Care home owners will be forced to prove they are financially stable to avoid a second Southern Cross-style collapse, officials have said.
The Government is to implement a series of safeguards to prevent a repeat of the crisis.
Care and Support Minister Norman Lamb announced that the Care Quality Commission (CQC) will be able to monitor the financial health of the largest providers.
The abrupt collapse of Southern Cross, Britain's biggest care homes operator, caused turmoil for more than 30,000 elderly and vulnerable people in 2011.
More top news
Search for missing seven-year-old underway after he was reportedly abandoned in a forest by his parents as "punishment" for throwing rocks.
Shooting of a 400-pound gorilla who grabbed a four-year-old boy after he entered his enclosure sparks public outrage and prompts petition.
The 'sugar tax' outlined in Chancellor George Osborne's March budget will "hit the poor the hardest", critics claim.