CHAPTER 651

651.011 Definitions. As used in this chapter, the term: (1) “Actuarial opinion” means an opinion issued by an actuary in accordance with Actuarial Standard of Practice No. 3 for Continuing Care Retirement Communities, Revised Edition, effective May 1, 2011. (2) “Actuarial study” means an analysis prepared for an individual facility, or consolidated for multiple facilities, for either a certified provider, as of a current valuation date or the most recent fiscal year, or for an applicant, as of a projected future valuation date, which includes an actuary’s opinion as to whether such provider or applicant is in satisfactory actuarial balance in accordance with Actuarial Standard of Practice No. 3 for Continuing Care Retirement Communities, Revised Edition, effective May 1, 2011. (3) “Actuary” means an individual who is qualified to sign an actuarial opinion in accordance with the American Academy of Actuaries’ qualification standards and who is a member in good standing of the American Academy of Actuaries. (4) “Advertising” means the dissemination of written, visual, or electronic information by a provider, or any person affiliated with or controlled by a provider, to potential residents or their representatives for the purpose of inducing such persons to subscribe to or enter into a contract for continuing care or continuing care at-home. (5) “Continuing care” or “care” means, pursuant to a contract, furnishing shelter and nursing care or personal services to a resident who resides in a facility, whether such nursing care or personal services are provided in the facility or in another setting designated in the contract for continuing care, by an individual not related by consanguinity or affinity to the resident, upon payment of an entrance fee. (6) “Continuing Care Advisory Council” or “advisory council” means the council established in s. 651.121. (7) “Continuing care at-home” means, pursuant to a contract other than a contract described in subsection (5), furnishing to a resident who resides outside the facility the right to future access to shelter and nursing care or personal services, whether such services are provided in the facility or in another setting designated in the contract, by an individual not related by consanguinity or affinity to the resident, upon payment of an entrance fee. (8) “Controlling company” means any corporation, trust, or association that directly or indirectly owns 25 percent or more of: (a) The voting securities of one or more providers that are stock corporations; or (b) The ownership interest of one or more providers that are not stock corporations. (9) “Corrective order” means an order issued by the office which specifies corrective actions that the office determines are required in accordance with this chapter or commission rule. (10) “Days cash on hand” means the quotient obtained by dividing the value of paragraph (a) by the value of paragraph (b). (a) The sum of unrestricted cash, unrestricted short-term and long-term investments, provider restricted funds, and the minimum liquid reserve as of the reporting date. (b) Operating expenses less depreciation, amortization, and other noncash expenses and nonoperating losses divided by 365. Operating expenses, depreciation, amortization, and other noncash expenses and nonoperating losses are each the sum of their respective values over the 12-month period ending on the reporting date. With prior written approval of the office, a demand note or other parental guarantee may be considered a short-term or long-term investment for the purposes of paragraph (a). However, the total of all demand notes issued by the parent may not, at any time, be more than the sum of unrestricted cash and unrestricted short-term and long-term investments held by the parent. (11) “Debt service coverage ratio” means the quotient obtained by dividing the value of paragraph (a) by the value of paragraph (b). (a) The sum of total expenses less interest expense on the debt facility, depreciation, amortization, and other noncash expense and nonoperating losses, subtracted from the sum of total revenues, excluding noncash revenues and nonoperating gains, and gross entrance fees received less earned entrance fees and refunds paid. Expenses, interest expense on the debt facility, depreciation, amortization, and other noncash expense and nonoperating losses, revenues, noncash revenues, nonoperating gains, gross entrance fees, earned entrance fees, and refunds are each the sum of their respective values over the 12-month period ending on the reporting date. (b) Total annual principal and interest expense due on the debt facility over the 12-month period ending on the reporting date. For the purposes of this paragraph, principal excludes any balloon principal payment amounts, and interest expense due is the sum of the interest over the 12-month period ending on the reporting date. (12) “Department” means the Department of Financial Services. (13) “Designated resident representative” means a resident who has been elected by the residents’ council to represent residents on matters related to changes in fees or services as specified in s. 651.085(2) and (3). (14) “Entrance fee” means an initial or deferred payment of a sum of money or property made as full or partial payment for continuing care or continuing care at-home. An accommodation fee, admission fee, member fee, or other fee of similar form and application are considered to be an entrance fee. (15) “Facility” means a place where continuing care is furnished and may include one or more physical plants on a primary or contiguous site or an immediately accessible site. As used in this subsection, the term “immediately accessible site” means a parcel of real property separated by a reasonable distance from the facility as measured along public thoroughfares, and the term “primary or contiguous site” means the real property contemplated in the feasibility study required by this chapter. (16) “Impaired” or “impairment” means that either of the following has occurred: (a) A provider has failed to maintain its minimum liquid reserve as required under s. 651.035, unless the provider has received prior written approval from the office for a withdrawal pursuant to s. 651.035(6) and is compliant with the approved payment schedule. (b) Beginning January 1, 2021: 1. For a provider with mortgage financing from a third-party lender or a public bond issue, the provider’s debt service coverage ratio is less than 1.00:1 and the provider’s days cash on hand is less than 90; or 2. For a provider without mortgage financing from a third-party lender or public bond issue, the provider’s days cash on hand is less than 90. If the provider is a member of an obligated group having cross-collateralized debt, the obligated group’s debt service coverage ratio and days cash on hand must be used to determine if the provider is impaired. (17) “Insolvency” means the condition in which a provider is unable to pay its obligations as they come due in the normal course of business. (18) “Licensed” means that a provider has obtained a certificate of authority from the office. (19) “Manager,” “management,” or “management company” means a person who administers the day-to-day business operations of a facility for a provider, subject to the policies, directives, and oversight of the provider. (20) “Nursing care” means those services or acts rendered to a resident by an individual licensed or certified pursuant to chapter 464. (21) “Obligated group” means one or more entities that jointly agree to be bound by a financing structure containing security provisions and covenants applicable to the group. For the purposes of this subsection, debt issued under such a financing structure must be a joint and several obligation of each member of the group. (22) “Occupancy” means the total number of occupied independent living units, assisted living units, and skilled nursing beds in a facility divided by the total number of units and beds in that facility, excluding units and beds that are unavailable to market or that are reserved by prospective residents. (23) “Personal services” has the same meaning as in s. 429.02. (24) “Provider” means the owner or operator, whether a natural person, partnership or other unincorporated association, however organized, trust, or corporation, of an institution, building, residence, or other place, whether operated for profit or not, which owner or operator provides continuing care or continuing care at-home for a fixed or variable fee, or for any other remuneration of any type, whether fixed or variable, for the period of care, payable in a lump sum or lump sum and monthly maintenance charges or in installments. The term does not apply to an entity that has existed and continuously operated a facility located on at least 63 acres in this state providing residential lodging to members and their spouses for at least 66 years on or before July 1, 1989, and has the residential capacity of 500 persons, is directly or indirectly owned or operated by a nationally recognized fraternal organization, is not open to the public, and accepts only its members and their spouses as residents. (25) “Records” means all documents; correspondence; and financial, directory, and personnel information and data maintained by a provider pursuant to this chapter, regardless of the physical form, characteristics, or means of transmission. (26) “Regulatory action level event” means that any two of the following have occurred: (a) The provider’s debt service coverage ratio is less than the greater of the minimum ratio specified in the provider’s bond covenants or lending agreement for long-term financing or 1.20:1 as of the most recent annual report filed with the office pursuant to s. 651.026, or, if the provider does not have a debt service coverage ratio required by its lending institution, the provider’s debt service coverage ratio is less than 1.20:1 as of the most recent annual report filed with the office pursuant to s. 651.026. If the provider is a member of an obligated group having cross-collateralized debt, the obligated group’s debt service coverage ratio must be used as the provider’s debt service coverage ratio. (b) The provider’s days cash on hand is less than the greater of the minimum number of days cash on hand specified in the provider’s bond covenants or lending agreement for long-term financing or 100 days. If the provider does not have a days cash on hand required by its lending institution, the days cash on hand may not be less than 100 as of the most recent annual report filed with the office pursuant to s. 651.026. If the provider is a member of an obligated group having cross-collateralized debt, the days cash on hand of the obligated group must be used as the provider’s days cash on hand. (c) The occupancy of the provider’s facility is less than 80 percent averaged over the 12-month period immediately preceding the annual report filed with the office pursuant to s. 651.026. (27) “Resident” means a purchaser of, a nominee of, or a subscriber to a continuing care or continuing care at-home contract. Such contract does not give the resident a part ownership of the facility in which the resident is to reside, unless expressly provided in the contract. (28) “Residents’ council” means an organized body that represents the resident population of a certificated facility. A residents’ council shall serve as a liaison between residents and the appropriate representative of the provider. (29) “Shelter” means an independent living unit, room, apartment, cottage, villa, personal care unit, nursing bed, or other living area within a facility set aside for the exclusive use of one or more identified residents. History. — s. 1, ch. 77-323; s. 170, ch. 79-164; ss. 1, 25, ch. 81-292; s. 2, ch. 81-318; s. 3, ch. 83-265; ss. 1, 31, 33, 35, ch. 83-328; s. 1, ch. 91-98; s. 33, ch. 91-263; s. 12, ch. 93-22; s. 36, ch. 93-216; s. 2, ch. 96-363; s. 12, ch. 97-82; s. 1, ch. 97-229; s. 1662, ch. 2003-261; s. 99, ch. 2006-197; s. 1, ch. 2010-202; s. 1, ch. 2011-193; s. 1, ch. 2019-160; s. 1, ch. 2023-295. 651.012 Exempted facility; written disclosure of exemption. Any facility exempted under s. 632.637(1)(e) or excluded from the definition of the term “provider” in s. 651.011 must provide written disclosure of such exemption to each person admitted to the facility. This disclosure must be written using language likely to be understood by the person and must briefly explain the exemption. History. — s. 3, ch. 96-363; s. 1663, ch. 2003-261; s. 2, ch. 2010-202; s. 2, ch. 2011-193; s. 2, ch. 2019-160; s. 2, ch. 2023-295. 651.013 Chapter exclusive; applicability of other laws. (1) Except as herein provided, providers of continuing care and continuing care at-home are governed by the provisions of this chapter and are exempt from all other provisions of the Florida Insurance Code. (2) In addition to other applicable provisions cited in this chapter, the office has the authority granted under ss. 624.302, 624.303, 624.307-624.312, 624.318, 624.319(1)-(3), 624.320, 624.321, 624.324, 624.34, and 624.422 of the Florida Insurance Code to regulate providers of continuing care and continuing care at-home. History. — ss. 31, 52, ch. 85-321; s. 12, ch. 93-22; s. 2, ch. 97-229; s. 1664, ch. 2003-261; s. 140, ch. 2004-5; s. 3, ch. 2011-193; s. 3, ch. 2019-160. 651.014 Insurance business not authorized. Nothing in the Florida Insurance Code or this chapter shall be deemed to authorize any provider of a continuing care facility to transact any insurance business other than that of continuing care insurance or otherwise to engage in any other type of insurance unless it is authorized under a certificate of authority issued by the office under the provisions of the Florida Insurance Code. History. — ss. 32, 52, ch. 85-321; s. 12, ch. 93-22; s. 1665, ch. 2003-261. 651.015 Administration; forms; fees; rules; fines. The administration of this chapter is vested in the commission, office, and department, which shall: (1) Prepare and furnish all forms necessary under the provisions of this chapter in relation to applications for provisional certificates of authority, certificates of authority or renewals thereof, statements, examinations, and other required reports. The office is authorized to accept any application statement, report, or information submitted electronically or by facsimile to comply with requirements in this chapter or rules adopted under this section. The commission may adopt rules to implement the provisions of this subsection. (2) Collect in advance, and the applicant shall pay in advance, the following fees: (a) At the time of filing an application for a certificate of authority, an application fee in the amount of $75 for each facility. (b) At the time of filing the annual report required by s. 651.026, a fee in the amount of $100 for each year or part thereof for each facility. (c) A late fee not to exceed $50 a day for each day of noncompliance. (d) A fee to cover the actual cost of a credit report and fingerprint processing. (e) At the time of filing an application for a provisional certificate of authority, a fee in the amount of $50. (3) Adopt rules pursuant to ss. 120.536(1) and 120.54 to implement the provisions of this chapter. (4) Impose administrative fines and penalties pursuant to this chapter. (5) Deposit all fees and fines collected under the provisions of this chapter into the Insurance Regulatory Trust Fund. History. — s. 1, ch. 77-323; s. 249, ch. 79-400; ss. 2, 25, ch. 81-292; s. 2, ch. 81-318; s. 3, ch. 83-265; ss. 2, 31, 33, 35, ch. 83-328; s. 1, ch. 87-136; s. 12, ch. 93-22; s. 3, ch. 97-229; s. 217, ch. 98-200; s. 1, ch. 2002-222; s. 1666, ch. 2003-261. 651.018 Administrative supervision. The office may place a facility in administrative supervision pursuant to part VI of chapter 624. History. — ss. 2, 16, ch. 91-98; s. 12, ch. 93-22; s. 1667, ch. 2003-261. 651.019 New financing, additional financing, or refinancing. (1)(a) A provider shall provide a written general outline of the amount and the anticipated terms of any new financing or refinancing, and the intended use of proceeds, to the residents’ council at least 30 days before the closing date of the financing or refinancing transaction. If there is a material change in the noticed information, a provider shall provide an updated notice to the residents’ council within 10 business days after the provider becomes aware of such change. (b) If the facility does not have a residents’ council, the facility must make available, in the same manner as other community notices, the information required under paragraph (a). (2) Within 30 days after the closing date of such financing or refinancing transaction, the provider shall submit to the office copies of executed financing documents, escrow or trust agreements prepared in support of such financing or refinancing transaction, and a copy of all documents required to be submitted to the residents’ council under paragraph (1)(a). History. — ss. 3, 16, ch. 91-98; s. 12, ch. 93-22; s. 1668, ch. 2003-261; s. 4, ch. 2019-160. 651.021 Certificate of authority required. A person may not engage in the business of providing continuing care, issuing contracts for continuing care or continuing care at-home, or constructing a facility for the purpose of providing continuing care in this state without a certificate of authority obtained from the office as provided in this chapter. This section does not prohibit the preparation of a construction site or construction of a model residence unit for marketing purposes, or both. The office may allow the purchase of an existing building for the purpose of providing continuing care if the office determines that the purchase is not being made to circumvent the prohibitions in this section. History. — s. 1, ch. 77-323; ss. 3, 25, ch. 81-292; s. 2, ch. 81-318; s. 3, ch. 83-265; ss. 3, 31, 33, 35, ch. 83-328; s. 1, ch. 86-209; s. 1, ch. 89-363; ss. 1, 12, ch. 93-22; s. 275, ch. 99-8; s. 1669, ch. 2003-261; s. 4, ch. 2011-193; s. 5, ch. 2019-160. 651.0215 Consolidated application for a provisional certificate of authority and a certificate of authority; required restrictions on use of entrance fees. (1) For an applicant to qualify for a certificate of authority without first obtaining a provisional certificate of authority, all of the following conditions must be met: (a) All reservation deposits and entrance fees must be placed in escrow in accordance with s. 651.033. The applicant may not use or pledge any part of an initial entrance fee for the construction or purchase of the facility or as security for long-term financing. (b) The reservation deposit may not exceed the lesser of $40,000 or 10 percent of the then-current fee for the unit selected by a resident and must be refundable at any time before the resident takes occupancy of the selected unit. (c) The resident contract must state that collection of the balance of the entrance fee is to occur after the resident is notified that his or her selected unit is available for occupancy and on or before the occupancy date. (2) The consolidated application must be on a form prescribed by the commission and must contain all of the following information: (a) All of the information required under s. 651.022(2). (b) A feasibility study prepared by an independent consultant which contains all of the information required by s. 651.022(3) and financial forecasts or projections prepared in accordance with standards adopted by the American Institute of Certified Public Accountants or in accordance with standards for feasibility studies for continuing care retirement communities adopted by the Actuarial Standards Board. 1. The feasibility study must take into account project costs, actual marketing results to date and marketing projections, resident fees and charges, competition, resident contract provisions, and other factors that affect the feasibility of operating the facility. 2. If the feasibility study is prepared by an independent certified public accountant, it must contain an examination report, or a compilation report acceptable to the office, containing a financial forecast or projections for the first 5 years of operations which take into account an actuary’s mortality and morbidity assumptions as the study relates to turnover, rates, fees, and charges. If the study is prepared by an independent consulting actuary, it must contain mortality and morbidity assumptions as it relates to turnover, rates, fees, and charges and an actuary’s signed opinion that the project as proposed is feasible and that the study has been prepared in accordance with Actuarial Standard of Practice No. 3 for Continuing Care Retirement Communities, Revised Edition, effective May 1, 2011. (c) Documents evidencing that commitments have been secured for construction financing and long-term financing or that a documented plan acceptable to the office has been adopted by the applicant for long-term financing. (d) Documents evidencing that all conditions of the lender have been satisfied to activate the commitment to disburse funds, other than the obtaining of the certificate of authority, the completion of construction, or the closing of the purchase of realty or buildings for the facility. (e) Documents evidencing that the aggregate amount of entrance fees received by or pledged to the applicant, plus anticipated proceeds from any long-term financing commitment and funds from all other sources in the actual possession of the applicant, equal at least 100 percent of the aggregate cost of constructing or purchasing, equipping, and furnishing the facility plus 100 percent of the anticipated startup losses of the facility. (f) A complete audited financial report of the applicant, prepared by an independent certified public accountant in accordance with generally accepted accounting principles, as of the date the applicant commenced business operations or for the fiscal year that ended immediately preceding the date of application, whichever is later; and complete unaudited quarterly financial statements attested to by the applicant after the date of the last audit. (g) Documents evidencing that the applicant will be able to comply with s. 651.035. (h) Such other reasonable data, financial statements, and pertinent information as the commission or office may require with respect to the applicant or the facility to determine the financial status of the facility and the management capabilities of its managers and owners. If any material change occurs in the facts set forth in an application filed with the office pursuant to this subsection, an amendment setting forth such change must be filed with the office within 10 business days after the applicant becomes aware of such change, and a copy of the amendment must be sent by registered mail to the principal office of the facility and to the principal office of the controlling company. (3) If an applicant has or proposes to have more than one facility offering continuing care or continuing care at-home, a separate certificate of authority must be obtained for each facility. (4) Within 45 days after receipt of the information required under subsection (2), the office shall examine the information and notify the applicant in writing, specifically requesting any additional information that the office is authorized to require. An application is deemed complete when the office receives all requested information and the applicant corrects any error or omission of which the applicant was timely notified or when the time for such notification has expired. Within 15 days after receipt of all of the requested additional information, the office shall notify the applicant in writing that all of the requested information has been received and that the application is deemed complete as of the date of the notice. Failure to notify the applicant in writing within the 15-day period constitutes acknowledgment by the office that it has received all requested additional information, and the application is deemed complete for purposes of review on the date the applicant files all of the required additional information. (5) Within 45 days after an application is deemed complete as set forth in subsection (4) and upon completion of the remaining requirements of this section, the office shall complete its review and issue or deny a certificate of authority to the applicant. If a certificate of authority is denied, the office shall notify the applicant in writing, citing the specific failures to satisfy this chapter, and the applicant is entitled to an administrative hearing pursuant to chapter 120. (6) The office shall issue a certificate of authority upon determining that the applicant meets all of the requirements of law and has submitted all of the information required under this section, that all escrow requirements have been satisfied, and that the fees prescribed in s. 651.015(2) have been paid. (7) The issuance of a certificate of authority entitles the applicant to begin construction and collect reservation deposits and entrance fees from prospective residents. The reservation contract must state the cancellation policy and the terms of the continuing care contract. All or any part of an entrance fee or reservation deposit collected must be placed in an escrow account or on deposit with the department pursuant to s. 651.033. (8) The provider is entitled to secure release of the moneys held in escrow within 7 days after the office receives an affidavit from the provider, along with appropriate documentation to verify, and notification is provided to the escrow agent by certified mail, that all of the following conditions have been satisfied: (a) A certificate of occupancy has been issued. (b) Payment in full has been received for at least 70 percent of the total units of a phase or of the total of the combined phases constructed. If a provider offering continuing care at-home is applying for a release of escrowed entrance fees, the same minimum requirement must be met for the continuing care contracts and for the continuing care at-home contracts independently of each other. (c) The provider has evidence of sufficient funds to meet the requirements of s. 651.035, which may include funds deposited in the initial entrance fee account. (d) Documents evidencing the intended application of the proceeds upon release and documents evidencing that the entrance fees, when released, will be applied as represented to the office. Notwithstanding chapter 120, only the provider, the escrow agent, and the office have a substantial interest in any office decision regarding release of escrow funds in any proceedings under chapter 120 or this chapter. (9) The office may not approve any application that includes in the plan of financing any encumbrance of the operating reserves or renewal and replacement reserves required by this chapter. (10) The office may not issue a certificate of authority for a facility that does not have a component that is to be licensed pursuant to part II of chapter 400 or part I of chapter 429, or that does not offer personal services or nursing services through written contractual agreement. A written contractual agreement must be disclosed in the contract for continuing care or continuing care at-home and is subject to s. 651.1151. History. — s. 6, ch. 2019-160. 651.022 Provisional certificate of authority; application. (1) Each applicant for a certificate of authority shall first apply for and obtain a provisional certificate of authority pursuant to this section. (2) The application for a provisional certificate of authority must be on a form prescribed by the commission and must contain the following information: (a) If the applicant or provider is a corporation, a copy of the articles of incorporation and bylaws; if the applicant or provider is a partnership or other unincorporated association, a copy of the partnership agreement, articles of association, or other membership agreement; and, if the applicant or provider is a trust, a copy of the trust agreement or instrument. (b) The full names, residences, and business addresses of: 1. The proprietor, if the applicant or provider is an individual. 2. Every partner or member, if the applicant or provider is a partnership or other unincorporated association, however organized, having fewer than 50 partners or members, together with the business name and address of the partnership or other organization. 3. The principal partners or members, if the applicant or provider is a partnership or other unincorporated association, however organized, having 50 or more partners or members, together with the business name and business address of the partnership or other organization. If such unincorporated organization has officers and a board of directors, the full name and business address of each officer and director may be set forth in lieu of the full name and business address of its principal members. 4. The corporation and each officer and director thereof, if the applicant or provider is a corporation. 5. Every trustee and officer, if the applicant or provider is a trust. 6. The manager, whether an individual, corporation, partnership, or association. 7. Any stockholder holding at least a 10 percent interest in the operations of the facility in which the care is to be offered. 8. Any person whose name is required to be provided in the application under this paragraph and who owns any interest in or receives any remuneration from, directly or indirectly, any professional service firm, association, trust, partnership, or corporation providing goods, leases, or services to the facility for which the application is made, with a real or anticipated value of $10,000 or more, and the name and address of the professional service firm, association, trust, partnership, or corporation in which such interest is held. The applicant shall describe such goods, leases, or services and the probable cost to the facility or provider and shall describe why such goods, leases, or services should not be purchased from an independent entity. 9. Any person, corporation, partnership, association, or trust owning land or property leased to the facility, along with a copy of the lease agreement. 10. Any affiliated parent or subsidiary corporation or partnership. (c)1. Evidence that the applicant is reputable and of responsible character. If the applicant is a firm, association, organization, partnership, business trust, corporation, or company, the form must require evidence that the members or shareholders and the person in charge of providing care under a certificate of authority are reputable and of responsible character. 2. Evidence satisfactory to the office of the ability of the applicant to comply with this chapter and with rules adopted by the commission pursuant to this chapter. 3. A statement of whether a person identified in the application for a provisional certificate of authority or the administrator or manager of the facility, if such person has been designated, or any such person living in the same location: a. Has been convicted of a felony or has pleaded nolo contendere to a felony charge, or has been held liable or has been enjoined in a civil action by final judgment, if the felony or civil action involved fraud, embezzlement, fraudulent conversion, or misappropriation of property. b. Is subject to a currently effective injunctive or restrictive order or federal or state administrative order relating to business activity or health care as a result of an action brought by a public agency or department, including, without limitation, an action affecting a license under chapter 400 or chapter 429. The statement must set forth the court or agency, the date of conviction or judgment, and the penalty imposed or damages assessed, or the date, nature, and issuer of the order. Before determining whether a provisional certificate of authority is to be issued, the office may make an inquiry to determine the accuracy of the information submitted pursuant to subparagraphs 1., 2., and 3. (d) The contracts for continuing care and continuing care at-home to be entered into between the provider and residents which meet the minimum requirements of s. 651.055 or s. 651.057 and which include a statement describing the procedures required by law relating to the release of escrowed entrance fees. Such statement may be furnished through an addendum. (e) Any advertisement or other written material proposed to be used in the solicitation of residents. (f) Such other reasonable data, financial statements, and pertinent information as the commission or office may reasonably require with respect to the provider or the facility, including the most recent audited financial report of comparable facilities currently or previously owned, managed, or developed by the applicant or its principal, to assist in determining the financial viability of the project and the management capabilities of its managers and owners. (g) The forms of the residency contracts, reservation contracts, escrow agreements, and wait list contracts, if applicable, which are proposed to be used by the provider in the furnishing of care. The office shall approve contracts and escrow agreements that comply with ss. 651.023(1)(c), 651.033, 651.055, and 651.057. Thereafter, no other form of contract or agreement may be used by the provider until it has been submitted to the office and approved. If any material change occurs in the facts set forth in an application filed with the office pursuant to this subsection, an amendment setting forth such change must be filed with the office within 10 business days after the applicant becomes aware of such change, and a copy of the amendment must be sent by registered mail to the principal office of the facility and to the principal office of the controlling company. (3) In addition to the information required in subsection (2), an applicant for a provisional certificate of authority shall submit a feasibility study with appropriate financial, marketing, and actuarial assumptions for the first 5 years of operations. The feasibility study must include at least the following information: (a) A description of the proposed facility, including the location, size, anticipated completion date, and the proposed construction program. (b) An identification and evaluation of the primary and, if appropriate, the secondary market areas of the facility and the projected unit sales per month. (c) Projected revenues, including anticipated entrance fees; monthly service fees; nursing care revenues, if applicable; and all other sources of revenue. (d) Projected expenses, including staffing requirements and salaries; cost of property, plant, and equipment, including depreciation expense; interest expense; marketing expense; and other operating expenses. (e) A projected balance sheet. (f) Expectations of the financial condition of the project, including the projected cash flow, and an estimate of the funds anticipated to be necessary to cover startup losses. (g) The inflation factor, if any, assumed in the feasibility study for the proposed facility and how and where it is applied. (h) Project costs and the total amount of debt financing required, marketing projections, resident fees and charges, the competition, resident contract provisions, and other factors that affect the feasibility of the facility. (i) Appropriate population projections, including morbidity and mortality assumptions. (j) The name of the person who prepared the feasibility study and the experience of such person in preparing similar studies or otherwise consulting in the field of continuing care. The preparer of the feasibility study may be the provider or a contracted third party. (k) Any other information that the applicant deems relevant and appropriate to enable the office to make a more informed determination. (4) If an applicant has or proposes to have more than one facility offering continuing care or continuing care at-home, a separate provisional certificate of authority and a separate certificate of authority must be obtained for each facility. (5)(a) Within 30 days after receipt of an application for a provisional certificate of authority, the office shall examine the application and shall notify the applicant in writing, specifically setting forth and specifically requesting any additional information the office is permitted by law to require. If the application submitted is determined by the office to be substantially incomplete so as to require substantial additional information, including biographical information, the office may return the application to the applicant with a written notice that the application as received is substantially incomplete and, therefore, unacceptable for filing without further action required by the office. Any filing fee received shall be refunded to the applicant. (b) Within 15 days after receipt of all of the requested additional information, the office shall notify the applicant in writing that all of the requested information has been received and the application is deemed to be complete as of the date of the notice. Failure to so notify the applicant in writing within the 15-day period shall constitute acknowledgment by the office that it has received all requested additional information, and the application shall be deemed to be complete for purposes of review upon the date of the filing of all of the requested additional information. (6) Within 45 days after the date an application is deemed complete as set forth in paragraph (5)(b), the office shall complete its review and issue a provisional certificate of authority to the applicant based upon its review and a determination that the application meets all requirements of law, that the feasibility study was based on sufficient data and reasonable assumptions, and that the applicant will be able to provide continuing care or continuing care at-home as proposed and meet all financial and contractual obligations related to its operations, including the financial requirements of this chapter. If the application is denied, the office shall notify the applicant in writing, citing the specific failures to meet the provisions of this chapter. Such denial entitles the applicant to a hearing pursuant to chapter 120. (7) The issuance of a provisional certificate of authority entitles the applicant to collect entrance fees and reservation deposits from prospective residents. All or any part of an entrance fee or deposit collected shall be placed in an escrow account or on deposit with the department, pursuant to s. 651.033, until a certificate of authority is issued by the office. (8) The office may not approve any application that includes in the plan of financing any encumbrance of the operating reserves or renewal and replacement reserves required by this chapter. History. — ss. 4, 33, ch. 83-328; s. 35, ch. 85-62; s. 42, ch. 85-321; s. 2, ch. 87-136; s. 2, ch. 89-363; s. 2, ch. 92-56; s. 12, ch. 93-22; s. 4, ch. 97-229; s. 1670, ch. 2003-261; s. 100, ch. 2006-197; s. 3, ch. 2010-202; s. 5, ch. 2011-193; s. 7, ch. 2019-160. 651.023 Certificate of authority; application. (1) After issuance of a provisional certificate of authority, the office shall issue to the holder of such provisional certificate a certificate of authority if the holder of the provisional certificate provides the office with the following information: (a) Any material change in status with respect to the information required to be filed under s. 651.022(2) in the application for the provisional certificate. (b) A feasibility study prepared by an independent consultant which contains all of the information required by s. 651.022(3) and financial forecasts or projections prepared in accordance with standards adopted by the American Institute of Certified Public Accountants or in accordance with standards for feasibility studies or continuing care retirement communities adopted by the Actuarial Standards Board. 1. The study must take into account project costs, actual marketing results to date and marketing projections, resident fees and charges, competition, resident contract provisions, and any other factors which affect the feasibility of operating the facility. 2. If the study is prepared by an independent certified public accountant, it must contain an examination opinion or a compilation report acceptable to the office containing a financial forecast or projections for the first 5 years of operations which take into account an actuary’s mortality and morbidity assumptions as the study relates to turnover, rates, fees, and charges. If the study is prepared by an independent consulting actuary, it must contain mortality and morbidity assumptions as the study relates to turnover, rates, fees, and charges and an actuary’s signed opinion that the project as proposed is feasible and that the study has been prepared in accordance with standards adopted by the American Academy of Actuaries. (c) Subject to subsection (4), a provider may submit an application for a certificate of authority and any required exhibits upon submission of documents evidencing that the project has a minimum of 30 percent of the units reserved for which the provider is charging an entrance fee. (d) Documents evidencing that commitments have been secured for both construction financing and long-term financing or a documented plan acceptable to the office has been adopted by the applicant for long-term financing. (e) Documents evidencing that all conditions of the lender have been satisfied to activate the commitment to disburse funds other than the obtaining of the certificate of authority, the completion of construction, or the closing of the purchase of realty or buildings for the facility. (f) Documents evidencing that the aggregate amount of entrance fees received by or pledged to the applicant, plus anticipated proceeds from any long-term financing commitment, plus funds from all other sources in the actual possession of the applicant, equal at least 100 percent of the aggregate cost of constructing or purchasing, equipping, and furnishing the facility plus 100 percent of the anticipated startup losses of the facility. (g) A complete audited financial report of the applicant, prepared by an independent certified public accountant in accordance with generally accepted accounting principles, as of the date the applicant commenced business operations or for the fiscal year that ended immediately preceding the date of application, whichever is later, and complete unaudited quarterly financial statements attested to by the applicant after the date of the last audit. (h) Documents evidencing that the applicant has complied with the escrow requirements of subsection (5) or subsection (7) and will be able to comply with s. 651.035. (i) Such other reasonable data, financial statements, and pertinent information as the commission or office may require with respect to the applicant or the facility, to determine the financial status of the facility and the management capabilities of its managers and owners. If any material change occurs in the facts set forth in an application filed with the office pursuant to this subsection, an amendment setting forth such change must be filed with the office within 10 business days after the applicant becomes aware of such change, and a copy of the amendment must be sent by registered mail to the principal office of the facility and to the principal office of the controlling company. (2) Within 30 days after receipt of the information required under subsection (1), the office shall examine such information and notify the provider in writing, specifically requesting any additional information the office is permitted by law to require. Within 15 days after receipt of all of the requested additional information, the office shall notify the provider in writing that all of the requested information has been received and the application is deemed to be complete as of the date of the notice. Failure to notify the applicant in writing within the 15-day period constitutes acknowledgment by the office that it has received all requested additional information, and the application shall be deemed complete for purposes of review on the date of filing all of the required additional information. (3) Within 45 days after an application is deemed complete as set forth in subsection (2), and upon completion of the remaining requirements of this section, the office shall complete its review and issue or deny a certificate of authority to the holder of a provisional certificate of authority. If a certificate of authority is denied, the office must notify the holder of the provisional certificate in writing, citing the specific failures to satisfy the provisions of this chapter. If denied, the holder of the provisional certificate is entitled to an administrative hearing pursuant to chapter 120. (4) The office shall issue a certificate of authority upon determining that the applicant meets all requirements of law and has submitted all of the information required by this section, that all escrow requirements have been satisfied, and that the fees prescribed in s. 651.015(2) have been paid. (a) A certificate of authority may not be issued until documentation evidencing that the project has a minimum of 50 percent of the units reserved for which the provider is charging an entrance fee is provided to the office. If a provider offering continuing care at-home is applying for a certificate of authority, the same minimum reservation requirements must be met for the continuing care and continuing care at-home contracts, independently of each other. (b) In order for a unit to be considered reserved under this section, the provider must collect a minimum deposit of the lesser of $40,000 or 10 percent of the then-current entrance fee for that unit, and may assess a forfeiture penalty of 2 percent of the entrance fee due to termination of the reservation contract after 30 days for any reason other than the death or serious illness of the resident, the failure of the provider to meet its obligations under the reservation contract, or other circumstances beyond the control of the resident that equitably entitle the resident to a refund of the resident’s deposit. The reservation contract must state the cancellation policy and the terms of the continuing care or continuing care at-home contract to be entered into. (5) Up to 25 percent of the moneys paid for all or any part of an initial entrance fee may be included or pledged for the construction or purchase of the facility or as security for long-term financing. As used in this section, the term “initial entrance fee” means the total entrance fee charged by the facility to the first occupant of a unit. A minimum of 75 percent of the moneys paid for all or any part of an initial entrance fee collected for continuing care or continuing care at-home must be placed in an escrow account or on deposit with the department as prescribed in s. 651.033. (6) The provider is entitled to secure release of the moneys held in escrow within 7 days after receipt by the office of an affidavit from the provider, along with appropriate copies to verify, and notification to the escrow agent by certified mail, that the following conditions have been satisfied: (a) A certificate of occupancy has been issued. (b) Payment in full has been received for at least 70 percent of the total units of a phase or of the total of the combined phases constructed. If a provider offering continuing care at-home is applying for a release of escrowed entrance fees, the same minimum requirement must be met for the continuing care and continuing care at-home contracts, independently of each other. (c) Documents evidencing that commitments have been secured or a documented plan adopted by the applicant has been approved by the office for long-term financing. (d) Documents evidencing that the provider has sufficient funds to meet the requirements of s. 651.035, which may include funds deposited in the initial entrance fee account. (e) Documents evidencing the intended application of the proceeds upon release and documentation that the entrance fees when released will be applied as represented to the office. (f) If any material change occurred in the facts set forth in the application filed with the office pursuant to subsection (1), the applicant timely filed the amendment setting forth such change with the office and sent copies of the amendment to the principal office of the facility and to the principal office of the controlling company as required under that subsection. Notwithstanding chapter 120, no person, other than the provider, the escrow agent, and the office, may have a substantial interest in any office decision regarding release of escrow funds in any proceedings under chapter 120 or this chapter regarding release of escrow funds. (7) In lieu of the provider fulfilling the requirements in subsection (5) and paragraphs (6)(b) and (c), the office may authorize the release of escrowed funds to retire all outstanding debts on the facility and equipment upon application of the provider and upon the provider’s showing that the provider will grant to the residents a first mortgage on the land, buildings, and equipment that constitute the facility, and that the provider has satisfied paragraphs (6)(a) and (d). Such mortgage shall secure the refund of the entrance fee in the amount required by this chapter. The granting of such mortgage is subject to the following: (a) The first mortgage is granted to an independent trust that is beneficially held by the residents. The document creating the trust must include a provision that agrees to an annual audit and will furnish to the office all information the office may reasonably require. The mortgage may secure payment on bonds issued to the residents or trustee. Such bonds are redeemable after termination of the residency contract in the amount and manner required by this chapter for the refund of an entrance fee. (b) Before granting a first mortgage to the residents, all construction must be substantially completed and substantially all equipment must be purchased. No part of the entrance fees may be pledged as security for a construction loan or otherwise used for construction expenses before the completion of construction. (c) If the provider is leasing the land or buildings used by the facility, the leasehold interest must be for a term of at least 30 years. (8) The office may not issue a certificate of authority to a facility that does not have a component that is to be licensed pursuant to part II of chapter 400 or to part I of chapter 429 or that does not offer personal services or nursing services through written contractual agreement. A written contractual agreement must be disclosed in the contract for continuing care or continuing care at-home and is subject to s. 651.1151, relating to administrative, vendor, and management contracts. (9) The office may not approve an application that includes in the plan of financing any encumbrance of the operating reserves or renewal and replacement reserves required by this chapter. History. — ss. 5, 33, ch. 83-328; s. 36, ch. 85-62; s. 43, ch. 85-321; s. 2, ch. 86-209; s. 3, ch. 87-136; s. 3, ch. 89-363; s. 4, ch. 91-98; s. 3, ch. 92-56; ss. 2, 12, ch. 93-22; s. 508, ch. 97-102; s. 5, ch. 97-229; s. 1671, ch. 2003-261; s. 101, ch. 2006-197; s. 6, ch. 2011-193; s. 8, ch. 2019-160. 651.0235 Validity of provisional certificates of authority and certificates of authority. (1) The provisional certificate of authority and certificate of authority shall be valid for as long as the office determines that the provider continues to meet the requirements of this chapter. (2) If the provider fails to meet the requirements of this chapter for a provisional certificate of authority or a certificate of authority, the office may notify the provider of any deficiencies and require the provider to correct such deficiencies within a period to be determined by the office. If such deficiencies are not corrected within 20 days after the notice to the provider, or within less time at the discretion of the office, the office shall notify the Continuing Care Advisory Council, which may assist the facility in formulating a remedial plan to be submitted to the office within 60 days after the date of notification. The time period for correcting the deficiencies may be extended upon submission of a plan for corrective action approved by the office. If such deficiencies have not been cleared by the expiration of such time period, as extended, the office shall petition for a delinquency proceeding or pursue such other relief as provided under this chapter, as the circumstances may require. (3) The office shall notify the Agency for Health Care Administration of any facility for which a provisional certificate of authority or certificate of authority is no longer valid. History. — ss. 4, 9, ch. 87-136; s. 12, ch. 93-22; s. 6, ch. 97-229; s. 1672, ch. 2003-261; s. 4, ch. 2010-202. 651.024 Acquisition. (1) A person who seeks to assume the role of general partner of a provider or to otherwise assume ownership or possession of, or control over, 10 percent or more of a provider, a controlling company of the provider, or a provider’s assets, based on the balance sheet from the most recent financial audit report filed with the office, is subject to s. 628.4615 and is not required to make filings pursuant to s. 651.022, s. 651.023, or s. 651.0245. (2) A person who seeks to acquire and become the provider for a facility is subject to s. 651.0245 and is not required to make filings pursuant to ss. 628.4615, 651.022, and 651.023. (3) In addition to the provider or the controlling company, the office has standing to petition a circuit court under s. 628.4615(9). History. — ss. 16, 17, ch. 86-250; s. 10, ch. 90-248; s. 184, ch. 91-108; s. 12, ch. 93-22; s. 9, ch. 2019-160. 651.0245 Application for the simultaneous acquisition of a facility and issuance of a certificate of authority. (1) Except with the prior written approval of the office, a person may not, individually or in conjunction with any affiliated person of such person, directly or indirectly acquire a facility operating under a subsisting certificate of authority and engage in the business of providing continuing care. (2) An applicant seeking simultaneous acquisition of a facility and issuance of a certificate of authority must: (a) Comply with the notice requirements of s. 628.4615(2)(a); and (b) File an application in the form required by the office and cooperate with the office’s review of the application. (3) The commission shall adopt by rule application requirements equivalent to those described in ss. 628.4615(4) and (5), 651.022(2), and 651.023(1)(b). The office shall review the application and issue an approval or disapproval of the filing in accordance with ss. 628.4615(6)(a) and (c), (7)-(10), and (14) and 651.023(1)(b). (4) In addition to the provider or the controlling company, the office has standing to petition a circuit court under s. 628.4615(9). (5) A person may rebut a presumption of control by filing a disclaimer of control with the office on a form prescribed by the commission. The disclaimer must fully disclose all material relationships and bases for affiliation between the person and the provider or facility, as well as the basis for disclaiming the affiliation. In lieu of such form, a person or acquiring party may file with the office a copy of a Schedule 13G filed with the Securities and Exchange Commission pursuant to Rule 13d-1(b) or (c), 17 C.F.R. s. 240.13d-1, under the Securities Exchange Act of 1934, as amended. After a disclaimer has been filed, the provider or facility is relieved of any duty to register or report under this section which may arise out of the provider’s or facility’s relationship with the person, unless the office disallows the disclaimer. (6) The commission may adopt rules as necessary to administer this section. History. — s. 10, ch. 2019-160. 651.0246 Expansions. (1)(a) A provider must obtain written approval from the office before commencing construction or marketing for an expansion of a certificated facility equivalent to the addition of at least 20 percent of existing units or 20 percent or more of the number of continuing care at-home contracts. If the provider has exceeded the current statewide median for days cash on hand, debt service coverage ratio, and total facility occupancy for the most recent two consecutive annual reporting periods, the provider is automatically granted approval to expand the total number of existing units by up to 35 percent upon submitting a letter to the office indicating the total number of planned units in the expansion, the proposed sources and uses of funds, and an attestation that the provider understands and pledges to comply with all minimum liquid reserve and escrow account requirements. As used in this section, the term “existing units” means the sum of the total number of independent living units and assisted living units identified in the most recent annual report filed with the office pursuant to s. 651.026. For purposes of this section, the statewide median for days cash on hand, debt service coverage ratio, and total facility occupancy is the median calculated in the most recent annual report submitted by the office to the Continuing Care Advisory Council pursuant to s. 651.121(8). This section does not apply to construction for which a certificate of need from the Agency for Health Care Administration is required. (b) The application for the approval of an addition consisting of 20 percent or more of existing units or continuing care at-home contracts must be on forms adopted by the commission. The application must include the feasibility study required by this section and such other information as reasonably requested by the office. If the expansion is only for continuing care at-home contracts, an actuarial study prepared by an independent actuary in accordance with standards adopted by the American Academy of Actuaries which presents the financial impact of the expansion may be substituted for the feasibility study. (c) In determining whether an expansion should be approved, the office shall consider: 1. Whether the application meets all requirements of law; 2. Whether the feasibility study was based on sufficient data and reasonable assumptions; and 3. Whether the applicant will be able to provide continuing care or continuing care at-home as proposed and meet all financial obligations related to its operations, including the financial requirements of this chapter. If the application is denied, the office must notify the applicant in writing, citing the specific failures to meet the provisions of this chapter. A denial entitles the applicant to a hearing pursuant to chapter 120. (2) A provider applying for expansion of a certificated facility must submit all of the following: (a) A feasibility study prepared by an independent certified public accountant. The feasibility study must include at least the following information: 1. A description of the facility and proposed expansion, including the location, the size, the anticipated completion date, and the proposed construction program. 2. An identification and evaluation of the primary and, if applicable, secondary market areas of the facility and the projected unit sales per month. 3. Projected revenues, including anticipated entrance fees; monthly service fees; nursing care revenues, if appli