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OFFICE OF DOCUMENTS AND ADMINISTRATIVE ISSUANCES
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DEPARTMENT OF INSURANCE, SECURITIES AND BANKING
ERRATA NOTICE
The Administrator of the Office of Documents and Administrative Issuances (ODAI), pursuant to the authority set forth in section 309 of the District of Columbia Administrative Procedure Act, approved October 21, 1968 (82 Stat. 1203; D.C. Official Code § 2-559), and the Commissioner of the Department of Insurance, Securities and Banking (DISB), pursuant to the authority set forth in section 117 of the Continuing Care Retirement Communities Act of 2004, effective April 6, 2005 (D.C. Law 15-270; D.C. Official Code § 44-151.01, et seq.(2005 Supp.))(“Act”), hereby gives notice of the corrections to the District of Columbia Municipal Regulations (DCMR) as amended by a Notice of Final Rulemaking published in the D.C. Register and issued by the Department of Insurance, Securities and Banking on October 20, 2006 at 53 DCR 8475.
The Notice of Final Rulemaking created a new chapter 82 entitled, “Continuing Care Retirement Communities.” This Errata Notice corrects the numbering scheme in section 8200, “Licensure Procedures,” and section 8208, “Insolvency or Hazardous Financial Condition.”
Chapter 3, “Rules of the Office of Documents and Administrative Issuances,” of title 1 of the District of Columbia Municipal Regulations (DCMR) contains the rules governing the drafting of rules and regulations. Section 313, “D.C. Municipal Regulations: Structure and Format,” provides the regulations pertaining to the format of the DCMR and how regulations should be drafted in order to conform to the DCMR’s format. Lower case Arabic letters (a, b, c, etc.), placed in parentheses, are to be used when drafting to the paragraph-level of subsections. See 1 DCMR § 313.9(f). When drafting subparagraphs, an outline style is to be used: (1, 2, 3 . . . ), ((1)(A), (1)(B),(1)(C) . . .), ((1)(A)(i), (1)(A)(ii), (1)(A)(iii) . . . ). See 1 DCMR § 313.9(g).
This Errata Notice corrects numbering scheme in subsections 8200.13 and 8208.1 so as to conform to the DCMR structure and format. Subsections 8200.13 and 8208.1 shall read as follows:
8200.13 All continuing care facilities operating in the District of Columbia on the effective date of these regulations shall submit an application for a Permanent License with a filing fee of five hundred dollars ($500) attached within one hundred twenty (120) days after the effective date of these regulations. An existing continuing care facility may apply for a Permanent License without first obtaining a Start-Up Certificate or Preliminary Certificate. An application for a Permanent License under this subsection shall be accompanied by the following:
(a) Disclosure statement;
(b) Financial statements;
(c) Escrow agreement;
(d) Narrative describing the facility, its mode of operation, and the location;
(e) Advertising materials that are used or to be used; and
(f) Confirmation of signed agreements for units in the continuing care facility to break even and confirmation that those units were reserved by a deposit equal to at least ten percent (10%) of the entrance fee or by a non-refundable deposit equal to the periodic fee for at least two (2) months for continuing care facilities that have no entrance fee.
8208.1 The Commissioner may deem a provider or continuing care facility that has a negative fund balance to be insolvent or in imminent danger of becoming insolvent if any of the following hazardous financial condition standards or factors are applicable or present:
(a) There are findings or conditions reported in the provider’s or continuing care facility’s financial statements that the Commissioner determines to be adverse to the financial stability of the provider or continuing care facility;
(b) The current or projected ratios of total assets, including required reserve levels, to total liabilities indicate an impairment or deterioration of the provider’s or continuing care facility’s operations or equity or demonstrate a trend that could lead to an impairment or a deterioration of the provider’s or continuing care facility’s operations, working capital, or equity;
(c) The current or projected ratios of current assets to current liabilities indicate an impairment or deterioration of the provider’s or continuing care facility’s operations, working capital, or equity or demonstrate a trend that could lead to an impairment or a deterioration of the provider’s or continuing care facility’s operations, working capital, or equity;
(d) The provider or continuing care facility is unable to perform normal daily activities and meet its obligations as they become due, considering the provider’s or continuing care facility’s current or projected cash flow and liquidity position;
(e) The provider’s or continuing care facility’s operating losses for the past year or projected operating losses are of such magnitude as to jeopardize normal daily activities or continued operations of the provider or continuing care facility;
(f) The insolvency of an affiliated provider or continuing care facility or other affiliated person results in legal liability of the provider or continuing care facility for payments and expenses of such magnitude as to jeopardize the provider’s or continuing care facility’s ability to meet its obligations as they become due, without the substantial disposition of assets outside the ordinary course of business, restructuring of debt, or externally forced revisions of its operations;
(g) The provider or continuing care facility has receivables that are more than ninety (90) days old;
(h) The insolvency is not temporary and the provider or continuing care facility cannot demonstrate that the insolvency will be materially reduced or eliminated;
(i) There is an adverse effect on the provider or continuing care facility of reporting entrance fees as deferred revenues, with consideration given to all reporting requirements required under generally accepted accounting principles and the ultimate net income component of those revenues; and
(j) A start-up provider or continuing care facility or any operational provider or continuing care facility undergoing plant expansion or refinancing of its debt has a financial condition as a result of such action that could seriously jeopardize its present or future operations.
Any questions or comments regarding this notice shall be addressed by mail to the Administrator, Office of Documents and Administrative Issuances, 441 4th Street, N.W., Suite 520 South, Washington, D.C. 20001, or via telephone at (202) 727-5090.
