts,
and other information.14 Further, the applicant must provide evidence the applicant is reputable
and of responsible character.15
The issuance of a provisional COA allows the applicant to collect entrance fees and reservation
deposits from prospective residents. All entrance fees and reservation deposits must be placed in
an escrow account or on deposit with the Department of Financial Services (DFS).16 The
requirements for a provisional COA application and a COA application17 require that the
feasibility study must show projections for the first five years of operations. For a provisional
COA, the preparer of the feasibility study may be the provider or a contracted third party. 18 Like
the provisional COA application, an application for a COA requires the submission of various
information, such as an audited financial report. For a COA application, a feasibility study must
be prepared by an independent consultant. If the feasibility study is prepared by an independent
certified public accountant (CPA), it must contain an examination opinion19 or a compilation
report20 containing financial forecasts and projections.
A COA may not be issued until documentation evidencing the project has a minimum of
50 percent of the units reserved for which the provider is charging an entrance fee is provided to
12
Section 651.125, F.S,
13
Section 651.022, F.S.
14
See ss. 651.021-651.023, F.S.
15
Section 651.022(2)(c), F.S.
16
Section 651.023(5), F.S.
17
Section 651.023, F.S.
18
Section 651.022 (3)(j), F.S., provides the preparer of the feasibility study for a provisional certificate of authority (COA)
may be the provider or a contracted third party.
19
This is undefined term in ch. 651, F.S.
20
An audit is the highest level of assurance service a certified public accountant (CPA) performs and is intended to provide a
user comfort on the accuracy of the financial statements. The CPA performs procedures in order to obtain “reasonable
assurance” (defined as a high but not absolute level of assurance) about whether the financial statements are free from
material misstatement. In contrast, the CPA does not obtain any assurance for a compilation because the CPA is not required
to verify the accuracy or completeness of the information provided or otherwise gather evidence for the purposes of
expressing an audit opinion or a review conclusion. The compilation report states the CPA did not audit or review the
financial statements and accordingly does not express an opinion, a conclusion or provide any assurance on them. American
Institute of Certified Public Accountants, Guide to Financial Statement Services: Compilation, Review and Audit, available
at
https://us.aicpa.org/content/dam/aicpa/interestareas/privatecompaniespracticesection/qualityservicesdelivery/keepingup/down
loadabledocuments/financial-statement-services-guide.pdf (last visited April 12, 2023)
BILL: CS/SB 622 Page 5
the OIR. For a COA application, in order for a unit to be considered reserved, the provider must
collect a minimum deposit of the lesser of $40,000 or 10 percent of the entrance fee.21
Applications
Consolidated Application for a Provisional Certificate of Authority and a Certificate of
Authority (COA) Applications
Section 651.0215, F.S., provides a consolidated application process, including requirements for
handling escrowed funds, in order for an applicant to obtain a COA without first obtaining a
provisional COA. The applicant must provide a feasibility study prepared by an independent
consultant22 as well as audited financial statements,23 and other specified information to the OIR.
If the feasibility study is conducted by an independent certified public accountant, it must
contain an examination report, or a compilation report24 acceptable to the OIR.
Expansion Applications
Section 651.0246, F.S., specifies the application process and information required to obtain
approval from the OIR for expansion. This section also provides automatic approval is granted
for expansions up to 35 percent of the existing units if the provider exceeds the statewide median
for days cash on hand, debt service coverage ratio, and total facility occupancy for the most
recent two consecutive reporting periods. In order to obtain this automatic approval, the provider
must submit a letter to the OIR indicating the planned number of units, the proposed sources and
uses of funds, and an attestation they understand and will comply with all minimum liquid
reserve and escrow account requirements.
A feasibility study, prepared by an independent certified public accountant, is required to be
submitted as part of an expansion application. The study includes an independent evaluation and
examination opinion as to whether the assumptions contained in the study are reasonable and the
project is feasible.25 A minimum of 75 percent of the moneys paid for all or any part of an initial
entrance fee or reservation deposit collected for units in the expansion and 50 percent of the
moneys paid for all or any part of an initial fee collected for continuing care at-home contracts in
the expansion must be placed in an escrow account or on deposit with the Department of
Financial Services (DFS), as prescribed in s. 651.033, F.S.26
The provider may secure release of the moneys held in escrow within seven days after the receipt
by the OIR of an affidavit by the provider the following conditions have been satisfied:
 A certificate of occupancy has been issued;
 The provider has received payment in full for at least 50 percent of the total units of a phase
or of the total of the combined phases constructed;
 Documents evidencing commitments have been secured or the provider’s long-term
financing has been approved by the OIR; and
21
Section 651.023(4)(b), F.S.
22
Section 651.0215(2)(b), F.S.
23
Section 651.0215(2)(f), F.S.
24
See supra note 19.
25
Section 651.0246(2)(a), F.S.
26
Section 651.0246(3), F.S.
BILL: CS/SB 622 Page 6
 Documents evidencing the provider has sufficient funds to meet the minimum liquid reserve
requirements of s. 651.035, F.S., which may include funds deposited in the initial entrance
fee account.27
Within 30 days after receipt of an application for expansion, the OIR must examine the
application and notify the applicant in writing, requesting any additional information.28 Within
15 days after the OIR receives all the requested info