PROPOSED RULEMAKING
[31 PA. CODE CH. 151]
Continuing Care Providers
[34 Pa.B. 850] The Insurance Department (Department) proposes to amend Chapter 151 (relating to continuing care providers) to read as set forth in Annex A. The rulemaking is proposed under the authority of the Continuing-Care Provider Registration and Disclosure Act (act) (40 P. S. §§ 3201--3225).
Purpose
The purpose of this proposed rulemaking is to update and clarify Chapter 151 with respect to the requirements for annual audits of financial statements filed by continuing care providers with the Department. This proposed rulemaking is a companion to Insurance Department Fiscal Note 11-217, which is being proposed, to clarify the requirements in Chapter 147 (relating to annual audited insurers' financial report required) with respect to audits of nonprofit and for-profit continuing care providers. Chapter 151 was adopted in 1985 to implement the act. Chapter 147 was last amended in 2001 and prescribes requirements for annual audits of all types of licensed insurers and continuing care providers. Therefore, the provisions in Chapter 151 relating to annual audits are outdated and not needed in addition to the requirements in Chapter 147.
Significant Provisions
Section 151.7(d) (relating to disclosure statements) is being amended to replace out-dated, incomplete requirements for audited financial statements with a reference to the requirements in Chapter 147. This amendment, together with the amendments to Chapter 147, is needed to establish up-to-date, detailed financial reporting requirements for nonprofit and for-profit continuing care providers under generally accepted accounting principles.
External Comments
The Department requested comments from the Pennsylvania Association of Nonprofit Homes for the Aging in drafting this proposed rulemaking and the companion rulemaking to update Chapter 147. The comments received in response to the Department's request were considered in the development of this proposed rulemaking.
Affected Parties
Chapter 151 applies to continuing care providers licensed to transact business in this Commonwealth. The provisions relating to annual audits also apply to the certified public accountants retained to conduct audits of financial statements filed by continuing care providers with the Department.
Fiscal Impact
State Government
The proposed rulemaking will update and clarify existing regulatory requirements. There will be no increase in cost to the Department as a result of this proposed rulemaking.
General Public
The proposed rulemaking has no fiscal impact on the general public.
Political Subdivisions
There will be no fiscal impact on political subdivisions as a result of the proposed rulemaking.
Private Sector
The updates in this proposed rulemaking will impose no significant costs on continuing care providers.
Paperwork
The proposed rulemaking will not impose additional paperwork on the Department and affected parties.
Effectiveness/Sunset Date
The proposed rulemaking will become effective upon final-form publication in the Pennsylvania Bulletin. The Department continues to monitor the effectiveness of regulations on a triennial basis; therefore no sunset date has been assigned.
Contact Person
Questions or comments regarding the proposed rulemaking should be addressed in writing to Peter J. Salvatore, Regulatory Coordinator, Insurance Department, 1326 Strawberry Square, Harrisburg, PA 17120, fax (717) 772-1969, psalvatore@state.pa.us within 30 days following the publication of this proposed rulemaking in the Pennsylvania Bulletin.
Under the Regulatory Review Act (71 P. S. §§ 745.1--745.15), the Department is required to write to all commentators requesting whether or not they wish to receive a copy of the final-form rulemaking. To better serve stakeholders, the Department has made a determination that all commentators will receive a copy of the final-form rulemaking when it is made available to the Independent Regulatory Review Commission (IRRC) and the legislative standing committees.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on February 2, 2004, the Department submitted a copy of this proposed rulemaking and a copy of a Regulatory Analysis Form to IRRC and to the Chairpersons of the Senate Banking and Insurance Committee and the House Insurance Committee. A copy of this material is available to the public upon request.
Under section 5(g) of the Regulatory Review Act, IRRC may convey any comments, recommendations or objections to the proposed rulemaking within 30 days of the close of the public comment period. The comments, recommendations or objections shall specify the regulatory review criteria which have not been met. The Regulatory Review Act specifies detailed procedures for review, prior to final publication of the rulemaking, by the Department, the General Assembly and the Governor of comments, recommendations or objections raised.
M. DIANE KOKEN,
Insurance CommissionerFiscal Note: 11-220. No fiscal impact; (8) recommends adoption.
(Editor's Note: See 34 Pa.B. 846 for a proposal related to this proposal.)
Annex A
TITLE 31. INSURANCE
PART VIII. MISCELLANEOUS PROVISIONS
CHAPTER 151. CONTINUING CARE PROVIDERS § 151.7. Disclosure statements.
* * * * * (d) The certified financial statements required to be contained in disclosure statements, under section 7(a)(9) of the act (40 P. S. § 3207(a)(9)), shall be prepared in accordance with [generally accepted accounting principles and shall be signed by an independent certified public accountant in accordance with generally accepted auditing standards. The certified financial statements shall include the following as of the end of the providers two most-recent fiscal-years, or the period of time that the provider has been in existence, whichever is shorter.
(1) A balance sheet showing the assets, liabilities and equity.
(2) Statements of income, retained earnings or equity and changes in financial position.] Chapter 147 (relating to annual audited insurers' financial report required).
* * * * *
[Pa.B. Doc. No. 04-237. Filed for public inspection February 13, 2004, 9:00 a.m.]
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