This bill amends the existing law governing dental service corporations in New Jersey to allow these entities to operate as 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 proposed changes aim to enhance the financial flexibility of dental service corporations by permitting them to be part of a nonprofit holding company, thereby enabling better investment opportunities while still adhering to the statutory requirements of the "Dental Service Corporation Act of 1968."

The bill includes a specific insertion stating that nothing in the existing law shall prevent a dental service corporation from becoming a subsidiary of a nonprofit holding company or other nonprofit parent that is not a dental service corporation, provided that the subsidiary remains subject to the provisions of the existing law. This change is intended to foster competition in the dental service market, allowing dental service corporations to better compete with larger health insurance companies while ensuring that patient protections remain intact. The act is set to take effect six months after its enactment.

Statutes affected:
Introduced: 17:48C-4