§ 1792. — 1792. (Amended by Stats. 2004, Ch. 129, Sec. 2.)

California § 1792.

• Jurisdiction: California
• Code HSC: Health and Safety Code - HSC
• Div. 2.: DIVISION 2. LICENSING PROVISIONS
• Ch. 10.: CHAPTER 10. Continuing Care Contracts
• Art. 6.: ARTICLE 6. Reporting and Reserve Requirements

Text

(a)
A provider shall maintain at all times qualifying assets as a liquid reserve in an amount that equals or exceeds the sum of the following:
(1)
The amount the provider is required to hold as a debt service reserve under Section 1792.3.
(2)
The amount the provider must hold as an operating expense reserve under Section 1792.4.
(b)
The liquid reserve
requirement described in this section is satisfied when a provider holds qualifying assets in the amount required. Except as may be required under subdivision (d), a provider is not required to set aside, deposit into an escrow, or otherwise restrict the assets it holds as its liquid reserve.
(c)
A provider shall not allow the amount it holds as its liquid reserve to fall below the amount required by this section. In the event the amount of a provider’s liquid reserve is insufficient, the provider shall prudently eliminate the deficiency by increasing its assets qualifying under Section 1792.2.
(d)
The department may increase the amount a provider is required to hold as its liquid reserve or require that a provider immediately place its liquid reserve into an escrow account meeting the requirements of Section 1781 if the department has reason to believe the provider is any of the
following:
(1)
Insolvent.
(2)
In imminent danger of becoming insolvent.
(3)
In a financially unsound or unsafe condition.
(4)
In a condition such that it may otherwise be unable to fully perform its obligations pursuant to continuing care contracts.
(e)
For providers that have voluntarily and permanently discontinued entering into continuing care contracts, the department may allow a reduced liquid reserve amount if the department finds that the reduction is consistent with the financial protections imposed by this article. The reduced liquid reserve amount shall be based upon the percentage of residents at the continuing care retirement community who have continuing care
contracts.

Legislative History

Amended by Stats. 2004, Ch. 129, Sec. 2. Effective January 1, 2005.