New York Codes, Rules and Regulations › Title 11 - INSURANCE › Chapter XIII - Life Care Communities › Part 350 - Continuing Care Retirement Communities › Section 350.9 - Actuarial study

Current through Register Vol. 46, No. 28, July 10, 2024
(a) Once a
				continuing care retirement community has commenced operations, the first
				actuarial study shall be due within four months following the third fiscal year
				end that the community has been in operation. Thereafter, the continuing care
				retirement community shall submit a new actuarial study at least triennially
				and such study shall be due within four months of the close of the community's
				fiscal year. For each actuarial study, the current valuation date (reporting
				date) shall be the last day of the fiscal year just ended.
(b) A continuing care retirement community
				shall submit a new actuarial study upon request by the
				superintendent.
(c) An actuarial
				study shall contain at a minimum the following information:
(1) the name of the continuing care
				retirement community for which the study was prepared;
(2) the current valuation date of the
				study;
(3) the preparation date of
				the study;
(4)
(i) an opinion signed by a qualified
				consulting actuary that identifies the actuary and the scope of the project and
				opines on the following items:
(a) the
				appropriateness of the data and assumptions;
(b) whether the methods employed are
				consistent with sound actuarial principles and practices;
(c) the adequacy of the reserve liabilities
				and other liabilities;
(d) the
				adequacy of the fee schedule for each type of continuing care retirement
				contract and continuing care at home contract available to new residents to the
				community; and
(e) whether the
				community meets the definition of being in satisfactory actuarial balance, and
				the implications if the community does not meet the definition of being in
				satisfactory actuarial balance;
(ii) if the actuary does not express an
				opinion as to the accuracy and completeness of underlying listings and
				summaries used in the actuary's evaluation, there shall be attached to the
				actuarial study a statement by an officer of the continuing care retirement
				community, management company, or accounting firm, who prepared the underlying
				data, affirming that the listings and summaries prepared for and submitted to
				the actuary were prepared under the direction of the officer, and, to the best
				of the officer's knowledge and belief, are accurate and complete;
(iii) if the actuary is unable to form a
				needed opinion, or if the opinion is adverse or qualified, the statement of
				actuarial opinion and the actuarial study shall specifically state the
				reason;
(5) discussion
				of the various projection starting points, projection assumptions, and
				projection methodology, including but not limited to the following information:
(i) the resident entrance fees, resident
				monthly fees, and health center non resident fees assumed for the first
				projection year and the percentage change to the initial fees assumed for each
				projection year thereafter;
(ii)
				how the expenses for the first projection year were developed and the expense
				inflation rate assumed for each projection year thereafter;
(iii) investment income rate of return
				assumed for each projection year and the methodology used to project the
				investment income amounts;
(iv)
				interest rate used for discounting purposes in calculating the prospective
				reserve;
(v) interest rate used in
				calculating imputed interest;
(vi)
				assumptions and methodology used in the depreciation and amortization
				calculations including the assumed lifetimes for the class 2, 3 and 4 capital
				assets;
(vii) the different
				continuing care retirement contract types and different continuing care at home
				contract types that apply to current and new residents of the community and the
				methodology used to composite these different contract types in the projected
				data;
(viii) the mortality,
				morbidity, transfer and withdrawal factors;
(ix) methodology used in projecting the open
				group population and the closed group population;
(x) methodology used in projecting the annual
				cash flows;
(xi) methodology for
				allocating expenses to each of the levels of care;
(xii) methodology for determining projected
				Medicare, other insurance and third party reimbursements to the continuing care
				retirement community on behalf of residents;
(xiii) assumptions and methodology used for
				projecting the expense of using offsite facilities, if needed;
(xiv) any projected change to the part 1 paid
				in surplus or part 2 paid in surplus;
(xv) any projected distributions to the
				operator;
(xvi) any reliance by the
				continuing care retirement community on assistance from benevolence funds, an
				affiliate, or other outside source;
(xvii) any financial assistance subsidies
				assumed to apply to residents; and
(xviii) any material changes in actuarial
				assumptions or methodology from those used in the prior actuarial study
				prepared on behalf of the continuing care retirement community, to the extent
				known by the actuary;
(6) an actuarial balance sheet that shows the
				assets, liabilities and reserves as of the current valuation date. The
				actuarial balance sheet shall include the amount of the net surplus, and the
				amount of the earned surplus if different than the net surplus. The actuarial
				balance sheet shall include the amount of any part 1 paid in surplus or part 2
				paid in surplus if the amount is positive;
(7) a cash flow projection that shows the
				projected revenues, expenses, surplus distributions, and cash flows for at
				least the next 10 projection years assuming an open group projection method.
				The total projected amount of invested assets of the continuing care retirement
				community shall be shown as of the beginning and end of each projection
				year;
(8) a new resident cohort
				pricing analysis for each continuing care retirement contract type and each
				continuing care at home contract type available to new residents to the
				community;
(9) an exhibit showing
				the configuration of the continuing care retirement community for each
				projection year shown on the cash flow page of the actuarial study by each of
				the levels of care included in the community;
(10) the open group population flow
				projection by level of care for each projection year shown on the cash flow
				page of the actuarial study, including any projected use of offsite facilities.
				This shall include information sufficient to determine the number of
				independent living units occupied in total and the number of independent living
				units occupied by more than one person and the number of continuing care at
				home contracts, if applicable;
(11)
				an exhibit showing the expected time in whole and fractional years that a new
				resident to the community would spend in each of the levels of care and in
				total. This exhibit shall show information separately for male and female new
				residents and by assumed entry ages into the community of at least 70, 75, 80,
				85 and 90;
(12) an exhibit
				summarizing the distribution of residents as of the beginning of the first
				projection year by type of continuing care retirement contract and type of
				continuing care at home contract, by gender, by single versus joint occupancy
				status, and by level of care;
(13)
				an exhibit summarizing the expected distribution of new residents to the
				community by age and gender, by single versus joint occupancy status, and by
				type of continuing care retirement contract and continuing care at home
				contract;
(14) a summary by each
				independent living unit type of the assumed single versus joint occupancy
				percentage for such unit type, and over all the independent living units
				combined;
(15) documentation
				showing the development of the retrospective and prospective reserves as
				defined in section
				350.3 
				of this Part, and of the minimum liquid requirement as defined in section
				350.6(a) 
				of this Part, as of the valuation date of the study. The documentation shall
				include the closed group population projection used to develop the prospective
				reserve; and
(16) documentation of
				how the depreciation and amortization charges for the capital assets were
				developed. A summary shall be included showing the capital expenditures for
				each actual and projection year by class and assumed lifetime.