The Vermont Statutes Online
Banking and Insurance
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.
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.
Commissioner shall acknowledge receipt of an application within 15 days of the
day it is received. If the application is not complete, the Commissioner shall
notify the applicant, in writing, that additional information is required.
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.
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.
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.
who have been granted a certificate of authority shall be subject to the
provisions of subchapter 7 of chapter 101 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 subchapter 7 of chapter 101 of this title
and sections 3661, 3686, and 3687 as appropriate to the special characteristics
of continuing care retirement communities.
(h) Review of
rates and fees.
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.
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.
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, so long as
the rate equitably reflects the differences with reasonable accuracy. This
provision shall not prohibit a provider from establishing a rate structure
which subsidizes a portion of the units within a facility.
methods or criteria. In reviewing the Commissioner shall utilize the following
(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.
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 which provide for recognition of probable
variations in hazards, expenses, or both.
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 which 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
(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.
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.)