North CarolinaHB 3572025-2026 SessionHouseWALLET

AN ACT TO ENACT THE CONTINUING CARE RETIREMENT COMMUNITIES ACT, AS RECOMMENDED BY THE DEPARTMENT OF INSURANCE.

Sponsored By: Jonathan L. Almond (Republican), Dean Arp (Republican), Chris Humphrey (Republican), Mitchell S. Setzer (Republican)

Signed by Governor

ACCOUNTINGAUDITING & AUDITSCOMMERCECONFIDENTIALITYCONSUMER PROTECTIONCOUNCIL OF STATEFIDUCIARIESHEALTH SERVICESHOUSINGINSURANCEINSURANCE DEPT

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Bill Overview

Analyzed Economic Effects

32 provisions identified: 22 benefits, 1 costs, 9 mixed.

Big refunds for unlawful or misleading contracts

If you signed without getting the required disclosure, or the disclosure omitted or misstated a material fact, the provider is liable. You can recover actual damages and get back all fees you paid, minus the cost of any care or housing already provided, plus interest, court costs, and attorney fees. If the Commissioner finds unlawful contracting, you may rescind your contract without penalty.

Stronger protection for entrance fees and ads

The law protects your entrance fee and deposit money. Funds in escrow cannot be used as collateral unless the Commissioner approves in writing, and any claim must be below your refund rights. Ads for communities must match the required disclosures and the actual contract. Residents and buyers cannot sign away the protections in this law.

Clear at‑home care contracts and refunds

For continuing care at home, you can cancel within 30 days after you sign or get the disclosure. If you cancel, die before services start, or cannot meet eligibility, you get a refund of all you paid, minus fees for services already provided, any stated nonrefundable fees, and a service charge capped at the greater of $3,000 or 2% of the entrance fee. Contracts must clearly list all fees, services, fee‑change and refund policies, transport, off‑site monitoring, priority for independent living, and relocation rules and limits. A bold notice above the signature must say state authorization is not a performance guarantee and advise you to consider risks and seek advice.

Protections when your community is in trouble

Beginning December 1, 2025, the Insurance Commissioner can place a provider under supervision and ask a court to rehabilitate or liquidate it. Residents and depositors must get written notice within five business days when supervision starts, and after any court order to rehabilitate or liquidate. If liquidation happens, continuing care contracts are preferred claims, paid before general unsecured creditors (after costs and secured claims). A court may allow adding adult care or nursing beds during receivership if it helps residents. A court can end rehabilitation and return management when it is safe. A court must refuse or cancel a rehab order if the provider posts a surety bond big enough to cover refunds and deposits.

Approvals for takeovers and property deals

No one may merge with or take control of a provider without Commissioner approval. Buyers must file detailed information, including five years of audited financials, and show the change will not harm residents or financial stability. Providers must also get approval at least 45 days before selling or transferring property used in operations; purchase‑option deposits must be escrowed. Residents and depositors must be notified within 10 business days after approvals. Your legal action does not end just because the community is sold or transferred, unless the Commissioner gives written consent.

Step‑by‑step licensing and deposit safeguards

Before marketing a new community, an applicant must get a permit and pay a $200 fee; only then may they collect deposits up to $5,000, which must be escrowed. After getting a start‑up certificate (fee $2,000), they may sign binding agreements and accept larger entrance fees and deposits, still held in escrow. A preliminary certificate needs a feasibility study, an actuarial study (unless no entrance fees), and presales of at least 50% of new independent living units with deposits of at least 10% of the entrance fee, or a $100,000 deposit with the Commissioner. A permanent license needs a plan for promised health care at opening, long‑term financing, proof of required reserves, and at least 70% of new units under binding reservations or contracts with 10% deposits (or similar alternatives). Permits and start‑up certificates expire after 36 months; extensions up to one year may be granted, but if denied, the escrow agent must refund all deposits with interest. If no permanent license is obtained within five years of a preliminary certificate, the applicant’s preliminary‑certificate deposit is forfeited.

Stronger escrow and refund rules for seniors

Entrance fees and deposits must be kept in a separate escrow account with a state‑approved agent. Providers must send your money to the escrow agent within 10 business days and include your signed papers. The escrow agent can release funds only after written instructions from the Commissioner. Interest or gains in escrow cannot be paid out without written approval to be sure refunds and any promised interest are covered. You get a 30‑day right to rescind both binding reservations and contracts. Refunds must return what you paid, minus any nonstandard costs you asked for, any stated nonrefundable fees, occupancy fees (for contracts), and a service charge capped at the greater of $3,000 or 2% of the entrance fee and never more than you paid. A provider may seek release of the remaining 75% of escrowed fees only after at least 70% of units are presold with a 10% deposit and units are complete, and it either keeps 75% in escrow or shows 70% occupancy for 60 days. If construction is phased, these release rules apply phase by phase only if the phase is financially viable on its own.

Your deposits safer and refunds faster

Entrance fees and deposits must be kept in safe escrow, in interest accounts or federally backed investments. Any change to an escrow agreement needs state approval. If you die, are denied, or cancel, the escrow agent must pay refunds due within 10 business days of written notice. If construction has started, a voluntary-cancellation refund can be delayed up to one year unless the state extends it. A refund is "pending" when someone cancels but no replacement has reserved a similar unit and paid. If at least 50% of units are presold with 10% deposits and total funds cover at least 90% of costs, up to 25% of each entrance fee may be released from escrow. Purchase‑option deposits must also be escrowed or otherwise secured as the Commissioner approves.

Approval and fees for big CCRC expansions

Expansions that add 20% or more independent living units need the Commissioner’s written OK, and residents must get written notice. The notice must include the project details, unit counts, contract forms, an escrow plan, and an updated disclosure. After approval, a provider may market and take deposits, but deposits must go to escrow and be released only under the law. Providers must also get approval before starting construction. Applications must include an independent feasibility study, an actuarial study or projections if no entrance fees are taken, and proof of financing or a long‑term financing plan. The Commissioner approves only if the project is viable and the market and financing are sound. A $1,000 expansion application fee applies.

Clear disclosures and fair CCRC contracts

Before you sign or pay, the provider must give you a clear disclosure and the most‑used contract. The disclosure must show fee history and projections, refund terms, services included, reserve funding, audited and five‑year prospective financials, and more. Contracts must list all fees, services, fee‑increase rules, refund terms, and what happens if you cannot pay. Contracts must state any requirement to keep long‑term care insurance or apply for public aid, and include a bold notice advising you to consult advisors. The disclosure must be current (dated within one year plus 160 days and on file), you must acknowledge receipt, and electronic delivery needs your written consent.

Protections when your CCRC hits trouble

If the state finds your community is hazardous or impaired, the provider must file a corrective plan in 45 days and tell residents and depositors within five business days. The Commissioner decides on the plan within 45 days; if rejected, a new plan is due in 30 days. Approved plans must start right away, be shared with residents, and include regular progress reports. If the provider violates the law, the Commissioner can stop new contracts and require rescission offers. If a license is limited or revoked, residents must be notified within five business days and get a plan within 20 business days showing how obligations will be met; if the plan is missing or poor, the Commissioner can hire experts and make the provider pay.

Risky managers can be blocked and removed

The Commissioner can reject a proposed third‑party manager who seems incompetent, untrustworthy, or linked to bad‑faith operations. Providers must immediately remove a manager who has a felony conviction, a final civil fraud judgment, or certain affiliations with an entity that has those judgments or convictions.

Strong enforcement when a CCRC is risky

The Commissioner can deny, restrict, suspend, or revoke licenses for fraud, misstatements, misuse of money, missing filings, weak reserves, contract failures, and other violations. If a revocation order is under appeal, the provider cannot accept new deposits or entrance fees. The Commissioner uses many signals to find a hazardous condition, such as insolvency, bad audits, depleted reserves, late refunds, aging receivables, debt covenant problems, weak cash flow, or management integrity issues.

Stronger cash reserves to protect residents

Communities must keep an operating reserve tied to next year’s operating costs. The required reserve is 25% at 90%+ occupancy; 31.25% at 86–89.9%; 37.5% at 83–85.9%; 43.75% at 80–82.9%; and 50% if below 80%. If occupancy is at least 93% and there is no long‑term debt or the debt‑service coverage ratio is over 2.00, the reserve may be 12.5% unless the Commissioner orders more. In a hazardous condition, the Commissioner can raise the required reserve up to 50% or require the reserve be deposited with the Commissioner, and residents must be notified within 10 business days. Reserve assets are protected from most liens and judgments, with a narrow exception for standard debt‑financing pledges in indentures.

Resident councils and twice‑yearly meetings

Starting December 1, 2025, residents have the right to organize, choose a representative, and form a residents’ council. Provider boards must hold in‑person meetings twice a year that all residents can attend. You must get at least seven days’ notice, and materials or recordings must be available for 60 days. At least one independent board member must attend in person, unless the Commissioner grants a waiver.

Stronger financial reporting and watchdog checks

Providers must get an annual independent audit and file it within 150 days after year‑end. They must also file quarterly unaudited statements and occupancy data within 45 days; the Commissioner can require monthly statements within 45 days. Actuarial studies are due at least every three years (fee‑for‑service‑only providers file projections every five years). Providers must tell the Commissioner and all residents within 10 business days if key events occur, like past‑due entrance fee refunds over 30 days, losing required reserves, or a plan to cut any unit type by 20% or more. The Commissioner may examine the provider and related parties; the provider pays the cost and must share the exam report with residents within 10 business days.

Troubled providers face strict limits

Financially troubled providers face tight limits. If a provider knew or should have known it was impaired, it cannot market or sign new contracts unless the Commissioner gives written permission within 15 days. Providers cannot pay dividends or other equity payouts when they are unsafe or out of actuarial balance. The Commissioner can take away permits or licenses after notice and a hearing for actions like selling without approval, abandoning the community, moving it, or closing.

Limits on lawsuits after refund offers

If a provider offers in writing to rescind and refund all money you paid with interest (minus care costs and agreed charges), you must accept within 30 days. If you do not accept in 30 days, you cannot use the law’s rescission remedy or sue under the civil‑liability section. You must file any claim within three years of the violation.

Fast notice and refunds after license actions

If a permit, certificate, or license is forfeited, the provider must tell all residents and depositors within five business days. If the Commissioner issues a restricted permanent license, the provider must tell residents and depositors within 10 business days about the limits and what must be fixed. After a permanent license is revoked, the provider must keep required reserves, file annual audits and disclosures, and pay fees, but cannot sign new continuing care contracts. After revocation, the provider must also notify depositors within five business days and repay all deposits, then prove to the Commissioner that refunds were made.

Stronger reserve rules to protect residents

Providers must hold an operating reserve and compute it at least twice a year using five‑year projections and the 12‑month daily average occupancy. Qualifying reserve assets include cash, cash equivalents, investment‑grade securities, certain stock funds, or other assets the Commissioner approves, all at fair market value. A reserve may be funded with a surety bond or a clean, irrevocable letter of credit that meets notice and deposit rules (90 days’ nonrenewal notice for letters; 45 days for bond cancellation; deposits due 30 days before expiration or within five business days of instruction). Providers need the Commissioner’s OK to release reserve funds and must notify residents when they ask; the Commissioner decides within five business days after the request is complete. The Commissioner can allow lower or different reserve calculations, exclude new expansion units for 18 months from the reserve math, or require a deposit of reserves with a power of attorney to pay community bills.

Annual disclosures, fees, and privacy rules

Providers must file a revised disclosure within 150 days after fiscal year end and pay a $2,000 annual filing fee. If filed late without an approved extension, a $1,000 late fee applies. The Department posts the revised disclosure within five business days of receipt. The law defines the financial ratios that must appear in disclosures so residents can compare financial health. Many filings, studies, and exam materials sent to the Commissioner are confidential and not public or discoverable.

Licenses and rules for at-home care

No one may arrange or provide continuing care at home without a state license. Only providers with a permanent or restricted permanent license may apply. Each application must include a $500 fee, a draft disclosure, a proposed contract, an actuarial study (or projections if no entrance fees), a market study, CPA‑prepared prospective financials, and proof of a home care license or a contract with a licensed agency. The Commissioner approves only if the filing meets all rules, demand is sufficient, and the program will not harm the provider’s or community’s finances. After licensing, the provider must file an amended disclosure and submit periodic reports as required.

State oversight and filing rules for providers

The law creates a single state licensing and oversight system for continuing care providers under the Department of Insurance. Providers must file documents electronically unless the Commissioner requires a hard copy. The Commissioner can waive or modify rules during emergencies or events beyond a provider’s control and can adopt rules to run the program. If an application is denied, the applicant can seek review within 30 days and a hearing within 30 days after the review result, but application and related fees are not refunded.

Approval required before offering continuing care

Providers must get the Insurance Commissioner’s approval before offering continuing care in North Carolina. They need approval before taking deposits, signing reservation or care contracts, starting construction, or advertising life-care products. Providers that collect entrance fees must also get approval before leasing land that is a major part of the community. The Commissioner reviews lease terms and related‑party ties to protect residents.

Disclosures posted online and kept current

The Commissioner reviews disclosures for completeness, can require clearer language, and may set a standard format. The Department posts each community’s current disclosure online. Providers may file revisions to fix material errors; the Department records and posts them within five business days. After a preliminary certificate or a permanent (or restricted) license, providers must file regular reports, and the Department posts the disclosure online.

State review of managers, quick resident notice

A community must get state approval before hiring an outside manager. The request must include the proposed contract, the manager’s experience, and the reason for the change. The provider must notify all residents in writing within 10 business days after filing the request.

Condo fees cannot exceed care contract

State health licensing of long‑term care stays the same. If a continuing care community is also a condominium, condo rules in Chapter 39A do not apply when the declaration does not add fees beyond the care contract or a separate service contract. This helps prevent extra housing fees for residents. These rules begin December 1, 2025.

Rules for adding new CCRC units

Expansions that add independent living units need state approval and an updated disclosure. If the land is leased, the lease must have the Commissioner’s approval. After approval, the provider may start construction and, once requirements are met, open the new units. The provider must send periodic sales and development reports so the state can track progress.

Sales tax rule updated for providers

Starting December 1, 2025, the sales and use tax law updates cross‑references for continuing care terms. Providers keep paying sales tax as the user on the items they provide to residents, except for alcoholic drinks. This keeps current tax treatment in place for providers.

Faster reviews and tougher enforcement tools

The Commissioner follows strict timelines on filings, from acknowledging receipt within 5 business days to final decisions within set windows. The Commissioner can investigate inside or outside the state and require sworn statements. Civil, criminal, and administrative tools can be used together to enforce the law. Willful violations are crimes (Class 1 misdemeanor).

Confidential filings kept out of lawsuits

Confidential filings and documents given to the Commissioner stay out of private civil lawsuits. The Commissioner and others who received them cannot be forced to testify about those materials. This protects sensitive provider filings from being used in private cases.

New continuing care law starts 2025

The state repeals the old continuing care law and replaces it with a new one. The new Article 64A now governs continuing care providers. The law takes effect December 1, 2025, and applies to offenses and to contracts issued, renewed, or changed on or after that date.

Sponsors & Cosponsors

Cosponsors

Jay Adams
Republican • House
Jeffrey C. McNeely
Republican • House
Ben T. Moss, Jr.
Republican • House
Ray Pickett
Republican • House
Harry Warren
Republican • House

Roll Call Votes

All Roll Calls

Yes: 152 • No: 0

Senate vote • 6/25/2025

HB 357: Continuing Care Retirement Communities Act.-AB

Yes: 46 • No: 0 • Other: 4

House vote • 6/11/2025

HB 357: Continuing Care Retirement Communities Act.

Yes: 106 • No: 0 • Other: 13

Actions Timeline

Ch. SL 2025-58
7/3/2025House
Signed by Gov. 7/3/2025
7/3/2025House
Pres. To Gov. 6/27/2025
6/27/2025House
Ratified
6/26/2025House
Ordered Enrolled
6/25/2025Senate
Passed 3rd Reading
6/25/2025Senate
Passed 2nd Reading
6/25/2025Senate
Placed On Cal For 06/25/2025
6/24/2025Senate
Withdrawn From Cal
6/24/2025Senate
Reptd Fav
6/23/2025Senate
Re-ref Com On Rules and Operations of the Senate
6/19/2025Senate
Reptd Fav
6/19/2025Senate
Re-ref Com On Finance
6/18/2025Senate
Reptd Fav
6/18/2025Senate
Re-ref Com On Judiciary
6/17/2025Senate
Reptd Fav
6/17/2025Senate
Re-ref to Commerce and Insurance. If fav, re-ref to Judiciary. If fav, re-ref to Finance. If fav, re-ref to Rules and Operations of the Senate
6/16/2025Senate
Withdrawn From Com
6/16/2025Senate
Ref To Com On Rules and Operations of the Senate
6/16/2025Senate
Passed 1st Reading
6/16/2025Senate
Regular Message Received From House
6/16/2025Senate
Regular Message Sent To Senate
6/12/2025House
Passed 3rd Reading
6/11/2025House
Passed 2nd Reading
6/11/2025House
Placed On Cal For 06/11/2025
6/10/2025House

Bill Text

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