Sec. 350.11. Transactions between a continuing care retirement community and its parent corporation, affiliates and subsidiaries

(a) In any transactions between a continuing care retirement community and its parent corporation or any affiliate or subsidiary:

(1) the terms of the financial transactions shall be fair and equitable to the continuing care retirement community at the time of the transaction;

(2) charges or fees for services performed shall be reasonable; and

(3) expenses incurred and payments received shall be allocated to the continuing care retirement community on an equitable basis in conformity with customary accounting practices consistently applied.

(b) The books, accounts and records of each person to all such transactions shall be so maintained as to clearly and accurately disclose the nature and details of the transactions including accounting information as is necessary to support the reasonableness of the charges or fees to the respective persons.

(c) Services to be provided to or by a continuing care retirement community by or to its parent corporation, or any affiliate or subsidiary shall be set forth in a services agreement signed by the contracting persons.

(d) The records, reports and accounts of each continuing care retirement community shall be maintained separately from those of its parent corporation, affiliates and subsidiaries.

(e) A continuing care retirement community shall not guarantee the obligations of its parent corporation or any affiliate or subsidiary.

(f)

(1) A continuing care retirement community shall not enter into any of the following transactions with its parent corporation or any affiliate or subsidiary unless it has obtained the superintendent’s prior approval of the transaction: sales, purchases, exchanges, loans or extensions of credit, or investments, involving five percent or more of the continuing care retirement community’s total assets, in excess of capital assets, as defined herein, at last year-end.

(2) A continuing care retirement community shall not enter into any of the following transactions with its parent corporation or any affiliate or subsidiary unless the continuing care retirement community has notified the superintendent in writing of its intention to enter into any such transaction at least 30 days prior to entering into the transaction and the superintendent has not disapproved it within that period:

(i) sales, purchases, exchanges, loans or extensions of credit, or investments involving less than five percent of the continuing care retirement community’s total assets, in excess of capital assets, as defined herein, at last year-end;

(ii) rendering of services on a regular or systematic basis;

(iii) any management agreements, tax allocation agreements, service contracts, or cost sharing arrangements; or

(iv) any lease of real or personal property that does not provide for the rendering of services on a regular and systematic basis.

(3) Nothing in this subdivision shall be deemed to authorize or permit any transaction that would be otherwise contrary to law.

(4) The superintendent, in reviewing any transaction described in paragraph (1) or (2) of this subdivision will consider whether the transaction complies with the standards set forth in subdivisions (a) through (d) of this section and whether it may adversely affect the interests of residents of that continuing care retirement community.

(5) Any series of transactions designed to evade the provisions of this subdivision shall be subject to the filing requirements described in paragraph (1) or (2) of this subdivision.