TRENTON – Legislation sponsored by Senator Byron M. Baer which would place dental plan organizations (DPOs) under the jurisdiction of the State Department of Banking and Insurance (DOBI) in order to better regulate the industry to provide insurer accountability and financial stability, received final approval in the Assembly today.
“The bill will establish fairness in dental insurance by creating accountability from the insurer and ensuring that DPOs make good on the contracts they provide,”said Senator Baer, Chairman of the Senate Commerce Committee. “DPOs are operated very like to the HMO model, and by allowing DOBI to oversee them both, we are ensuring that DPOs are taking the proper safeguards to remain financially sound.”
The bill, S-1752, would require DPOs to maintain detailed records for seven years. The bill would also raise the premium cap from $1 million to $2 million.
“A review will only be conducted if deemed necessary, unlike HMOs that are scrutinized every three years,” said Senator Baer. “Any examination would solely be based on the financial position of the company, and so far no DPO has ever given the State a reason to worry about their financial solvency.
“There are over 668,000 people enrolled in DPOs and 2.1 million enrollees in HMOs that provide dental benefits in New Jersey,” said Senator Baer.
Senator Baer also noted that the bill would maintain the current requirements that permit financial statements to be prepared by an independent certified public accountant, and if a DPO is audited, the financial statement would be certified by the accountant that conducted the audit.
The bill now heads to the Governor’s office for enactment.