2009 Iowa Code
Title 13 - Commerce
Subtitle 1 - Insurance and Related Regulation
CHAPTER 523D - RETIREMENT FACILITIES
523D.3 - DISCLOSURE STATEMENT.

        523D.3  DISCLOSURE STATEMENT.
         1.  At the time of, or prior to, the execution of a contract to
      provide continuing care or senior adult congregate living services,
      or at the time of, or prior to the provider's acceptance of part or
      all of the entrance fee by or on behalf of a prospective resident,
      whichever occurs first, the provider shall deliver a disclosure
      statement to the person, and to the person's personal representative
      if one is appointed, with whom the contract is to be entered into.
      Unless incorporated by reference, in whole or in part, the disclosure
      statement shall not constitute part of the contract between the
      resident and provider.  The disclosure statement shall contain all of
      the following information unless the information is in the contract,
      a copy of which must be attached to the statement:
         a.  The name and business address of the provider and a
      statement of whether the provider is a partnership, corporation, or
      other legal entity.
         b.  The names and business addresses of the officers,
      directors, trustees, managing or general partners, and any person
      having a ten percent or greater equity or beneficial interest in the
      provider and a description of such person's interest in or occupation
      with the provider.
         c.  With respect to each person covered by paragraph "b",
      and if the facility will be managed on a day-to-day basis by a person
      identified pursuant to paragraph "b", or with respect to the
      proposed manager, the following information:
         (1)  A description of the business experience of the person, if
      any, in the operation or management of similar facilities.
         (2)  The name and address of any professional service, or other
      entity in which the person has, or which has in the person, a ten
      percent or greater interest and which has provided goods, leases, or
      services to the facility of a value of five hundred dollars or more
      within the prior twelve months or which has contracted to provide
      goods, leases, or services to the facility of a value of five hundred
      dollars or more within a year, including a description of the goods,
      leases, or services and their actual or anticipated cost to the
      facility or provider.
         (3)  A description of any matter resulting in the person's
      conviction of a felony or a plea of nolo contendere to a felony
      charge, or a description of any matter where the person was found to
      be liable or enjoined in a civil action by final judgment if the
      felony or civil action involved fraud, embezzlement, fraudulent
      conversion, misappropriation of property, or a similar felony
      involving theft or dishonesty.
         (4)  A description of any matter in which the person is subject to
      a currently effective injunctive or restrictive order of a court, or
      a description of any matter within the past five years where the
      person has had a state or federal license or permit suspended or
      revoked as a result of an action brought by a governmental agency of
      this or any state or the division of insurance, arising out of or
      relating to business activity or health care, including, without
      limitation, actions affecting a license to operate a foster care
      facility, health care facility, retirement home, home for the aged,
      or facility licensed under this chapter or a similar law of another
      state.
         d.  A statement, if applicable, containing the following:
         (1)  Whether the provider is or ever has been affiliated with a
      for-profit organization or with a religious, charitable, or other
      nonprofit organization.
         (2)  The nature of the affiliation.
         (3)  The extent to which the affiliate organization is responsible
      for the financial and contractual obligations of the provider.
         (4)  The provision of the federal Internal Revenue Code, if any,
      under which the provider or affiliate is exempt from the payment of
      federal income tax.
         e.  The location and description of the physical property or
      properties of the facility, existing or proposed, and, to the extent
      proposed, the estimated completion date or dates, whether or not
      construction has begun, and the contingencies subject to which
      construction may be deferred.
         f.  The services provided or proposed to be provided under
      contracts for continuing care or senior adult congregate living
      services at the facility, including the extent to which medical care
      is furnished.  The disclosure statement shall clearly state which
      services are included in basic contracts and which services are made
      available at or by the facility at extra charge.
         g.  A description of all fees required of residents, including
      the entrance fee and periodic charges, if any.  The description shall
      include the manner by which the provider may adjust periodic charges
      or other recurring fees and the limitations on such adjustments, if
      any.
         h.  The provisions which have been made or will be made, if
      any, to provide reserve funding or security to enable the provider to
      fully perform its obligations under contracts to provide continuing
      care or senior adult congregate living services at the facility,
      including the establishment of escrow accounts, trusts, or reserve
      funds, together with the manner in which the funds will be invested
      and the names and experience of persons who will make the investment
      decisions.
         i.  Certified financial statements of the provider, for all
      parts of an operation covered by the contract, including the health
      center or nursing home portion of the continuing care retirement
      community, if those services are included in the contract, but the
      disclosure statement may exclude services or operations not provided
      to residents as senior adult congregate living services under the
      contract, which shall include the following:
         (1)  A balance sheet as of the end of the two most recent fiscal
      years.
         (2)  Income statements of the provider for the two most recent
      fiscal years or the shorter period of time the provider has been in
      existence.
         j.  If operation of the facility has not yet commenced, a
      statement of the anticipated source and application of the funds used
      or to be used in the purchase or construction of the facility,
      including the following:
         (1)  An estimate of the cost of purchasing or constructing and
      equipping the facility, including related costs such as financing
      expense, legal expense, land costs, occupancy development costs, and
      all other similar costs the provider expects to incur or become
      obligated for prior to the commencement of operations.
         (2)  A description of any mortgage loan or other long-term
      financing intended to be used for the financing of the facility,
      including the anticipated terms and costs of the financing.
         (3)  An estimate of the total entrance fees to be received from or
      on behalf of residents at or prior to commencement of operation of
      the facility.
         (4)  An estimate of the funds, if any, anticipated to be necessary
      to fund start-up losses and provide reserve funds to assure full
      performance of the obligations of the provider under contracts for
      the provision of continuing care or senior adult congregate living
      services.
         (5)  A projection of estimated income from fees and charges other
      than entrance fees, showing individual rates presently anticipated to
      be charged and including a description of the assumptions used for
      calculating the estimated occupancy rate of the facility and the
      effect on the income of the facility of government subsidies for
      health care services, if any, to be provided pursuant to contracts
      for continuing care or senior adult congregate living services.
         (6)  A projection of estimated operating expenses of the facility,
      including a description of the assumptions used in calculating the
      expenses and separate allowances, if any, for the replacement of
      equipment and furnishings and anticipated major structural repairs or
      additions.
         (7)  Identification of any assets pledged as collateral for any
      purpose.
         (8)  An estimate of annual payments of principal and interest
      required by a mortgage loan or other long-term financing.
         k.  Other material information concerning the facility or the
      provider required by the division of insurance or which the provider
      wishes to include.
         l.  The cover page of the disclosure statement shall state, in
      a prominent location and typeface, the date of the disclosure
      statement.
         m.  A copy of the standard form or forms of contract for
      continuing care or senior adult congregate living services used by
      the provider, attached as an exhibit to each disclosure statement.
         n.  A description of transactions in which the provider
      obtains real or personal property or construction services from any
      of the following:
         (1)  The developer of the facility, or a person who is under the
      control of the developer.
         (2)  If the provider is a business entity, any person holding an
      executive position in the business entity, including but not limited
      to a member of a board of directors or an officer of a corporation, a
      manager of a limited liability company, a general partner of a
      limited partnership, or a trustee of a trust.
         (3)  If the provider is a business entity, any person who holds a
      ten percent or greater equity or beneficial interest in the business
      entity.
         (4)  Any person who directly or indirectly by acting through one
      or more intermediaries controls management decisions of the facility.

         A transaction shall include each purchase or lease of real
      property or personal property by the provider, and any construction
      services provided to the provider.  The description shall include
      transactions which have occurred or which are planned to occur.  The
      description shall also include whether the terms of the transaction
      were or will be on terms which are at least as favorable to the
      provider as those terms which would be generally available from an
      unaffiliated third party.
         2.  The provider shall prepare an annual disclosure statement
      which shall contain the information required by this chapter for the
      initial disclosure statement.  The annual disclosure statement shall
      also be accompanied by a narrative describing:
         a.  Any material differences between the pro forma cash flow
      projection prepared pursuant to this chapter as part of the most
      recent annual disclosure statement and the actual results of
      operations during the fiscal year, if the material differences
      substantially affect the financial safety or soundness of the
      community.
         b.  A revised pro forma cash flow projection for the next
      fiscal year.
         3.  The provider shall prepare the annual disclosure statement not
      later than five months following the end of the provider's fiscal
      year.  The provider shall retain a record of each annual disclosure
      statement prepared under this section for at least five years.
         4.  If an amendment is prepared pursuant to subsection 5, the
      provider shall deliver a copy of the amendment or the amended
      disclosure statement to a prospective resident and to a prospective
      resident's personal representative if one is appointed prior to the
      provider's acceptance of part or all of the entrance fee or the
      execution of the continuing care or senior congregate living services
      contract by the prospective resident.
         5.  The provider may amend its current annual disclosure statement
      at any other time if, in the opinion of the provider, an amendment is
      necessary to prevent the disclosure statement and annual disclosure
      statement from containing any material misstatement of fact or
      omission to state a material fact required to be included in the
      statement.  The amendment or amended disclosure statement shall be
      kept with the records of the provider's annual disclosure statements.
      The provider shall deliver a copy of the amendment to a resident or
      prospective resident and a personal representative of a resident or
      prospective resident in the same manner as the annual disclosure
      statement.  

         89 Acts, ch 217, § 3; 90 Acts, ch 1168, § 54; 91 Acts, ch 205, §
      12, 13; 92 Acts, ch 1078, § 10; 2004 Acts, ch 1104, §34, 35
         Referred to in § 523D.6