CCRC and life plan
Do our bond covenants dictate our insurance?
Frequently yes. Many CCRCs are financed with tax-exempt bonds, and the bond documents carry insurance covenants specifying coverages, limits and sometimes carrier rating requirements.
Those covenants were negotiated once, at issuance. Your insurance program renews every year, in a market that changes, handled by people who were not in the room. Drift is the normal outcome, and it surfaces during a refinancing, a rating review or a trustee audit rather than at a claim.
On top of that sit state continuing care regulations, which in many states impose reserve, disclosure and financial reporting requirements administered by an agency separate from the health licensing agency. A CCRC can therefore be answering to a health regulator, a continuing care regulator and a bond trustee at once. Build one reconciliation schedule covering all of them and refresh it at every renewal.
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More ccrc and life plan questions
What insurance exposure do refundable entrance fees create?
Residents holding refundable entrance fees are creditors as well as residents, which produces directors and officers claims the liability program will not answer.
Are volunteer trustees personally exposed?
Yes, on governance decisions about an obligation running decades forward. Many trustees were never told that is what serving involves.
How should the aggregate be structured on a single campus?
A per location endorsement does nothing on a campus, because the campus is one location. Size the aggregate against the whole campus claim frequency instead.
Does one policy cover all our levels of care?
It should, and the term that decides it is the professional services definition. A resident who transitions between levels should not transition out of coverage.
Do we need fiduciary liability separately from D&O?
Yes. Fiduciary covers ERISA duties for the benefit plans; D&O covers governance of the organization. Sharing a sublimit means one exhausts the other.
How do resident trust funds work at a CCRC?
The balances are larger than at a standalone facility, and the funds are held in a fiduciary capacity that a standard crime form does not necessarily reach.
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