Florida Statutes
Chapter 651 - Continuing Care Contracts
651.011 - Definitions.

(1) “Actuarial opinion” means an opinion issued by an actuary in accordance with Actuarial Standard of Practice No. 3 for Continuing Care Retirement Communities, Revised Edition, effective May 1, 2011.
(2) “Actuarial study” means an analysis prepared for an individual facility, or consolidated for multiple facilities, for either a certified provider, as of a current valuation date or the most recent fiscal year, or for an applicant, as of a projected future valuation date, which includes an actuary’s opinion as to whether such provider or applicant is in satisfactory actuarial balance in accordance with Actuarial Standard of Practice No. 3 for Continuing Care Retirement Communities, Revised Edition, effective May 1, 2011.
(3) “Actuary” means an individual who is qualified to sign an actuarial opinion in accordance with the American Academy of Actuaries’ qualification standards and who is a member in good standing of the American Academy of Actuaries.
(4) “Advertising” means the dissemination of written, visual, or electronic information by a provider, or any person affiliated with or controlled by a provider, to potential residents or their representatives for the purpose of inducing such persons to subscribe to or enter into a contract for continuing care or continuing care at-home.
(5) “Continuing care” or “care” means, pursuant to a contract, furnishing shelter and nursing care or personal services to a resident who resides in a facility, whether such nursing care or personal services are provided in the facility or in another setting designated in the contract for continuing care, by an individual not related by consanguinity or affinity to the resident, upon payment of an entrance fee.
(6) “Continuing Care Advisory Council” or “advisory council” means the council established in s. 651.121.
(7) “Continuing care at-home” means, pursuant to a contract other than a contract described in subsection (5), furnishing to a resident who resides outside the facility the right to future access to shelter and nursing care or personal services, whether such services are provided in the facility or in another setting designated in the contract, by an individual not related by consanguinity or affinity to the resident, upon payment of an entrance fee.
(8) “Controlling company” means any corporation, trust, or association that directly or indirectly owns 25 percent or more of:
(a) The voting securities of one or more providers that are stock corporations; or
(b) The ownership interest of one or more providers that are not stock corporations.

(9) “Corrective order” means an order issued by the office which specifies corrective actions that the office determines are required in accordance with this chapter or commission rule.
(10) “Days cash on hand” means the quotient obtained by dividing the value of paragraph (a) by the value of paragraph (b).
(a) The sum of unrestricted cash, unrestricted short-term and long-term investments, provider restricted funds, and the minimum liquid reserve as of the reporting date.
(b) Operating expenses less depreciation, amortization, and other noncash expenses and nonoperating losses divided by 365. Operating expenses, depreciation, amortization, and other noncash expenses and nonoperating losses are each the sum of their respective values over the 12-month period ending on the reporting date.
With prior written approval of the office, a demand note or other parental guarantee may be considered a short-term or long-term investment for the purposes of paragraph (a). However, the total of all demand notes issued by the parent may not, at any time, be more than the sum of unrestricted cash and unrestricted short-term and long-term investments held by the parent.

(11) “Debt service coverage ratio” means the quotient obtained by dividing the value of paragraph (a) by the value of paragraph (b).
(a) The sum of total expenses less interest expense on the debt facility, depreciation, amortization, and other noncash expense and nonoperating losses, subtracted from the sum of total revenues, excluding noncash revenues and nonoperating gains, and gross entrance fees received less earned entrance fees and refunds paid. Expenses, interest expense on the debt facility, depreciation, amortization, and other noncash expense and nonoperating losses, revenues, noncash revenues, nonoperating gains, gross entrance fees, earned entrance fees, and refunds are each the sum of their respective values over the 12-month period ending on the reporting date.
(b) Total annual principal and interest expense due on the debt facility over the 12-month period ending on the reporting date. For the purposes of this paragraph, principal excludes any balloon principal payment amounts, and interest expense due is the sum of the interest over the 12-month period ending on the reporting date.

(12) “Department” means the Department of Financial Services.
(13) “Entrance fee” means an initial or deferred payment of a sum of money or property made as full or partial payment for continuing care or continuing care at-home. An accommodation fee, admission fee, member fee, or other fee of similar form and application are considered to be an entrance fee.
(14) “Facility” means a place where continuing care is furnished and may include one or more physical plants on a primary or contiguous site or an immediately accessible site. As used in this subsection, the term “immediately accessible site” means a parcel of real property separated by a reasonable distance from the facility as measured along public thoroughfares, and the term “primary or contiguous site” means the real property contemplated in the feasibility study required by this chapter.
(15) “Impaired” or “impairment” means that either of the following has occurred:
(a) A provider has failed to maintain its minimum liquid reserve as required under s. 651.035, unless the provider has received prior written approval from the office for a withdrawal pursuant to s. 651.035(6) and is compliant with the approved payment schedule.
(b) Beginning January 1, 2021:
1. For a provider with mortgage financing from a third-party lender or a public bond issue, the provider’s debt service coverage ratio is less than 1.00:1 and the provider’s days cash on hand is less than 90; or
2. For a provider without mortgage financing from a third-party lender or public bond issue, the provider’s days cash on hand is less than 90.
If the provider is a member of an obligated group having cross-collateralized debt, the obligated group’s debt service coverage ratio and days cash on hand must be used to determine if the provider is impaired.


(16) “Insolvency” means the condition in which a provider is unable to pay its obligations as they come due in the normal course of business.
(17) “Licensed” means that a provider has obtained a certificate of authority from the office.
(18) “Manager,” “management,” or “management company” means a person who administers the day-to-day business operations of a facility for a provider, subject to the policies, directives, and oversight of the provider.
(19) “Nursing care” means those services or acts rendered to a resident by an individual licensed or certified pursuant to chapter 464.
(20) “Obligated group” means one or more entities that jointly agree to be bound by a financing structure containing security provisions and covenants applicable to the group. For the purposes of this subsection, debt issued under such a financing structure must be a joint and several obligation of each member of the group.
(21) “Occupancy” means the total number of occupied independent living units, assisted living units, and skilled nursing beds in a facility divided by the total number of units and beds in that facility, excluding units and beds that are unavailable to market or that are reserved by prospective residents.
(22) “Personal services” has the same meaning as in s. 429.02.
(23) “Provider” means the owner or operator, whether a natural person, partnership or other unincorporated association, however organized, trust, or corporation, of an institution, building, residence, or other place, whether operated for profit or not, which owner or operator provides continuing care or continuing care at-home for a fixed or variable fee, or for any other remuneration of any type, whether fixed or variable, for the period of care, payable in a lump sum or lump sum and monthly maintenance charges or in installments. The term does not apply to an entity that has existed and continuously operated a facility located on at least 63 acres in this state providing residential lodging to members and their spouses for at least 66 years on or before July 1, 1989, and has the residential capacity of 500 persons, is directly or indirectly owned or operated by a nationally recognized fraternal organization, is not open to the public, and accepts only its members and their spouses as residents.
(24) “Records” means all documents; correspondence; and financial, directory, and personnel information and data maintained by a provider pursuant to this chapter, regardless of the physical form, characteristics, or means of transmission.
(25) “Regulatory action level event” means that any two of the following have occurred:
(a) The provider’s debt service coverage ratio is less than the greater of the minimum ratio specified in the provider’s bond covenants or lending agreement for long-term financing or 1.20:1 as of the most recent annual report filed with the office pursuant to s. 651.026, or, if the provider does not have a debt service coverage ratio required by its lending institution, the provider’s debt service coverage ratio is less than 1.20:1 as of the most recent annual report filed with the office pursuant to s. 651.026. If the provider is a member of an obligated group having cross-collateralized debt, the obligated group’s debt service coverage ratio must be used as the provider’s debt service coverage ratio.
(b) The provider’s days cash on hand is less than the greater of the minimum number of days cash on hand specified in the provider’s bond covenants or lending agreement for long-term financing or 100 days. If the provider does not have a days cash on hand required by its lending institution, the days cash on hand may not be less than 100 as of the most recent annual report filed with the office pursuant to s. 651.026. If the provider is a member of an obligated group having cross-collateralized debt, the days cash on hand of the obligated group must be used as the provider’s days cash on hand.
(c) The occupancy of the provider’s facility is less than 80 percent averaged over the 12-month period immediately preceding the annual report filed with the office pursuant to s. 651.026.

(26) “Resident” means a purchaser of, a nominee of, or a subscriber to a continuing care or continuing care at-home contract. Such contract does not give the resident a part ownership of the facility in which the resident is to reside, unless expressly provided in the contract.
(27) “Shelter” means an independent living unit, room, apartment, cottage, villa, personal care unit, nursing bed, or other living area within a facility set aside for the exclusive use of one or more identified residents.
History.—s. 1, ch. 77-323; s. 170, ch. 79-164; ss. 1, 25, ch. 81-292; s. 2, ch. 81-318; s. 3, ch. 83-265; ss. 1, 31, 33, 35, ch. 83-328; s. 1, ch. 91-98; s. 33, ch. 91-263; s. 12, ch. 93-22; s. 36, ch. 93-216; s. 2, ch. 96-363; s. 12, ch. 97-82; s. 1, ch. 97-229; s. 1662, ch. 2003-261; s. 99, ch. 2006-197; s. 1, ch. 2010-202; s. 1, ch. 2011-193; s. 1, ch. 2019-160.

Structure Florida Statutes