The Vermont Statutes Online

Title 8 : Banking and Insurance

Chapter 151 : Continuing Care Retirement Communities

• § 8002. Certificate of authority; authority of the Department

  (a) A provider shall not receive any entrance fee, or portion thereof, or enter into a continuing care contract unless the provider has obtained a certificate of authority from the Commissioner. However, a refundable payment of $1,000.00 or less and a processing fee of $250.00 or less shall not be considered entrance fees for the purposes of this chapter. The Commissioner is authorized to modify the amounts of refundable payments and processing fees to reflect increased costs or inflation.

  (b) The application for the certificate of authority shall include the following information: the name and address of the provider that will operate the facility, a copy of the proposed continuing care contract and escrow agreement to be used by the applicant, a schedule of all fees to be charged, a description of the applicant’s refund policy, and, if the applicant is not an individual, a description of the applicant. This description shall include the names and addresses of members of its board of directors, if any; its affiliation with or sponsorship by other organizations, if any, and a statement of the financial responsibility of such organizations; the applicant’s financial, marketing plans, and proposed marketing materials; a plan for establishment of a resident assistance fund; an actuarial report demonstrating financial feasibility; and such other information as the Commissioner may require. An applicant shall submit sufficient evidence of:

  (1) the amount and liquidity of its assets relative to the risks to be assumed;

  (2) the adequacy of the expertise, experience, and character of the person or persons who will manage it; and

  (3) the overall soundness of its plan of operation.

  (c) The Commissioner shall acknowledge receipt of an application within 15 days after the day it is received. If the application is not complete, the Commissioner shall notify the applicant, in writing, that additional information is required.

  (d) The Commissioner shall act on the application within 90 days after an application is determined to be complete. The Commissioner may approve, approve with conditions, or deny a certificate of authority.

  (e) The Commissioner shall not issue a certificate of authority unless he or she determines that the application conforms to the requirements of this chapter and that the provider has demonstrated financial feasibility in accordance with the information submitted pursuant to subsection (b) of this section.

  (f) The certificate of authority of a provider shall remain in effect until revoked, after notice and hearing, upon a determination that the provider has violated any provision of this chapter, any rule adopted according to the provisions of this chapter, or order of the Commissioner.

  (g) Providers who have been granted a certificate of authority shall be subject to the provisions of chapter 101, subchapter 7 of this title, examination and reporting, and sections 3661, 3686, and 3687 of this title. The Commissioner shall conduct an examination whenever deemed necessary but at least twice in the first six years of operation and at least once every five years thereafter. The Commissioner may waive or modify chapter 101, subchapter 7 of this title and sections 3661, 3686, and 3687 of this title as appropriate to the special characteristics of continuing care retirement communities.

  (h)(1) Rate standards.

  (A) Excessive. Rates are excessive if they are producing or are likely to produce unreasonably high profits for the services provided, the excess of revenue over expenses is not reasonably related to the financial requirements of the provider, or expenses are unreasonable when compared to like or similar services provided.

  (B) Inadequacy. Rates are inadequate if they are insufficient to sustain projected losses and expenses in the class or classes of business to which they apply or the use of such rates has or, if continued, will have the effect of substantially lessening competition or the tendency to create a monopoly in any market.

  (C) Unfair discrimination. Unfair discrimination exists if, after allowing for practical limitations, price differentials fail to reflect equitably the differences in expected losses and expenses. A rate is not unfairly discriminatory because different premiums result for a class of residents with like loss exposures but different expenses, or like expenses but different loss exposures, provided the rate equitably reflects the differences with reasonable accuracy. This provision shall not prohibit a provider from establishing a rate structure that subsidizes a portion of the units within a facility.

  (2) Rating methods or criteria. In reviewing, the Commissioner shall utilize the following criteria:

  (A) Basic factor in rates. Due consideration shall be given to past and prospective loss and expense experience within, and as reasonable and necessary, outside this State; to catastrophic hazards; to a reasonable provision for underwriting profit; to contingencies; to trends within and outside this State; to additional sums for leveling premium rates over time or for dividends or savings to be allowed or returned to residents; and to all other relevant factors.

  (B) Classification. Risks may be classified in any lawful and reasonable way for the collection of statistics and establishment of rates. Rates for new residents may be established prospectively for individual risks in accordance with rating plans or schedules that provide for recognition of probable variations in hazards or expenses, or both.

  (C) Expenses. The expense provisions included in the rates to be used by a provider shall reflect the operating methods of the provider and, so far as is determinable and reasonable, its own actual and anticipated expense experience for the kind of services provided, or any subdivision thereof.

  (D) Profits. The rates may contain an allowance providing for a reasonable profit. In determining the reasonableness of profit, consideration shall be given to all relevant investment income and a provision for contingencies may be included.

  (3) Filing of rates and other rating information. Every provider shall file with the Commissioner all rates and supplementary rate information that are to be used in this State. Such rates and information shall be provided to the Commissioner at least 60 days before the effective date.

  (4) Use of rates and rate review. The Commissioner has the authority to review rates pursuant to the criteria set forth in this section. The Commissioner may disapprove a rate if the Commissioner finds that it is excessive, inadequate, or discriminatory.

  (A) A prefiled rate may be disapproved by the Commissioner before its effective date. Existing rates shall remain in effect until a final determination is made on the proposed rate.

  (B) A rate may be disapproved at any time subsequent to the effective date. The rate shall remain in effect until a new rate is finally determined.

  (i) Advertising and marketing materials shall be consistent with the provisions of this chapter. Upon request by the Commissioner, the provider shall submit such materials to the Commissioner for review. In the event the Commissioner determines that the materials are inconsistent with the provisions of this chapter, he or she shall order the provider to desist from further use of those materials. (Added 1987, No. 247 (Adj. Sess.), § 1; amended 2023, No. 6, § 69, eff. July 1, 2023.)