This bill amends the existing law regarding dental service corporations in New Jersey, specifically allowing these corporations to be subsidiaries of nonprofit parent companies. The current law restricts dental service corporations from spending more than 10 percent of their assets or 50 percent of their surplus on investments, which has placed them at a competitive disadvantage compared to other health insurance providers. The amendment aims to provide dental service corporations with greater flexibility in managing their funds while still adhering to the statutory requirements of the "Dental Service Corporation Act of 1968."

The new legal language inserted into the law clarifies that dental service corporations can operate as subsidiaries of nonprofit holding companies or other nonprofit parents, provided they continue to comply with the existing provisions of the act. This change is intended to enhance competition in the dental service market by allowing these corporations to leverage the financial capabilities of their nonprofit parents, thereby improving their ability to compete with larger health insurance companies that offer dental services. The bill is set to take effect six months after its enactment.

Statutes affected:
Introduced: 17:48C-4