2023 New Jersey Revised Statutes › Title 17 - Corporations and Institutions for Finance and Insurance › Section 17:48E-46.3 - Mutual holding company, not for pecuniary profit, mission

17:48E-46.3. Mutual holding company, not for pecuniary profit, mission
3. a. A mutual holding company organized pursuant to P.L.2020, c.145 (C.17:48E-46.1 et al.) shall not be established as a company organized for pecuniary profit and shall retain the designation as a charitable and benevolent institution pursuant to section 41 of P.L.1985, c.236 (C.17:48E-41). A mutual holding company established pursuant to the provisions of P.L.2020, c.145 (C.17:48E-46.1 et al.) shall retain the health service corporation's mission while supplementing that mission to promote innovation and delivery of diversified services.
The mission of a mutual holding company shall be to:
(1) provide affordable and accessible health insurance to its members;
(2) promote the integration of the health care system to meet the needs of its members; and
(3) promote innovation and delivery of solutions and diversified services for its members.
b. Other than as provided pursuant to P.L.2020, c.145 (C.17:48E-46.1 et al.), all property, assets, rights, liabilities, interest and relations of whatever kind of the health service corporation, and its subsidiaries, shall be that of the mutual holding company system. The mutual holding company shall not be considered a health service corporation. Notwithstanding anything to the contrary, the provisions of section 41 of P.L.1985, c.236 (C.17:48E-41) shall continue to apply to a mutual holding company if the mutual holding company continues to participate in the New Jersey Individual Health Coverage Program pursuant to P.L.1992, c.161 (C.17B-27A-2 et seq.) and the New Jersey Small Employer Health Benefits Program pursuant to P.L.1992, c.162 (C.17B:27A-17 et seq.). If the mutual holding company does not participate in the New Jersey Individual Health Coverage Program pursuant to P.L.1992, c.161 (C.17B-27A-2 et seq.) and the New Jersey Small Employer Health Benefits Program pursuant to P.L.1992, c.162 (C.17B:27A-17 et seq.) the provisions of section 41 of P.L.1985, c.236 (C.17:48E-41) shall no longer apply.
c. The health insurance duties and obligations pursuant to P.L.1985, c.236 (C.17:48E-1 et seq.) shall continue and remain in the succeeding reorganized insurer reorganizing pursuant to P.L.2020, c.145 (C.17:48E-46.1 et al.), in each case, except as provided pursuant to P.L.2020, c.145 (C.17:48E-46.1 et al.). Except as listed below in subsection e. of this section, all references to a "health service corporation" in P.L.1985, c.236 (C.17:48E-1 et seq.), shall refer to a "reorganized insurer" established pursuant to P.L.2020, c.145 (C.17:48E-46.1 et al.) and shall not refer to the mutual holding company.
d. In addition to the mutual holding company's qualification pursuant to section 2 of P.L.2020, c.145 (C.17:48E-46.2), and for avoidance of doubt, the mutual holding company shall be expressly excluded from insurance operations and reporting, investment limits, and risk-bearing provisions of P.L.1985, c.236 (C.17:48E-1 et seq.), including the following provisions because a mutual holding company is not a risk-bearer:
(1) Subsection e. of section 1, subsection b. of section 2, subsection a. of section 3, sections 6 through 9, and section 11 of P.L.1985, c.236 (C.17:48E-1, C.17:48E-2, C.17:48E-3, C.17:48E-6 through C.17:48E-9, and C.17:48E-11);
(2) Section 16 and subsections a. through c. of section 17 of P.L.1985, c.236 (C.17:48E-16 and C.17:48E-17), section 5 of P.L.1988, c.71 (C.17:48E-17.1), and section 8 of P.L.1993, c.235 (C.17:48E-17.2);
(3) Section 4 of P.L.2017, c.100 (C.17:48E-17.3);
(4) Sections 36 and 37 of P.L.1985, c.236 (C.17:48E-36 and C.17:48E-37); and
(5) Sections 31 through 35 of P.L.2014, c.81 (C.17:48E-37.1 through C.17:48E-37.5).
e. The reorganized insurer shall engage in risk-bearing activities, reporting, investments, financial transactions, including the issuance of dividends or distributions, and insurance trade practices consistent with laws governing stock insurance companies organized under Title 17B of the New Jersey Statutes to transact health insurance as defined in N.J.S.17B:17-4. Notwithstanding the provisions of subsection c. of this section, the following sections of P.L.1985, c.236 (C.17:48E-1 et seq.) shall not apply to the reorganized insurer or any insurance company or risk-bearing entity within the mutual holding company system:
(1) Section 4 of P.L.2017, c.100 (C.17:48E-17.3);
(2) Sections 31 through 35 of P.L.2014, c.81 (C.17:48E-37.1 through C.17:48E-37.5), but subject to the solvency rules set forth pursuant to N.J.S.17B:18-70 et seq.; and
(3) Subsection e. of section 1, subsection b. of section 2, subsection a. of section 3, sections 6 through 9, and section 11 of P.L.1985, c.236 (C.17:48E-1, C.17:48E-2, C.17:48E-3, C.17:48E-6 through C.17:48E-9, and C.17:48E-11).
f. The insurance premium rate tax cap law provided by subsection a. of section 6 of P.L.1945, c.132 (C.54:18A-6) shall apply to the companies within the mutual holding company system that have an insurance premium tax liability, and the exclusion from the tax cap applicable to a health service corporation pursuant to subsection b. of section 6 of P.L.1945, c.132 (C.54:18A-6) shall not apply to the mutual holding company or any entity within the mutual holding company system, including the reorganized insurer, that has an insurance premium tax liability.
g. A mutual holding company system may pursue businesses, assets, or operations through one or more of its insurance subsidiaries and non-insurance subsidiaries without a limit on aggregate revenues from nonconforming affiliates or such pursuits being considered a material change in form as such term is defined pursuant to section 1 of P.L.2001, c.131 (C:17:48E-49). The subsidiaries of the mutual holding company, including the reorganized insurer, shall be permitted to make dividends or distributions to the mutual holding company, any subsidiaries thereof, or both, and shall not be considered a material change in form as such term is defined pursuant to section 1 of P.L.2001, c.131 (C.17:48E-49). Dividends and distributions from domestic insurers, including the reorganized insurer, within the mutual holding company system shall be subject only to the applicable provisions of subsection c. of section 4 of P.L.1970, c.22 (C.17:27A-4).
h. The continuation of the rights, duties and obligations of a health service corporation pursuant to this section following completion of an approved reorganization pursuant to P.L.2020, c.145 (C.17:48E-46.1 et al.) shall be limited to such rights, duties and obligations pursuant to P.L.1985, c.236 (C.17:48E-1 et seq.) as of the effective date of P.L.2020, c.145 (C.17:48E-46.1 et al.); amendments to P.L.1985, c.236 (C.17:48E-1 et seq.) enacted after the effective date of P.L.2020, c.145 (C.17:48E-46.1 et al.) shall not apply. Notwithstanding the above, the reorganized insurer shall be subject to the laws applicable to domestic health insurance companies contained in Title 17B of the New Jersey Statutes and P.L.1970, c.22 (C.17:27A-1 et seq.).
L.2020, c.145, s.3.