(a) Before the execution of a contract to provide continuing care, or before the transfer of any money or other property to a provider by or on behalf of a prospective resident, whichever shall occur first, the provider shall deliver to the person with whom the contract is to be entered into, or to that person’s legal representative, a conspicuous statement notifying the prospective resident that:

Terms Used In Connecticut General Statutes 17b-522

  • another: may extend and be applied to communities, companies, corporations, public or private, limited liability companies, societies and associations. See Connecticut General Statutes 1-1
  • Appeal: A request made after a trial, asking another court (usually the court of appeals) to decide whether the trial was conducted properly. To make such a request is "to appeal" or "to take an appeal." One who appeals is called the appellant.
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Common law: The legal system that originated in England and is now in use in the United States. It is based on judicial decisions rather than legislative action.
  • Contract: A legal written agreement that becomes binding when signed.
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Embezzlement: In most states, embezzlement is defined as theft/larceny of assets (money or property) by a person in a position of trust or responsibility over those assets. Embezzlement typically occurs in the employment and corporate settings. Source: OCC
  • Escrow: Money given to a third party to be held for payment until certain conditions are met.
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • Felony: A crime carrying a penalty of more than a year in prison.
  • Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
  • Fraud: Intentional deception resulting in injury to another.
  • Injunction: An order of the court prohibiting (or compelling) the performance of a specific act to prevent irreparable damage or injury.
  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • Mortgage loan: A loan made by a lender to a borrower for the financing of real property. Source: OCC
  • Nolo contendere: No contest-has the same effect as a plea of guilty, as far as the criminal sentence is concerned, but may not be considered as an admission of guilt for any other purpose.
  • Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
  • Personal property: All property that is not real property.
  • Statute: A law passed by a legislature.

(1) A continuing-care contract is a financial investment and his investment may be at risk;

(2) The provider’s ability to meet its contractual obligations under such contract depends on its financial performance;

(3) The prospective contract holder is advised to consult an attorney or other professional experienced in matters relating to investments in continuing-care facilities before he signs a contract for continuing care; and

(4) The department does not guarantee the security of his investment.

(b) Before the execution of a contract to provide continuing care, or before the transfer of any money or other property to a provider by or on behalf of a prospective resident, whichever shall occur first, the provider shall deliver to the person with whom the contract is to be entered into, or to that person’s legal representative, a disclosure statement. The text of the disclosure statement shall contain, to the extent not clearly and completely set forth in the contract for continuing care attached as an exhibit thereto, at least the following information:

(1) The name and business address of the provider and a statement of whether the provider is a partnership, corporation or other legal entity;

(2) The names of the officers, directors, trustees, or managing and general partners of the provider, the names of persons having a five per cent or greater ownership interest in the provider, and a description of each such person’s occupation with the provider;

(3) A description of the business experience of the provider and of the manager of the facility if the facility will be managed on a day-to-day basis by an organization other than the provider, in the administration of continuing-care contracts or in the administration of similar contractual arrangements;

(4) A description of any matter in which the provider, any of the persons described in subdivision (2) of this subsection, or the manager has been convicted of a felony or pleaded nolo contendere to a felony charge, or held liable or enjoined in a civil action by final judgment, if the felony or civil action involved fraud, embezzlement, fraudulent conversion or misappropriation of property; or is subject to a currently effective injunction or restrictive or remedial order of a court of record, within the past five years has had any state or federal license or permit suspended or revoked as a result of an action brought by a governmental agency or department, rising out of or relating to business activity or health care, including, but not limited to, actions affecting the operation of a foster care facility, nursing home, retirement home, residential care home, or any facility subject to sections 17b-520 to 17b-535, inclusive, or a similar statute in another state or country;

(5) A statement as to whether or not the provider is, or is affiliated with, a religious, charitable, nonprofit, or for-profit organization; the extent of the affiliation, if any; the extent to which the affiliate organization will be responsible for the financial and contractual obligations of the provider; and the provision of the federal Internal Revenue Code, if any, under which the provider or affiliate is exempt from the payment of income tax;

(6) The location and a description of the physical property or properties of the provider, existing or proposed; and, if proposed, the estimated completion date or dates, whether or not construction has begun, and the contingencies subject to which construction may be deferred;

(7) The goods and services provided or proposed to be provided without additional charge under the contract for continuing care including the extent to which medical or nursing care or other health-related benefits are furnished;

(8) The disposition of interest earned on entrance fees or other deposits held in escrow;

(9) A description of the conditions under which the continuing-care contract may be terminated, whether before or after occupancy, by the provider or by the resident. In the case of termination by the provider, a description of the manner and procedures by which a decision to terminate is reached by the provider, including grounds for termination, the participation of a resident’s council or other group, if any, in reaching such a decision, and any grievance, appeal or other similar procedures available to a resident whose contract has been terminated by the provider;

(10) A statement setting forth the rights of a surviving spouse who is a resident of the facility and the effect of the continuing-care contract on the rights of a surviving spouse who is not a resident of the facility, in the event of the death of a resident, subject to any limitations imposed upon such rights by statute or common law principles;

(11) A statement of the effect of a resident’s marriage or remarriage while in the facility on the terms of such resident’s continuing-care contract;

(12) Subject to the provisions of subsection (j) of this section, a statement of the provider’s policy regarding disposition of a resident’s personal property in the event of death, temporary or permanent transfer to a nursing facility, or termination of the contract by the provider;

(13) A statement that payment of an entrance fee or other transfer of assets pursuant to a continuing-care contract may have significant tax consequences and that any person considering such a payment or transfer may wish to consult a qualified advisor;

(14) The provisions that have been made or will be made by the provider for reserve funding and any other security to enable the provider to perform fully its obligations under continuing-care contracts, including, but not limited to, escrow accounts established in compliance with sections 17b-524 and 17b-525, trusts or reserve funds, together with the manner in which such funds will be invested and the names and experience of the persons making or who will make investment decisions;

(15) The provider’s financial statements, including a balance sheet, income statement and statement of cash flow, associated notes or comments to these statements, audited by an independent certified public accounting firm for the two most recent fiscal years of the provider or such shorter period of time as the provider shall have been in existence;

(16) Subject to the provisions of subsection (j) of this section, if the operation of the facility has not yet commenced, or if the construction of the facility is to be completed in stages, a statement of the anticipated source and application of the funds used or to be used in the purchase or construction of the facility or each stage of the facility, including:

(A) An estimate of such costs as financing expense, legal expense, land costs, marketing costs, and other similar costs which the provider expects to incur or become obligated for prior to the commencement of operations of each stage of the facility;

(B) A description of any mortgage loan or any other financing intended to be used for the financing of the facility or each stage of the facility, including the anticipated terms and costs of such financing;

(C) An estimate of the total entrance fees to be received from or on behalf of residents at or prior to commencement of operation of each stage of the facility; and

(D) An estimate of the funds, if any, which are anticipated to be necessary to fund start-up losses and provide reserve funds to assure full performance of the obligations of the provider under continuing-care contracts;

(17) Pro forma cash flow statements for the facility for the next three fiscal years, including a summary of projections used in the assumptions for such pro forma statements, including, but not limited to, anticipated resident turnover rates, average age of residents, health care utilization rates, the number of health care facility admissions per year, days of care per year and the number of permanent transfers;

(18) The facility’s current rate schedules for entrance fees, monthly fees, fees for ancillary services and current occupancy rates;

(19) A description of all entrance fees and periodic charges, if any, required of residents and a record of past increases in such fees and charges during the previous five years;

(20) A statement that all materials required to be filed with the department are on file, a brief description of such materials, and the address of the department at which such materials may be reviewed;

(21) The cover page of the disclosure statement shall state, in a prominent location and type face, the date of the disclosure statement and that registration does not constitute approval, recommendation, or endorsement by the department or state, nor does such registration evidence the accuracy or completeness of the information set out in the disclosure statement;

(22) If the construction of the facility is to be completed in stages, a statement as to whether all services will be provided at the completion of each stage and, if not, the services that will not be provided listed in bold print;

(23) A sworn statement of the applicable escrow agents to the effect that the escrows required by sections 17b-524 and 17b-525 have been established and maintained or an independent certified public accounting firm has verified such escrow accounts.

(c) Each provider operating a facility in this state shall make the information filed with the department, pursuant to this section, available to each such resident for viewing during regular business hours and, upon request, shall provide such resident with a copy of the most recent filing with the department. Each provider shall notify each resident, at least annually, of the right to view the filings and of the right to a copy of the most recent filing.

(d) The registration of a facility pursuant to section 17b-521 shall remain effective unless withdrawn by the provider or unless the provider fails to file the documents specified in this section within one hundred fifty days following the end of the first fiscal year in which such registration is filed. The provider shall file a revised disclosure statement at least annually with the commissioner. The provider shall also file a narrative describing any material differences between the pro forma income and cash flow statements filed pursuant to this section and the actual results of operations during the most recently concluded fiscal year. A provider may revise its previously filed disclosure statement at any time if, in the opinion of the provider, revision is necessary to prevent the disclosure statement from containing a material misstatement of fact or from omitting a material fact required to be included in the statement. Only the most recently filed disclosure statement, as amended from time to time, shall be deemed current for the purposes of sections 17b-520 to 17b-535, inclusive.

(e) The facility shall amend the most recently filed disclosure statement prior to undertaking major facility construction, renovation, or expansion or change of ownership to avoid a material misstatement or omission of a material fact.

(f) (1) Not more than sixty nor less than ten days before the execution of a contract to provide continuing care, the provider shall deliver a current disclosure statement to the person with whom the contract is to be entered into or to that person’s legal representative.

(2) Not more than sixty nor less than ten days before a person occupies a continuing care facility, the provider shall deliver a revised and up-to-date disclosure statement to the prospective resident or to that person’s legal representative, except that if there have been no revisions to the disclosure statement previously delivered pursuant to subdivision (1) of this subsection, the provider shall deliver a statement to the prospective resident or representative that there have been no revisions to the original disclosure statement.

(g) The statement required under subsections (a) and (b) of this section shall be signed and dated by the prospective resident before the execution of a contract to provide continuing care or before the transfer of any money or other property to a provider by or on behalf of the prospective resident. Each such statement shall contain an acknowledgment that such statement and the continuing-care contract have been reviewed by the prospective resident or his legal representative. Such signed statements shall be kept on file by the provider for a period of not less than the term of the contract.

(h) Each statement required under subsections (a) and (b) of this section and the continuing-care contract shall be in language easily readable and understandable in accordance with the provisions of subsections (a) and (b) of section 42-152.

(i) A copy of the standard form or forms of the continuing-care contract used by the provider shall be attached as an exhibit to each disclosure statement.

(j) The provisions of subdivisions (12) and (16) of subsection (b) of this section shall not apply to a continuing-care contract for the provision of care in a person’s home.

(k) The commissioner may adopt regulations in accordance with the provisions of chapter 54 to specify any additional information required in the disclosure statement.