Connecticut laws/regulations; Other States laws/regulations; Program Description;

OLR Research Report

September 30, 2010




By: Robin K. Cohen, Principal Analyst

You asked us to compare the regulation of CCRCs in Connecticut, California, Florida, and New York. For a detailed discussion of Connecticut's law, see 2010-R-0397.


CCRCs are retirement communities that provide, generally under “life care” contracts, independent living units and a continuum of long-term care services to elderly people, allowing them to “age in place.” They generally require a very large upfront payment from residents when they enter into the contracts, along with a monthly maintenance fee.

The regulatory framework of the states contains common elements, but California, Florida, and New York appear to regulate the CCRC industry more stringently.

The four states require at least one state agency to oversee CCRCs. California, Florida, and New York require CCRCs to get state certficiates of authority to operate, while Connecticut simply reviews and acknowledges receipt of disclosure statements.

All four states require CCRCs to provide substantial disclosures of financial information attesting to their fiscal soundness; provide ongoing reports on their operations; and include specific information in their continuing care contracts.

All four states have minimum requirements for liquid reserves and allow individuals to cancel contracts and receive refunds. Connecticut is the only one of the four states that does not require some form of resident representation in CCRCs. Also, California and New York establish resident bills of rights.

Connecticut allows, but does not require, periodic audits of CCRCs, while the other three require them.

In all four states, the laws establish maximum penalties for violations of the CCRC law.

CGS 17b-520, et. seq.; Conn. Agency Regs., 17b-533-1, et. seq.

Cal. Health and Safety Code, Ch. 10, 1770, et. seq.

Fla. Laws, Chapter 651

N.Y. Public Health Law 46; 10 NYCRR 900.1, et. seq.


CCRCs provide flexible housing options, a coordinated system of services and amenities, and a continuum of health care services to residents. The non-health services include dining, housekeeping, social and recreational programs, and transportation. For the most part, the communities are designed for older independent adults who are in reasonably good health. Their goal is to enable residents to avoid having to move, except to another level of care within the community when their needs change and they require more care and supervision.

Residents enter into contracts for the services and generally pay a large upfront fee as well as monthly maintenance fees. The fees vary depending on the type of contract, size of the housing unit, and nature of the services. Federal law does not regulate the facilities, and state regulation varies on some of the key regulatory indicators, including financial disclosures and inspections.


In all four states, the state agencies that license health care institutions also license any of these institutions (such as nursing homes) located within the CCRCs.

In Connecticut, the Department of Social Services (DSS) has primary responsibility for regulating CCRCs. Among other things, DSS is responsible for reviewing the financial statements and reports that CCRCs must submit when they apply for registration. DSS' Certificate of Need and Rate Setting Division runs the program for the department.

As is the case in Connecticut, California uses one entity to administer its CCRC law, the Department of Social Services. It has a designated Continuing Care Contracts branch that handles the day-to-day regulatory operations.

In Florida, several agencies are involved with CCRC administration. The Office of Insurance Regulation (OIR) authorizes and monitors CCRCs' operations and determines their financial status and management capabilities. The Agency for Health Care Administration licenses the facilities in the communities that provide health care to residents, and the Department of Financial Services may become involved after CCRC contracts have been signed, usually through its helpline.

New York, like Florida, has several agencies regulating CCRCs. The insurance department must approve the actuarial principles, financial feasibility, and monthly care fees the CCRC intends to use. The social services department must approve CCRCs that have adult care facility beds located in them. The Public Health Council must approve (1) nursing homes and any other health care facilities and (2) health services the resident can receive. And the attorney general must approve CCRC applications involving a cooperative condominium or other equity arrangement for any independent living units.

Also in New York, a Life Care Community Council (comprising state agency heads, the attorney general, and public members) coordinates oversight and assigns review and regulatory responsibility to the appropriate agencies.


California, Florida, and New York require CCRCs to have operating certificates. Connecticut merely requires CCRC providers to submit financial statements and certain other assurances, which DSS must review and acknowledge.

In California, Florida, and New York, the state agencies responsible for regulating CCRCs issue the certificates and the CCRCs may not begin to operate before they get these certificates. California and Florida also issue provisional certificates, which allow the CCRC to begin collecting entrance fees and reservation deposits from prospective residents. Fees go into escrow accounts until the agency issues a certificate of authority. California CCRCs must also obtain permits to accept deposits.


Because the CCRC model requires residents to make a large financial commitment in terms of the entrance fees and monthly maintenance costs, all four states require CCRCs to prepare very detailed financial statements to the pertinent regulatory agency before they begin to operate. The statements must include any financial risks a potential resident could face. The CCRCs must also provide copies of these statements to prospective residents before they can enter into contracts with them. While financial disclosures vary, all four states require disclosure of key contract and financial terms (see OLR report 2010-R-0397 for a more detailed list of what Connecticut requires).

Criminal Background Information

All four states require the disclosure of criminal background and other information on the provider and other specified persons related to the CCRC provider. In Connecticut, only felony convictions that involve certain financial crimes (e.g., embezzlement) need to be included in the criminal background information, while in New York, any convictions must be included. New York also requires the statement to indicate whether any of these individuals had a bankruptcy discharge. California and Florida require CCRCs to describe felony convictions and nolo contender pleas for financial crimes these parties have committed.


All four states require CCRC to submit annual reports to a pertinent administrative agency. Among other things, Connecticut's report must include financial statements (including accountant-certified balance sheets) showing actuarial soundness for the following five years; rate schedules; and occupancy, turnover, and health service utilization rates. After operating for one year, CCRCs must also provide DSS with revised disclosure statements, including financial statements for that year, along with a description of any differences between the new disclosure statement and the previous one.

In California, CCRCs with either provisional or final certificates of authority, and CCRCs that have inactive certificates, must file annual financial reports. These must include audited statements and required reserve calculations and be accompanied by certified public accountants' (CPA) opinions.

Florida requires the reports to show the community's condition. They must include any changes to the financial disclosure statement, as well as CPA-audited financial statements. If the regulatory agency determines that it needs to monitor the CCRC more frequently, it can require these reports quarterly.

New York requires annual computations of long-term debt service and projected annual revenue and expense summaries for the next 10 years.


All four states require CCRCs to have liquid reserves to cover both debt service and operating expenses. All require 12 months of reserves for debt service. For operating expenses, the reserve requirements vary as follows: Connecticut, one month; California and Florida, 75 days; and New York, six months plus 12 months of reserves for repairs and replacements.


All four states allow prospective residents to cancel their CCRC contracts within a certain amount of time and receive all or most of their money back. This period is generally referred to as a “cooling off” period. (After this period, the contracts often require that the unit be resold. Once this occurs, the entrance fee, less a set percentage, are refunded.)

Connecticut has the shortest “cooling off” period of the four states. It allows cancellation, before occupancy, within 30 days of the contract's execution for a full refund less costs incurred that were part of the contract and a service charge of up to the greater of $1,000 or 2% of the entrance fee.

California allows cancellation within 90 days once the CCRC unit is occupied. All fees are refunded less a reasonable fee to cover costs and pay the reasonable value of services rendered. Equity project CCRCs can also impose a resale fee on sellers. (An equity project CCRC is one in which the resident actually owns the unit and benefits from increased property values if the unit is resold.)

In Florida, an individual who has signed a contract, but has not yet moved in to the CCRC, can cancel the contract for a full refund without penalty within seven days of signing it and get a full refund. Once a resident occupies a unit, the refund is prorated, and the CCRC is allowed to keep up to 2% per month of occupancy and up to a 5% processing fee.

In New York, CCRCs must provide a full refund of the entrance fee and other prepayment without penalty to anyone who cancels the contract within 72 hours of signing it. Once the unit is occupied, the CCRC can deduct the actual costs of services provided and costs of refurbishing the unit. After 90 days, the CCRC can deduct up to 2% of the entrance fee per month occupied and a one-time 4% processing fee.


Connecticut law requires CCRC contracts to contain a fairly short list of provisions, including those related to contract rescissions, what happens when a resident cannot occupy the unit, and whether ongoing care will be provided if a resident's financial circumstances change.

California's law, on the other hand, requires CCRC contracts to contain nearly 40 provisions. This includes a list of all services to be provided, the length of the contract, and the conditions for transferring the resident. The service list must include the same services as those required of residential care facilities for the elderly, such as three meals a day and house rules.

Florida's CCRC contracts must also specify all services that will be provided; describe cancellation terms; and describe how monthly charges could be changed, along with a right to notice when these changes occur, among other provisions.

New York's list of contract items includes what the CCRC will do if the resident does not pay his or her monthly fees, how residents can be transferred, and cancellation and refund terms, among several other things.



California, Florida, and New York, but not Connecticut, require CCRC's to ensure that residents have some input into the CCRC's operations.

California requires the CCRC's governing body to meet at least twice yearly with residents or a resident association to discuss all aspects of the community. CCRCs must also convene meetings whenever they intend to increase their monthly care fees. At these meetings they must justify these increases and allow residents to present any issues they have with the increases. CCRCs must also share budgetary information with the residents and consult with them during the annual budget process.

In Florida, CCRCs must allow their residents to meet quarterly with the CCRC's governing body to freely discuss the CCRC's finances and any problems they have with the CCRC. Residents may also discuss proposed changes in policies, programs, and services. When CCRCs want to raise the monthly maintenance fee, they must provide residents with a written summary of the reasons why. The law also allows residents to create their own council.

New York law gives CCRC residents the right to self-organize and be represented by one or more individuals that they choose. CCRC boards must meet at least four times a year with resident representatives, as well as hold an annual meeting with all residents.

Connecticut law requires CCRCs to make the information in their annual reports available to residents and notify them of their rights in this regard.

Resident Bill of Rights

California and Florida law establish similar bills of rights for CCRC residents; Connecticut and New York do not. The bills include the right to live in an environment that enhances personal dignity, helps maintain their independence, and encourages self-determination. Residents must be permitted to exercise these rights without fear of retaliation.


California, Florida, and New York, but not Connecticut, require state administrative agencies to audit CCRCs periodically; Connecticut law permits this.

California requires the reviews every three years. The reviews must address the CCRCs' physical condition, their compliance with state law, and their its performance of the services required under their continuing care contracts.

Florida's OIR can at any time and must, at least once every five years, examine CCRCs in the same way that they examine insurance companies.

New York requires audits at least once every three years. Audits may include site visits and evaluate fiscal and statistical records.


All four states' laws contain both civil and criminal remedies for violations of their CCRCs laws.


Connecticut law permits DSS to investigate violations of CCRC laws. At the commissioner's request, the attorney general can issue injunctions and seek restitution.

CCRCs that enter into contracts (1) without first delivering a disclosure statement or (2) that rely on a disclosure statement that omits a required material fact or is otherwise misleading, are liable to the person signing the contract for damages and repayment of all fees, less the reasonable value of care and lodging provided before the violation occurs. A person has six years from the date the contract is executed to bring a lawsuit.

Finally, anyone who willfully and knowingly violates the CCRC law faces a fine of up to $10,000, one year imprisonment, or both.


California establishes specific CCRC offenses (considered misdemeanors) and penalties for violations. DSS can also issue citations and impose civil penalties of up to $1,000 per violation. It can impose these penalties instead of conditioning, revoking, or suspending permits or certificates. Like Connecticut, it can seek relief from the courts. DSS can either institute its own proceedings or ask the attorney general to pursue injunctive relief. The law also gives each district attorney in the state the authority to prosecute violators when DSS requests such.


Florida law establishes grounds for the OIR to refuse, suspend, or revoke certificates of authority. Like California, the state can levy civil penalties of up to $1,000 in lieu of taking the certificate actions. The state can impose a penalty of up to $10,000 for each violation a provider knowingly or willingly commits. Additionally, individuals who violate the state's CCRC law, including operating a CCRC without a valid certificate of authority, can be found guilty of a 3rd degree felony, which carries a penalty of up to five years imprisonment, a maximum $5,000 fine, or both.

New York

New York's law also contains both civil and criminal remedies for violations of the CCRC law. As in Connecticut, CCRCs that enter into contracts without first providing disclosure statements and annual reports or provide misleading information are liable for damages and repayment of all fees paid, less any costs for care and housing they received until the violation's discovery.

Anyone who knowingly violates the law is guilty of a class A misdemeanor, the penalty for which is up to a year imprisonment, a maximum $1,000 fine, or both.


Table 1 compares some of Connecticut's CCRC regulatory functions with those in the three other states.

Table 1: Comparison of CCRC Regulatory Requirements


Certificate to Operate

Right of Residents to Organize

Resident Bill of Rights

Liquid Reserves

Cooling Off Period/Refund

Required Audits

Maximum Financial Penalty for Violations

































Source: Various state laws (see p. 2 of report)