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  • NJ S2
  • Clarifies role of health service corporations, revises membership of board of directors, regulates surplus, and requires timely publication of certain information by DOBI.
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2016-2017 Regular Session
This bill makes various revisions to the regulation of health service corporations. The bill clarifies the role of health service corporations, revises the membership of the board of directors of health service corporations, regulates surplus, and directs the reduction of surplus that is in excess of an established range. Specifically, the bill provides that a health service corporation shall have a mission to: (1) provide affordable and accessible health insurance to its subscribers; and (2) promote the integration of the health care system to meet the needs of its subscribers. Additionally, a health service corporation is directed to develop goals, objectives, and strategies for carrying out, in accordance with this bill, its statutory mission. The bill requires a health service corporation to, on an annual basis, and in a form and manner prescribed by the Department of Banking and Insurance, file with the department information relating to the health service corporation's operations, including but not limited to the following: the health service corporation's mission, activities, revenues, expenses, assets, liabilities, and total compensation provided to officers, directors, trustees and the five other highest compensated employees who are not an officer, director or trustee, which information shall be posted on the department's website. The bill directs, on or before June 30, 2019, and annually thereafter, the commissioner to report to the Governor, and to the Legislature on the compliance of a health service corporation with the provisions of the bill. With regard to the board of directors of a health service corporation, the bill adds one public member to be appointed by the Senate President and one public member to be appointed by the Speaker of the General Assembly, each of whom shall have experience in either finance, insurance, or health care delivery. The bill also regulates the surplus of a health service corporation. Specifically, the bill directs the commissioner to, on an annual basis, examine a health service corporation's annual regulatory filings to determine whether the health service corporation's surplus is within 550% to 725% of risk based-capital. If at any time the commissioner determines that a health service corporation surplus exceeds this range, the department is to notify the health service corporation and the health service corporation shall, within 30 days of notice from the commissioner, file a report with the commissioner to reduce the surplus to be within the range. The report shall include a plan to benefit subscribers, which may include but not be limited to proposals to lessen potential rate increases in the future. The commissioner shall review the plan to affirm that it meets the requirements of the bill. The department is also directed to annually audit the financial statements and surplus of the health service corporation to verify risk-based capital. In order to implement the provisions of this provision of the bill, the department may engage and retain independent actuaries, as necessary, at the expense of the health service corporation. Finally, the bill also supplements the "Health Care Quality Act" to require the Department of Banking and Insurance to publish on its website the annual financial statement of each carrier, in the format adopted by the National Association of Insurance Commissioners (NAIC) and in use at the time the statement is due, within 30 days of the receipt of that statement. The bill takes effect immediately, except the provisions regulating the health service corporation surplus take effect for the next annual regulatory filings with the Department of Banking and Insurance after January 1, 2018.
Bills and Joint Resolutions Signed by the Governor, Passed both Houses
Approved P.L.2017, c.100.  (on 7/4/2017)
Date Chamber Action Description
7/4/2017 A Approved P.L.2017, c.100.
7/4/2017 S Passed by the Senate (33-1)
7/4/2017 S Emergency Resolution (32-0) (Vitale)
7/4/2017 S Introduced, 1st Reading without Reference, 2nd Reading
6/29/2017 A Passed Assembly (Passed Both Houses) (71-2-0)
6/29/2017 A Emergency Resolution (70-2-0) (Muoio)
6/29/2017 A Substituted for A5129
6/29/2017 A Motion Add to Calendar (Muoio) (70-2-0)
6/29/2017 A Received in the Assembly without Reference, 2nd Reading
Date Motion Yea Nay Other
Detail 7/4/2017 Assembly Floor: Third Reading - Final Passage 71 2 7
Detail 7/4/2017 Assembly Floor: Substitute For A5129 (Voice Vote) 0 0 0
Detail 7/4/2017 Assembly Floor: Add to Calendar 70 2 8
Detail 7/4/2017 Senate Floor: Third Reading - Final Passage 33 1 6
Detail 7/4/2017 Senate Floor: Enact Emergency Clause 32 0 8
Detail 7/4/2017 Assembly Floor: Enact Emergency Clause 70 2 8