New CCRC Statute Will Provide Increased Protections for Residents

This past June was an exciting month for CCRC residents as the NC General Assembly took up and passed HB357, Continuing Care Retirement Communities.

The bill first traveled through the House of Representatives, receiving unanimous support from members of the House Insurance and Finance committees and the full House on June 10. The Senate received HB357 on June 16. It quickly received favorable reports by the Senate Commerce and Insurance, Judiciary, Finance, and Rules committees and unanimously passed the Senate on June 25.

The North Carolina Continuing Care Residents Association (NorCCRA) played a key role in the successful passage of this legislation. Beginning in March 2022, five NorCCRA members served along with 15 other members representing CCRC management and consultants on the Department of Insurance Statute Revision Task Force. They were able to reach consensus on the proposed legislation after more than three years of intense discussion. How amazing that it unanimously passed both the House and Senate in less than two weeks!! The bill landed on the Governor’s desk, and he signed it into law on July 3, 2025. The 56-page bill officially becomes Chapter 58, Article 64 on December 1, 2025 – replacing the 16-page statute adopted in 1989.

Attached as an addendum is a longer version of the highlights of the bill for those who want a more complete synopsis. One important takeaway is the sense that some CCRCs are not as transparent as Carol Woods. Many of the sections are designed to require more transparency.

The first important point is that Chapter 58, Article 64 will maintain the title of Continuing Care Retirement Communities. It means that to be designated a CCRC, the community must adhere to the provisions of the 56-page statute.

NorCCRA members on the DOI Task Force worked hard on the following issues:

• Requires truth in advertising whereby all promotions must mirror what is contained in the disclosure statement and residents' contracts.

• Identifies a “hazardous financial condition” — one that if allowed to continue would be financially harmful to residents.

• Develops a sliding scale for money reserves based on the occupancy rates; e.g., if a CCRC goes below 80% occupancy, it must maintain an operating reserve equal to 50% of the total operating costs of the CCRC projected for the next 12-month period. Ensures that escrow accounts of entrance fees and deposits cannot be used as collateral.

• Increases the information contained in a CCRC’s disclosure statement, including work experience of officers, directors, and managers; name and address of any professional service providing goods or services of $5000 or more; and whether any of the above have been convicted of a felony, fraud, embezzlement, or misappropriation of property.

• Urges prospective residents to seek financial and legal advice before signing the CCRC contract.

• Ensures that Early Acceptance programs can be offered only by CCRCs licensed by the North Carolina Department of Insurance.

• Requires an annual audited financial statement, quarterly unaudited financial statements, and an actuarial study every three years.

• Requires that a CCRC must notify the DOI and residents within 10 business days if it has failed to maintain the required operating reserve, entrance fee refunds are more than 30 days past due, there is a reduction of any type of living units by 20%, or if the community has changed its name.

• Identifies 18 different violations where the DOI can refuse, restrict, or revoke a permit, a certificate, or a license of a CCRC.

• Identifies 15 standards used to determine if a CCRC is in a hazardous financial condition.

• Allows residents the right to form a Residents Council.

• Stipulates that the CCRC must provide two semiannual meetings open to all residents with at least one independent member of the Board of Directors in attendance.

• Creates a 12-member Continuing Care Advisory Committee (had been nine members). The initial version had four residents nominated by NorCCRA, four nominated by LeadingAge NC representing management, and four representing consultants of CCRCs. This was amended by the House Commerce and Insurance Committee and now NorCCRA has only two members guaranteed.

In general, NorCCRA feels that we accomplished a lot. There are changes that, as residents, we feel still need to be made, but that will have to wait until another legislative session.