PRINTER'S NO. 2080
No. 1399 Session of 2008
INTRODUCED BY VANCE, RAFFERTY, ERICKSON, ORIE, BAKER, EARLL AND
O'PAKE, MAY 23, 2008
REFERRED TO BANKING AND INSURANCE, MAY 23, 2008
AN ACT
1 Amending the act of June 18, 1984 (P.L.391, No.82), entitled "An
2 act regulating continuing-care facilities; imposing duties
3 upon the Insurance Commissioner; requiring certificate of
4 authority; revocation of certificates; regulating disclosure
5 statements; advertisement; regulating financial reserves;
6 requiring escrows; regulating residents' agreements;
7 establishing an advisory council; granting right of
8 organization; regulating liquidation and rehabilitation;
9 imposing civil liability; providing for the right to
10 investigate and subpoena, liens, cross-collateralization,
11 cease and desist orders and audits; imposing fees and
12 regulations; and making criminal penalties," further
13 providing for investigations and subpoenas and for audits.
14 The General Assembly of the Commonwealth of Pennsylvania
15 hereby enacts as follows:
16 Section 1. Sections 18 and 19 of the act of June 18, 1984
17 (P.L.391, No.82), known as the Continuing-Care Provider
18 Registration and Disclosure Act, are amended to read:
19 Section 18. Investigations and subpoenas.
20 (a) The department may make such public or private
21 investigations or examinations within or outside of this
22 Commonwealth as the commissioner deems necessary to determine
23 whether any person has violated or is about to violate any
1 provision of this act or any rule or order hereunder, or to aid
2 in the enforcement of this act or in the prescribing of rules
3 and forms hereunder and may publish information concerning any
4 violation of this act or any rule or order hereunder.
5 (b) For the purpose of any investigation, examination or
6 proceeding under this act, the commissioner or any officer
7 designated by the commissioner may administer oaths and
8 affirmations, subpoena witnesses, compel their attendance, take
9 evidence and require the production of any books, papers,
10 correspondence, memoranda, agreements or other documents or
11 records which the commissioner deems relevant or material to the
12 inquiry, all of which may be enforced in any court of this
13 Commonwealth which has appropriate jurisdiction.
14 Section 19. [Audits] Authority, scope and scheduling of
15 examinations.
16 [The commissioner or his designee shall visit each facility
17 offering continuing care in this Commonwealth to examine its
18 books and records at least once every four years.]
19 (a) Every provider subject to examination in accordance with
20 this act must keep all books, records, accounts, papers,
21 documents and any or all computer or other recordings relating
22 to its property, assets, business and affairs in such manner and
23 for such time periods as the department, in its discretion, may
24 require in order that its authorized representatives may readily
25 verify the financial condition of the company or person and
26 ascertain whether the company or person has complied with the
27 laws of this Commonwealth. A multifacility provider may be
28 required to provide the financial statements of the component
29 parts at the request of the commissioner or his designee. [The]
30 Unless specifically directed otherwise by regulations
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1 promulgated by the department, the financial statements need not
2 be certified audited reports.
3 (b) The department or any of its examiners may conduct an
4 examination of the books and records of each provider offering
5 continuing care in this Commonwealth as often as the
6 commissioner, in the commissioner's sole discretion, deems
7 appropriate, but shall conduct an examination at least once in
8 the first five-year period and once in the second five-year
9 period following a provider's receipt of a certificate of
10 authority under this act.
11 (c) In scheduling and determining the nature, scope and
12 frequency of examinations under subsection (b), the commissioner
13 shall consider matters including all of the following:
14 (1) The results of financial statement analyses.
15 (2) Changes in management or ownership.
16 (3) Reports of independent certified public accountants.
17 (4) The volume or nature of complaints by residents.
18 (5) The length of time a provider or a facility has been
19 furnishing continuing care.
20 (6) Changes to disclosure statements or resident
21 agreements.
22 (7) The expansion of existing facilities or addition of
23 new facilities.
24 (8) Other information or criteria, which in the sole
25 discretion of the commissioner, is relevant to the provider's
26 financial condition or compliance with regulatory
27 requirements.
28 (d) For purposes of completing an examination of a provider,
29 the department may examine or investigate any person or the
30 business of any person insofar as the examination or
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1 investigation is, in the sole discretion of the commissioner,
2 necessary or material to the examination of the provider.
3 (e) Examinations under this section shall be conducted
4 pursuant to the procedures set forth under sections 904, 905,
5 906, 907 and 908 of the act of May 17, 1921 (P.L.789, No.285),
6 known as The Insurance Department Act of 1921, and 31 Pa. Code
7 Ch. 12 (relating to cost of insurance department examinations).
8 Section 2. This act shall apply to examinations instituted
9 on or after the effective date of this act.
10 Section 3. This act shall take effect in 60 days.
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