| (a) Sections 33.401(b) - (e) and 33.402(a) of this
title apply to continuing care in residence.
(b) Entrance fees must be held in escrow as set forth
in Health and Safety Code §246.071. An escrow agent cannot release,
and the provider cannot request or accept, entrance fee funds from
the escrow agent without department approval. A provider must file
CCRC Form 14a (FIN607) to request release of entrance fee escrow funds
for identified residents. An escrow agent must file a CCRC Form 9
(FIN392) when a provider requests the agent release entrance fee escrow
account funds.
(c) To obtain department approval:
(1) a provider must verify in Form 14a (FIN607) that:
(A) the identified residents are receiving continuing
care in residence;
(B) the requested amount complies with amortization
schedules contained in the continuing care in residence contracts;
and
(C) the provider's assets exceed the actuarial present
value of the expected costs of performing all remaining obligations
to all residents under continuing care contracts; and
(2) the provider must disclose its operating ratio
and current ratio. A provider is not eligible for a release of continuing
care in residence entrance fee escrow funds if the provider's:
(A) operating ratio is greater than 100 percent, unless
there is a cash flow analysis acceptable to the department; or
(B) current ratio is no greater than 150 percent.
(d) The department will issue a determination on the
request for release of continuing care in residence entrance fee escrow
funds to both the provider and escrow agent.
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