Florida Insurance Commissioner Testifies on Continuing Care Retirement Communities Before U.S. Senate Special Committee on Aging

Jul 21, 2010


As part of a federal investigation into the risks posed to senior citizens by continuing care retirement communities (“CCRCs”), Florida Insurance Commissioner Kevin McCarty testified in Washington, D.C. before the U.S. Senate Special Committee on Aging (“Committee”) today, July 21, 2010. 

According to a report issued by the Committee, unstable market conditions and poor financial planning have led to financial difficulties and insolvency among some CCRCs.  In addition, it was determined that the process of choosing a CCRC can be extremely complex for seniors, due to disparate state regulations and variations in the type of contract proffered.  To view the report, click here.

Committee Chairman Herbert Kohl (D-WI) and Ranking Member Bob Corker (R-TN) had asked Commissioner McCarty to testify, since Florida is known for its extensive CCRC-related consumer protections and its applicable law is often used as a regulatory model for other states.

In his testimony, Commissioner McCarty provided a comprehensive overview and history of Florida’s experience in regulating CCRCs.  To access his written testimony, click here.

Among the new developments within Florida’s CCRC industry is the “CCRC at Home” concept, in which the resident’s independent living occurs in his or her own home, rather than at an independent living unit at the facility.  A “CCRC at Home” resident  would eventually move to the facility when he or she needs assisted living or skilled nursing services, rather than at the time the residency contract is signed.   In this situation, the resident would typically pay a much smaller entrance fee than if he or she immediately moved into an independent living unit at the facility.

Recently, the Florida Office of Insurance Regulation  (“OIR”) has received requests from CCRCs that wish to add a “CCRC at Home” program to their existing facilities for the purpose of generating more revenue. 

In response to the poor real estate market resulting in potential residents being unable to sell their homes, a  CCRC model has recently been proposed that, if successful, would consist mostly of “CCRC at Home” residents whose entrance fee would be due only upon the sale of their respective homes.  The OIR continues to monitor several trends in the CCRC industry, some of which are regarded as favorable, including an expansion of services to assist in generating additional facility revenue.

Commissioner McCarty related that, ” . . . in testament to the success of Florida’s regulatory framework . . .” it has been almost 20 years since a Florida CCRC has failed.  He also discussed other aspects of Florida’s CCRC regulation, which includes verifying that CCRC owners and management are responsible, ensuring information is properly disclosed to residents and prospective residents; ensuring CCRC compliance with licensure requirements and financial oversight of CCRC facilities.

With HB 1253 having become law on July 1, 2010, Florida’s disclosure requirements to CCRC residents and prospective residents were expanded to include certain information and reports.

Florida law defines CCRCs as facilities that furnish shelter and either nursing care or personal services upon payment of an entrance fee pursuant to a contract.   Currently, there are 73 licensed CCRCs in Florida serving nearly 30,000 residents. The total revenue reported for Florida CCRCs was approximately $1.4 billion in 2009.

To view panelists’ written testimony at today’s Committee hearing, click on the hyperlinks below.


Panel Statements

  • Alicia Cackley, Director, Financial Markets and Community Investment, US Government Accountability Office, Washington, DC
  • Kevin McCarty, Insurance Commissioner, Florida Office of Insurance Regulation, Tallahassee, FL
  • Charles Prine, Resident of Concordia of the South Hills CCRC, Mt. Lebanon, PA
  • Katherine Pearson, Professor, Dickinson School of Law, Pennsylvania State University and Director, Elder Law and Consumer Protection Clinic, University Park, PA
  • David Erickson, Vice President of Legal Affairs, Covenant Retirement Communities on behalf of the American Association of Homes and Services for the Aging, Skokie, IL



Should you have any questions or comments, please contact Colodny Fass.