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IC 23-2-4-1 Version a
Definitions
Note: This version of section effective until 7-1-2008. See also
following version of this section, effective 7-1-2008.
Sec. 1. As used in this chapter, the term:
"Application fee" means the fee charged an individual, in addition
to the entrance fee or any other fee, to cover the provider's
reasonable costs in processing the individual's application to become
a resident.
"Commissioner" means the securities commissioner as provided
in IC 23-2-1-15(a).
"Continuing care agreement" means an agreement by a provider
to furnish to at least one (1) individual, for the payment of an
entrance fee and periodic charges, accommodations in a living unit
of a home and:
(1) meals and related services;
(2) nursing care services;
(3) medical services;
(4) other health related services; or
(5) any combination of these services;
for the life of the individual or for more than one (1) month.
"Contracting party" means a person or persons who enter into a
continuing care agreement with a provider.
"Entrance fee" means the sum of money or other property paid or
transferred, or promised to be paid or transferred, to a provider in
consideration for one (1) or more individuals becoming a resident of
a home under a continuing care agreement.
"Home" means a facility where the provider undertakes, pursuant
to a continuing care agreement, to provide continuing care to five (5)
or more residents.
"Living unit" means a room, apartment, cottage, or other area
within a home set aside for the use of one (1) or more identified
residents.
"Long term financing" means financing for a period in excess of
one (1) year.
"Omission of a material fact" means the failure to state a material
fact required to be stated in any disclosure statement or registration
in order to make the disclosure statement or registration, in light of
the circumstances under which they were made, not misleading.
"Person" means an individual, a corporation, a partnership, an
association, a limited liability company, or other legal entity.
"Provider" means a person that agrees to provide continuing care
to an individual under a continuing care agreement.
"Refurbishment fee" means the fee charged an individual, in
addition to the entrance fee or any other fee, to cover the provider's
reasonable costs in refurbishing a previously occupied living unit
specifically designated for occupancy by that individual.
IC 23-2-4-1 Version b
Definitions
Note: This version of section effective 7-1-2008. See also
preceding version of this section, effective until 7-1-2008.
Sec. 1. As used in this chapter, the term:
"Application fee" means the fee charged an individual, in addition
to the entrance fee or any other fee, to cover the provider's
reasonable costs in processing the individual's application to become
a resident.
"Commissioner" means the securities commissioner as provided
in IC 23-19-6-1(a).
"Continuing care agreement" means an agreement by a provider
to furnish to at least one (1) individual, for the payment of an
entrance fee and periodic charges, accommodations in a living unit
of a home and:
(1) meals and related services;
(2) nursing care services;
(3) medical services;
(4) other health related services; or
(5) any combination of these services;
for the life of the individual or for more than one (1) month.
"Contracting party" means a person or persons who enter into a
continuing care agreement with a provider.
"Entrance fee" means the sum of money or other property paid or
transferred, or promised to be paid or transferred, to a provider in
consideration for one (1) or more individuals becoming a resident of
a home under a continuing care agreement.
"Home" means a facility where the provider undertakes, pursuant
to a continuing care agreement, to provide continuing care to five (5)
or more residents.
"Living unit" means a room, apartment, cottage, or other area
within a home set aside for the use of one (1) or more identified
residents.
"Long term financing" means financing for a period in excess of
one (1) year.
"Omission of a material fact" means the failure to state a material
fact required to be stated in any disclosure statement or registration
in order to make the disclosure statement or registration, in light of
the circumstances under which they were made, not misleading.
"Person" means an individual, a corporation, a partnership, an
association, a limited liability company, or other legal entity.
"Provider" means a person that agrees to provide continuing care
to an individual under a continuing care agreement.
"Refurbishment fee" means the fee charged an individual, in
addition to the entrance fee or any other fee, to cover the provider's
reasonable costs in refurbishing a previously occupied living unit
specifically designated for occupancy by that individual.
"Resident" means an individual who is entitled to receive benefits
under a continuing care agreement.
"Solicit" means any action of a provider in seeking to have an
individual residing in Indiana pay an application fee and enter into
a continuing care agreement, including:
(1) personal, telephone, or mail communication or any other
communication directed to and received by any individual in
Indiana; and
(2) advertising in any media distributed or communicated by
any means to individuals residing in Indiana.
As added by Acts 1982, P.L.145, SEC.1. Amended by P.L.234-1985,
SEC.1; P.L.177-1991, SEC.8; P.L.8-1993, SEC.312; P.L.27-2007,
SEC.16.
IC 23-2-4-2
Application of chapter
Sec. 2. This chapter applies to any person who:
(1) enters into a continuing care agreement in Indiana to provide
care at a home located either inside Indiana or outside Indiana;
(2) enters into a continuing care agreement outside Indiana to
provide care at a home located in Indiana;
(3) extends the term of an existing continuing care agreement
in Indiana to provide care at a home located either inside
Indiana or outside Indiana;
(4) extends the term of an existing continuing care agreement
outside Indiana to provide care at a home located in Indiana; or
(5) solicits the execution of a continuing care agreement by
persons in Indiana.
As added by Acts 1982, P.L.145, SEC.1.
IC 23-2-4-3
Registration; application; order
Sec. 3. (a) A provider shall register each home with the
commissioner. If a provider fails to register a home, the provider may
not:
(1) enter into, or extend the term of, a continuing care
agreement to provide continuing care to any person at that
home;
(2) provide services at that home under a continuing care
agreement; or
IC 23-2-4-4
Initial disclosure statement; contents
Sec. 4. The initial disclosure statement shall contain the following
information:
(1) The name and business address of the provider.
(2) If the provider is a partnership, corporation, limited liability
company, or association, the names and duties of its officers,
directors, trustees, partners, members, or managers.
(3) The name and business address of any person having a five
percent (5%) or greater ownership interest in the provider or
manager of the home.
(4) A description of the business experience of the provider and
its officers, directors, trustees, partners, or managers.
(5) A statement as to whether the provider or any of its officers,
directors, trustees, partners, or managers, within ten (10) years
prior to the date of the initial disclosure statement:
(A) was convicted of a crime;
(B) was a party to any civil action for fraud, embezzlement,
fraudulent conversion, or misappropriation of property that
resulted in a judgment against him;
(C) had a prior discharge in bankruptcy or was found
insolvent in any court action; or
(D) had any state or federal licenses or permits suspended or
revoked in connection with any health care or continuing
care activities, or related business activities.
(6) The identity of any other home currently or previously
operated by the provider or manager of the home.
(7) The location and description of other properties, both
existing and proposed, of the provider in which the provider
owns a twenty-five percent (25%) ownership interest, and on
which homes are or are intended to be located.
(8) A statement as to whether the provider is, or is affiliated
with, a religious, charitable, or other nonprofit association, and
the extent to which the affiliate organization is responsible for
the financial and contractual obligations of the provider.
(9) A description of all services to be provided by the provider
under its continuing care agreements with contracting parties,
and a description of all fees for those services, including
conditions under which the fees may be adjusted.
(10) A description of the terms and conditions under which the
continuing care agreement can be cancelled, or fees refunded.
(11) Financial statements of the provider prepared in
accordance with generally accepted accounting principles
applied on a consistent basis and certified by an independent
certified or public accountant, including a balance sheet as of
the end of the provider's last fiscal year and income statements
for the last three (3) fiscal years, or such shorter period of time
as the provider has been in operation.
(12) If the operation of the home has not begun, a statement of
the anticipated source and application of funds to be used in the
purchase or construction of the home, and an estimate of the
funds, if any, which are anticipated to be necessary to pay for
start-up losses.
(13) A copy of the forms of agreement for continuing care used
by the provider.
(14) Any other information that the commissioner may require
by rule or order.
As added by Acts 1982, P.L.145, SEC.1. Amended by P.L.8-1993,
SEC.313.
IC 23-2-4-5
Annual disclosure statement; contents; fee
Sec. 5. (a) Each year after the initial year in which a home is
registered under section 3 of this chapter, the provider shall file with
the commissioner within four (4) months after the end of the
provider's fiscal year, unless otherwise extended by the written
consent of the commissioner, an annual disclosure statement which
shall consist of the financial information set forth in section 4(11) of
this chapter.
(b) The annual disclosure statement required to be filed with the
commissioner under this section shall be accompanied by an annual
filing fee of one hundred dollars ($100).
As added by Acts 1982, P.L.145, SEC.1. Amended by P.L.234-1985,
SEC.2.
IC 23-2-4-6
Disclosure statements; amendment
Sec. 6. (a) A provider shall amend its initial or annual disclosure
statement filed with the commissioner under section 3 and section 5
of this chapter at any time if necessary to prevent the initial or annual
disclosure statement from containing any material misstatement of
fact or omission of a material fact.
(b) Upon the sale of a home to a new provider, the new provider
shall amend the currently filed disclosure statement to reflect the fact
of sale and any other fact that would be required to be disclosed
under section 4 of this chapter if the new provider were filing an
initial disclosure statement.
As added by Acts 1982, P.L.145, SEC.1.
IC 23-2-4-7
Delivery of disclosure statements to persons executing agreements
Sec. 7. (a) Prior to the execution of a continuing care agreement,
a provider shall deliver to the contracting party and the prospective
resident a copy of the initial disclosure statement and the latest
annual disclosure statement.
(b) After the execution of a continuing care agreement, a provider
shall provide, upon request, a copy of the initial disclosure statement
and the latest annual disclosure statement.
As added by Acts 1982, P.L.145, SEC.1.
IC 23-2-4-8
Sanctions against registration of providers or execution of new
continuing care agreements; findings of fact; cease and desist
order; notice and hearing
Sec. 8. (a) The commissioner may deny, revoke, or refuse to
renew registration of a provider or prohibit the execution of new
continuing care agreements if the commissioner finds that:
(1) the provider willfully violated any provision of this chapter
or any rule or order adopted under this chapter;
(2) the provider failed to file an annual disclosure statement
required by section 5 of this chapter;
(3) the provider failed to deliver to a prospective resident or
contracting party a copy of the disclosure statements as required
by section 7 of this chapter;
(4) the provider delivered to a prospective resident or
contracting party a disclosure statement that contained a
misstatement of material fact or omission of a material fact even
though the provider, at the time of the delivery of the disclosure
statement, had no actual knowledge of the misstatement or
omission;
(5) the provider failed to comply with the terms of a cease and
desist order of the commissioner; or
(6) according to rules adopted by the commissioner under
IC 4-22-2, the provider is insolvent and the financial condition
of the provider may jeopardize the care of the residents.
(b) Findings of fact in support of an order under this section, if set
forth in statutory language, shall be accompanied by a concise and
explicit statement of the underlying facts supporting the findings.
(c) If the commissioner finds, after notice and hearing, that the
provider has committed a violation for which revocation could be
ordered, the commissioner may first issue a cease and desist order.
If the cease and desist order is not effective in remedying the
violation, the commissioner may, after notice and hearing, order that
the registration be revoked.
(d) The commissioner may summarily prohibit the execution of
new continuing care agreements pending final determination of any
proceeding under this section. Upon the entry of the order, the
commissioner shall promptly notify the provider that it has been
entered and of the reasons for the order and that upon receipt of a
written request the matter will be set down for hearing to commence
within fifteen (15) business days after receipt of the request unless
the provider consents to a later date. If no hearing is requested and
none is ordered by the commissioner, the order remains in effect
until it is modified or vacated by the commissioner. If a hearing is
requested or ordered, the commissioner, after notice of and
opportunity for hearing to the provider, may modify, vacate, or
extend the order until final determination.
(e) Except as provided in subsection (d), an order may not be
entered under this section unless there has been:
(1) appropriate prior notice to the provider;
(2) opportunity for hearing; and
(3) written findings of fact and conclusions of law.
(f) The commissioner may vacate or modify an order if the
commissioner finds that the conditions that prompted entry have
changed or that it is in the public interest to do so.
As added by Acts 1982, P.L.145, SEC.1. Amended by P.L.131-1988,
SEC.6; P.L.1-1992, SEC.114.
IC 23-2-4-9
Offense
Sec. 9. A person who knowingly or intentionally fails to comply
with any of the registration or disclosure requirements of sections 3,
4, 5, 6, or 7 of this chapter commits a Class A infraction.
As added by Acts 1982, P.L.145, SEC.1.
IC 23-2-4-10
Conditions of registration; deposit of entrance and refurbishment
fees into escrow account; limitations
Sec. 10. (a) Except as provided by section 11 of this chapter, the
commissioner shall require, as a condition of registration, that:
(1) the provider establish an interest-bearing escrow account
with a bank, trust company, or other escrow agent approved by
the commissioner; and
(2) any entrance fees received by the provider prior to the date
the resident is permitted to occupy the living unit in the home
be placed in the escrow account, subject to release as provided
by subsection (b).
(b) If the entrance fee gives the resident the right to occupy a
living unit that has been previously occupied, the entrance fee and
any income earned thereon shall be released to the provider when the
living unit is first occupied by the new resident. If the entrance fee
applies to a living unit that has not been previously occupied by any
resident, the entrance fee and any income earned thereon shall be
released to the provider when the commissioner is satisfied that:
(1) aggregate entrance fees received or receivable by the
provider pursuant to executed continuing care agreements, plus:
(A) anticipated proceeds of any first mortgage loan or other
long term financing commitment; and
(B) funds from other sources in the actual possession of the
provider;
are equal to at least fifty percent (50%) of the aggregate cost of
constructing, purchasing, equipping, and furnishing the home
and equal to at least fifty percent (50%) of the estimate of funds
necessary to fund startup losses of the home, as reported under
section 4(12) of this chapter; and
(2) a commitment has been received by the provider for any
permanent mortgage loan or other long term financing
described in the statement of anticipated source and application
of funds to be used in the purchase or construction of the home
under section 4(12) of this chapter, and any conditions of the
commitment prior to disbursement of funds thereunder, other
than completion of the construction or closing of the purchase
of the home, have been substantially satisfied.
(c) If the funds in an escrow account under this section and any
interest earned thereon are not released within the time provided by
this section or by rules adopted by the commissioner, then the funds
shall be returned by the escrow agent to the persons who made the
payment to the provider.
(d) An entrance fee held in escrow shall be returned by the escrow
agent to the person who paid the fee in the following instances:
IC 23-2-4-11
Letter of credit, negotiable securities, or bond instead of escrow
account
Sec. 11. In lieu of establishing an escrow account under section
10 of this chapter, a provider may, with the commissioner's
permission, post a letter of credit from a financial institution,
negotiable securities, or a bond by a surety authorized to do business
in Indiana. The letter of credit, negotiable securities, or bond must
be:
(1) approved by the commissioner as to form;
(2) for an amount not to exceed the total amount of all entrance
fees received by the provider before the date the resident is
permitted to occupy the living unit; and
(3) executed in favor of the commissioner on behalf of
individuals who may be found entitled to a refund of entrance
fees.
As added by Acts 1982, P.L.145, SEC.1.
IC 23-2-4-12
Entrance fees; use
Sec. 12. Any money or property received by a provider as an
entrance fee to a home constructed or purchased after August 31,
1982, or any income earned thereon, may be used by the provider
only for purposes directly related to the construction, maintenance,
or operation of that particular home. A home in operation on
September 1, 1982, may not use the entrance fees or income earned
thereon after August 31, 1982, for the construction, operation, or
maintenance of another home constructed or purchased after August
31, 1982.
As added by Acts 1982, P.L.145, SEC.1.
IC 23-2-4-14
Fund; board of directors; membership; compensation
Sec. 14. (a) There is established a board of directors to administer
the fund. The board of directors of the fund shall consist of five (5)
members to be appointed by the governor, from a list submitted by
the secretary of state, as follows:
(1) one (1) provider;
(2) two (2) residents;
(3) one (1) individual with expertise in insurance; and
(4) one (1) individual with expertise in banking and finance.
In addition, the commissioner shall serve as an ex officio member of
the board. Directors shall serve such terms as are established in the
plan of operation under section 15 of this chapter.
(b) Members of the board of directors are not entitled to
compensation for their services. However, each member is entitled
to the following:
(1) Reimbursement for traveling and other expenses incurred as
members of the board, as provided in the state travel policies
and procedures, established by the Indiana department of
administration and approved by the budget agency.
IC 23-2-4-15
Board; submission and approval of plan of operation; contents of
plan; adoption of rules
Sec. 15. (a) The board of directors shall submit to the
commissioner a plan of operation, and such subsequent amendments
to the plan as are necessary to assure the fair, reasonable, and
equitable administration of the fund. The plan of operation is
effective upon the commissioner's approval, which must be in
writing.
(b) If the board of directors fails to submit by September 1, 1983,
a plan of operation considered suitable by the commissioner, or, if at
any other time the board of directors fails to submit amendments to
the plan considered necessary by the commissioner, the
commissioner shall adopt rules under IC 4-22-2 necessary to carry
out this chapter. The rules continue in force until modified by the
commissioner or superseded by a plan submitted by the board of
directors and approved by the commissioner.
(c) The plan of operation shall establish:
(1) procedures for handling the assets of the fund;
(2) the method of reimbursing members of the board of
directors under section 14 of this chapter;
(3) regular places and times for meetings of the board of
directors;
(4) recordkeeping procedures for all financial transactions
relating to the fund and the board of directors;
(5) any additional provisions necessary for the execution of the
powers and duties of the board of directors.
As added by Acts 1982, P.L.145, SEC.1.
IC 23-2-4-16
Termination of bankrupt home; payments to residents from fund;
subrogation rights of board
Sec. 16. (a) If a home is bankrupt and the operation of the home
is terminated, the board of directors shall, subject to the approval of
the commissioner, distribute from the guaranty association fund
established in section 13 to the living residents of the home an
aggregate amount not to exceed one-half (1/2) of the amount in the
fund at the time of disbursement. The amount each living resident is
entitled to receive shall be prorated, based on the total amount paid
on behalf of the resident by the contracting party under the
continuing care agreement. In no event may the amount paid to an
individual resident under this section exceed the total amount paid on
behalf of that resident under the continuing care agreement, less the
total value of services received under the agreement.
IC 23-2-4-17
Fund; examination and regulation by commissioner; reports
Sec. 17. The fund is subject to examination and regulation by the
commissioner. The board of directors shall submit to the
commissioner before May 1 of each year:
(1) a financial report for the preceding calendar year, in a form
approved by the commissioner; and
(2) a report of its activities during the preceding calendar year.
As added by Acts 1982, P.L.145, SEC.1.
IC 23-2-4-18
Fund; exemption from certain fees and taxes
Sec. 18. The fund is exempt from payment of all fees and taxes
levied by Indiana or any of its political subdivisions.
As added by Acts 1982, P.L.145, SEC.1.
IC 23-2-4-19
Repealed
(Repealed by P.L.234-1985, SEC.5.)
IC 23-2-4-20
Disclosure statements; liability of provider
Sec. 20. (a) If:
(1) a provider enters into a continuing care agreement:
(A) in violation of section 3 of this chapter; or
(B) without having first delivered to the contracting party
and the prospective resident the disclosure statements as
required by section 7 of this chapter; or
(2) a provider delivers to the prospective resident and the
contracting party a disclosure statement that makes an untrue or
misleading statement of material fact or omits a material fact;
the provider is liable to the individual who entered into the
continuing care agreement for the repayment of all entrance fees,
application fees, periodic charges, or other fees paid by that person
to the provider less the reasonable value of care and lodging provided
the resident until the untrue statement, misstatement, or omission was
actually or should reasonably have been discovered by the resident
or the contracting party, together with interest thereon at the legal
rate for judgments, costs, and reasonable attorney's fees.
(b) Liability of the provider under this section for any untrue
statement, misstatement, or omission in the disclosure statement shall
exist only if the provider had actual knowledge of or, in the exercise
of reasonable care, should have known of the untrue statement,
misstatement, or omission.
(c) An action may not be maintained by any individual to enforce
liability under this section unless commenced within:
(1) two (2) years after the execution of the continuing care
agreement that gave rise to the violation;
(2) two (2) years after the failure to deliver the disclosure
statement; or
(3) two (2) years after the delivery of the disclosure statement
containing an untrue statement, misstatement, or omission of a
material fact;
whichever occurs later.
As added by Acts 1982, P.L.145, SEC.1. Amended by P.L.16-1983,
SEC.14.
IC 23-2-4-21
Commissioner; petition for appointment of receiver
Sec. 21. If the commissioner has reason to believe that a home is
insolvent, the commissioner may petition the superior or circuit court
of the county in which the home is located, or the superior or circuit
court of Marion County, for the appointment of a receiver to assume
the management and possession of the home and its assets.
As added by Acts 1982, P.L.145, SEC.1.
IC 23-2-4-22
Commissioner; powers; hearings and investigations
Sec. 22. The commissioner, or his designated representative, may:
(1) conduct under IC 4-21.5-3 hearings necessary to carry out
this chapter;
(2) hear evidence;
(3) conduct investigations to determine whether any person has
violated or is about to violate this chapter or a rule or order
issued under this chapter; and
(4) compel the production of any item relevant to an
investigation under this chapter.
As added by Acts 1982, P.L.145, SEC.1. Amended by P.L.7-1987,
SEC.104.
IC 23-2-4-24
Rules
Sec. 24. The commissioner shall adopt under IC 4-22-2 rules
necessary to carry out the provisions of this chapter.
As added by Acts 1982, P.L.145, SEC.1.