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Senate Commerce Committee Statement to Senate, No. 1138 (December 12, 2024)

Summary

Senate Commerce Committee statement to Senate, No. 1138, State of New Jersey, dated December 12, 2024. The committee reports favorably Senate Bill No. 1138, which amends current law to permit dental service corporations to be or become subsidiaries of nonprofit parents. The statement says dental service corporations have more predictable risks of loss than other health insurance companies and that the subsidiary would still have to comply with the “Dental Service Corporation Act of 1968,” including the limitation on investing company funds. It says the bill was pre-filed for introduction in the 2024-2025 session pending technical review and that, as reported, it includes the changes required by technical review.

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“Senate Commerce Committee Statement to Senate, No. 1138 (December 12, 2024).” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2024-12-12-scm-s1138-s1-f96b90508b/, SHA-256 a4d270a924bddfe9f8e3724d9ae5bb118dfb1bd9dd4c4e007647764859bada1d.

Full text

     SENATE COMMERCE COMMITTEE

                   STATEMENT TO

                 SENATE, No. 1138

 STATE OF NEW JERSEY
                  DATED: DECEMBER 12, 2024

    The Senate Commerce Committee reports favorably Senate Bill
No. 1138.
   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.
    This bill was pre-filed for introduction in the 2024-2025 session
pending technical review. As reported, the bill includes the changes
required by technical review, which has been performed.

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