This bill amends current New Jersey law to allow dental service corporations to operate as subsidiaries of nonprofit parent companies. Previously, dental service corporations were restricted in their investment capabilities, limited to spending no more than 10 percent of their assets or 50 percent of their surplus on investments. This restriction placed them at a competitive disadvantage compared to other health insurance entities, which do not face the same limitations. The bill aims to enhance the competitive landscape for dental service corporations by enabling them to leverage the financial resources and investment flexibility of nonprofit parent companies while still adhering to the existing statutory requirements of the "Dental Service Corporation Act of 1968."

The new legal language inserted into the law clarifies that dental service corporations can become subsidiaries of nonprofit holding companies or other nonprofit parents, provided they continue to comply with the provisions of the existing act. This change is intended to foster a more competitive environment in the dental service market, allowing these corporations to better compete with larger health insurance companies that offer dental services, while ensuring that patient protections remain intact. The bill is set to take effect six months after its enactment.

Statutes affected:
Introduced: 17:48C-4