376.945. Escrow account, amount required--principal, how released, investment.
Escrow account, amount required--principal, how released, investment.
376.945. The department shall, as a condition of the issuanceof a certificate of authority pursuant to section 376.935,require that the provider establish a reserve of an amount equalto at least fifty percent of any entrance fee paid by the firstoccupant of a living unit under a life care contract. Thereserve shall be maintained by the provider on a current basis,in escrow with a bank, trust company, or other escrow agentapproved by the department. Such reserve shall be amortized andearned by the provider at the rate of one percent per month onthe balance of the reserve, provided, however, that at no timeshall the entrance fee reserve together with all interest earnedthereon total less than an amount equal to one and one-half timesthe percentage of the annual long-term debt principal andinterest payments of the provider applicable only to living unitsoccupied under life care contracts. Such portion of eachentrance fee as is necessary to maintain the entrance fee reserveas set forth herein shall be paid to the reserve fund for thesecond and all subsequent occupancies of a living unit occupiedunder a life care contract. In addition, each provider shallestablish and maintain separately for each facility, a reserveequal to not less than five percent of the facility's totaloutstanding balance of contractually obligated move-out refundsat the close of each fiscal year. All reserves requiredhereunder for move-out refunds shall be held in liquid assetsconsisting of federal government or other marketable securities,deposits, or accounts insured by the federal government. Thissection shall be applicable only to life care contracts executedfor occupancy of living units constructed after September 28,1981.
(L. 1981 S.B. 84 § 7, A.L. 1988 H.B. 1709)