Chapter 04-088

2004 -- H 7798 SUBSTITUTE A

Enacted 06/11/04

A N A C T

RELATING TO INSURANCE -- NONPROFIT DENTAL SERVICE CORPORATIONS

Introduced By: Representatives Kennedy, and Winfield

Date Introduced: February 12, 2004

It is enacted by the General Assembly as follows:

     SECTION 1. Section 27-20.1-2 of the General Laws in Chapter 27-20.1 entitled

"Nonprofit Dental Service Corporations" is hereby amended to read as follows:

27-20.1-2. Organization. -- (a) Five (5) or more dentists duly licensed to practice under

the laws of this state who are members of the Rhode Island state dental society and who first

obtain authorization to do so by the Rhode Island state dental society, as evidenced by an

affidavit of the president and secretary of the society, may associate themselves by written

articles of association for the incorporation of a nonprofit dental service corporation. The laws of

this state relative to insurance companies or to the business of insurance, and acts in amendment

thereof of or in addition thereto to them, shall not apply to any nonprofit dental service

corporation unless expressly so provided therein in those laws.

      (b) The directors of a nonprofit dental service corporation, other than a corporation

organized pursuant to chapter 19 of title 27 this title, shall consist of a majority of members of the

public not otherwise associated with the profession of dentistry and a minority of dentists duly

licensed to practice under the laws of this state.

      (c) Each nonprofit dental service corporation shall have, in addition to all other powers

granted under this chapter and the laws of the state, the power directly or through corporations in

which the nonprofit dental service corporation invests or causes to be organized and established

and subscribes for all of the capital stock of, the power:

      (1) To operate as a nonprofit hospital service corporation, subject to all the requirements

of chapter 19 of this title and all of regulatory requirements ancillary thereto to it; and

specifically the provisions of section 27-19-6; provided, however, they shall not be subject to

sections 27-19-14 and 27-19-15;

      (2) To operate as a nonprofit medical service corporation, subject to all of the

requirements of chapter 20 of this title and all of regulatory requirements ancillary thereto to it;

and specifically the provisions of section 27-20-6; and

      (3) To provide administrative, data processing, consulting, utilization review, systems

review, and related services relating to the administration of health care services and health care

insurance programs.

     (d) Any limitation on investments or holdings provided in section 27-20.1-7 and any

other provisions of the general laws shall not apply with respect to investments or holdings under

this section; provided, however, that the value of any investment shall not exceed twenty percent

(20%) of the assets of the dental service corporation., measured at the time the investment is

initially made or added to excluding appreciation or such greater percentage as may be approved

in writing by the director of the department of business regulation and the attorney general.

      (e) To the extent that the combined value of all investments in subsidiary or other

affiliated entities exceeds fifty percent (50%) of the total reserves and unassigned funds of the

dental service corporation, the amount in excess of fifty percent (50%) shall be deemed a "non

admitted asset". for the purposes of calculating the corporation's compliance with its regulatory

reserve requirements.

     SECTION 2. This act shall take effect upon passage.

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LC02326/SUB A

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