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Senate Commerce Committee Statement to Assembly, No. 3667 (December 12, 2024)

Summary

Senate Commerce Committee statement to Assembly, No. 3667, State of New Jersey, dated December 12, 2024. The committee reports favorably Assembly Bill No. 3667, which amends current law to permit dental service corporations to be or become subsidiaries of nonprofit parents. The statement says the bill would give a nonprofit parent freedom to invest funds and be better able to help its dental service corporation subsidiary compete with larger health insurance companies that offer dental services. It says the subsidiary would still have to comply with the “Dental Service Corporation Act of 1968,” including the limitation on investing company funds.

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“Senate Commerce Committee Statement to Assembly, No. 3667 (December 12, 2024).” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2024-12-12-scm-a3667-s3-5c758a6a56/, SHA-256 d3c228846e169b8aa0d76d25162f94bdc97ae83ea003650051ae4184b9f20464.

Full text

     SENATE COMMERCE COMMITTEE

                    STATEMENT TO

               ASSEMBLY, No. 3667

 STATE OF NEW JERSEY
                   DATED: DECEMBER 12, 2024

     The Senate Commerce Committee reports favorably Assembly Bill
No. 3667.
     This bill amends the current law to permit dental service
corporations to be or become subsidiaries of nonprofit parents. Under
the current law, a dental service corporation is prohibited from
spending more than 10 percent of its assets or more than 50 percent of
its surplus, whichever is less, on investments. This puts dental service
corporations at a disadvantage compared to other health insurance
companies, despite the fact that dental service corporations have more
predictable risks of loss and thus have less need for limiting the use of
company funds.
     Allowing dental service corporations to be or become subsidiaries
of nonprofit parent companies, while still imposing all statutory
requirements on the dental service corporations themselves, would
give a nonprofit parent freedom to invest funds and be better able to
help its dental service corporation subsidiary compete with larger
health insurance companies that offer dental services. At the same
time, the dental service corporation subsidiary would still have to
comply with the "Dental Service Corporation Act of 1968," including
the limitation on investing company funds. By amending the current
law, this bill promotes competition in the dental service market and
ensures that patients are still adequately protected.

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