(a) Any provider offering a refundable contract, or other entity assuming responsibility for refundable contracts, shall maintain a refund reserve in trust for the residents. The amount of the refund reserve shall be revised annually by the provider and the provider shall submit its calculation of the refund reserve amount to the department in conjunction with the annual report required by Section 1790. This reserve shall accumulate interest and earnings and shall be invested in any of the following:

1. (1) Qualifying assets as defined in Section 1792.2.

2. (2) Real estate, subject to all of the following conditions:

   1. (A) To the extent approved by the department, the trust account may invest up to 70 percent of the refund reserves in real estate that is both used to provide care and housing for the holders of the refundable continuing care contracts and is located on the same campus where these continuing care contractholders reside.
   2. (B) Investments in real estate shall be limited to 50 percent of the providers’ net equity in the real estate. The net equity shall be the book value, assessed value, or current appraised value within 12 months prior to the end of the fiscal year, less any depreciation, and encumbrances, all according to audited financial statements acceptable to the department.

(c) The amount to be held in the reserve shall be the total of the amounts calculated with respect to each individual resident holding a refundable contract as follows:

1. (1) Determine the age in years and the portion of the entry fee for the resident refundable for the seventh year of residency and thereafter.

2. (2) Determine life expectancy of that individual based on all of the following rules:

   1. (A) The following life expectancy table shall be used in connection with all continuing care contracts:

      Age	Females	Males		Age	Females	Males
      55	26.323	23.635		83	7.952	6.269
      56	25.526	22.863		84	7.438	5.854
      57	24.740	22.101		85	6.956	5.475
      58	23.964	21.350		86	6.494	5.124
      59	23.199	20.609		87	6.054	4.806
      60	22.446	19.880		88	5.613	4.513
      61	21.703	19.163		89	5.200	4.236
      62	20.972	18.457		90	4.838	3.957
      63	20.253	17.764		91	4.501	3.670
      64	19.545	17.083		92	4.175	3.388
      65	18.849	16.414		93	3.862	3.129
      66	18.165	15.759		94	3.579	2.903
      67	17.493	15.116		95	3.329	2.705
      68	16.832	14.486		96	3.109	2.533
      69	16.182	13.869		97	2.914	2.384
      70	15.553	13.268		98	2.741	2.254
      71	14.965	12.676		99	2.584	2.137
      72	14.367	12.073		100	2.433	2.026
      73	13.761	11.445		101	2.289	1.919
      74	13.189	10.830		102	2.152	1.818
      75	12.607	10.243		103	2.022	1.723
      76	12.011	9.673		104	1.899	1.637
      77	11.394	9.139		105	1.784	1.563
      78	10.779	8.641		106	1.679	1.510
      79	10.184	8.159		107	1.588	1.500
      80	9.620	7.672		108	1.522	1.500
      81	9.060	7.188		109	1.500	1.500
      82	8.501	6.719		110	1.500	1.500

   2. (B) If there is a couple, the life expectancy for the person with the longer life expectancy shall be used.
   3. (C) The life expectancy table set forth in this paragraph shall be used until expressly provided to the contrary through the amendment of this section.
   4. (D) For residents over 110 years of age, 1.500 years shall be used in computing life expectancy.
   5. (E) If a continuing care retirement community has contracted with a resident under 55 years of age, the continuing care retirement community shall provide the department with the methodology used to determine that resident’s life expectancy.
3. (3) For that resident, use an interest rate of 6 percent or lower to determine from compound interest tables the factor that, when multiplied by one dollar ($1), represents the amount, at the time the computation is made, that will grow at the assumed compound interest rate to one dollar ($1) at the end of the period of the life expectancy of the resident.
4. (4) Multiply the refundable portion of the resident’s entry fee amount by the factor obtained in paragraph (3) to determine the amount of reserve required to be maintained.
5. (5) The sum of these amounts with respect to each resident shall constitute the reserve for refundable contracts.
6. (6) The reserve for refundable contracts shall be revised annually as provided for in subdivision (a), using the interest rate, refund obligation amount, and individual life expectancies current at that time.