2023 South Carolina Code of Laws › Title 37 - Consumer Protection Code › Chapter 11 - Licensing And Regulation Of Continuing Care Retirement Communities › Section 37-11-40. Determination of financial responsibility of applicant for license.

(A) Within sixty days of the receipt of a completed application for a license, the department shall determine whether the continuing care retirement community is financially responsible and can meet its obligations to residents or prospective residents.
(B) In making this determination for a license, the department may consider the project feasibility document provided pursuant to Section 37-11-30(B)(11), which is deemed trade secret and must include at least the following:
(1) a statement of the purpose and need for the facility;
(2) a description of the proposed facility, including the location, size, number of units to be constructed, anticipated completion date, and the proposed construction program;
(3) an identification and evaluation of the primary market areas and assumptions as to the secondary market areas, as well as the proposed unit sales per month;
(4) projected revenues from all sources, including:
(a) anticipated entrance fees;
(b) monthly service fees;
(c) nursing care rates, if applicable; and
(d) the total amount of financing required;
(5) projected expenses, including:
(a) staffing requirements and salaries;
(b) property, plant, and equipment costs, including depreciation expense;
(c) interest expense;
(d) marketing expenses; and
(e) other operating expenses;
(6) current assets and liabilities of the applicant;
(7) expectations of the financial condition of the facility, including the projected cash flow and a projected balance sheet and an estimate of the funds anticipated to be necessary to cover start-up losses;
(8) the inflation factor, if any, assumed in the study for the proposed facility and how and where it is applied;
(9) financial forecasts or projections prepared in accordance with standards promulgated by the American Institute of Certified Public Accountants, or in accordance with standards for feasibility studies for continuing care retirement communities promulgated by the Actuarial Standards Board, and an independent evaluation and opinion by the consultant who prepared the study of the underlying assumptions used as the basis for the forecasts or projections in the study. The study shall take into account facility costs, marketing projections, resident fees and charges, competition, resident contract provisions, and other factors which affect the feasibility of the study;
(10) an opinion letter prepared by the person who prepared the study as to the financial feasibility of the facility;
(11) the name, address, and telephone number of the person who prepared the feasibility study and the experience of the person in preparing similar studies or otherwise consulting in the field of continuing care; and
(12) a detailed written statement regarding the specific provisions taken, or to be taken, to enable the applicant to perform its obligations fully under contracts to provide continuing care. The provisions may include surety bonds, financial reserves, letters of credit, adequacy of working capital and actual and projected occupancy rates, and other financial arrangements or assurances as permitted in this section.
(C) In making this determination for a final license, the department may consider, without limitation, the following in addition to the items listed in subsection (B):
(1) the financial soundness of the arrangements for board, lodging, or medical, nursing, or health-related services and the schedule of charges used in connection with them;
(2) the adequacy of working capital;
(3) if the continuing care contract provides for services for the life of the person or for more than one year including mutually terminable contracts, a surety bond, financial reserves, letter of credit, or other financial arrangement to guarantee the performance of contractual obligations;
(4) an agreement with providers for the provision of health care or health-related services.
HISTORY: 1989 Act No. 97, Section 1; 1995 Act No. 19, Section 5; 2022 Act No. 197 (H.4983), Section 4, eff May 16, 2022.
Effect of Amendment
2022 Act No. 197, Section 4, rewrote the section.