17:48E-17. Expense limits; investments; administrative services

17. a. No health service corporation shall during any one year disburse more than 10% of the aggregate amount of the payments received from subscribers during that year as expenditures for the soliciting of subscribers, except that during the first year after the issuance of a certificate of authority a health service corporation may so disburse not more than 20% of that amount and during the second year, not more than 15%.

b. No health service corporation shall, during any one year, disburse a sum greater than 20% of the payments received from subscribers during that year as administrative expenses. The term "administrative expenses," as used in this section, shall include all expenditures for nonprofessional services and in general all expenses not directly connected with the furnishing of services or benefits, but not including expenses of soliciting subscribers.

c. The funds of any health service corporation may be invested to the same extent now or hereafter permitted by law for the investment of funds of domestic life insurance companies, including investments as provided in subsection e. of section 3 of P.L.1985, c.236 (C.17:48E-3) in life, health or accident insurance companies or other for-profit subsidiaries such as insurance agencies, suppliers of administrative services only, or any other subsidiaries permitted pursuant to N.J.S.17B:20-4, and for the purpose of engaging in any aspect of its business directly or through one or more subsidiaries or affiliates, including life, health or accident insurance companies.

In calculating the amount of such investments pursuant to N.J.S. 17B:20-4, investments in health maintenance organizations shall be excluded.

d. A health service corporation may supply administrative services only, and may supply administrative services either directly or through a subsidiary or affiliate.

e. (Deleted by amendment, P.L.1988, c.71.)

f. (Deleted by amendment, P.L.1988, c.71.)

L.1985,c.236,s.17; amended 1988, c.71, s.3; 1992, c.21; 1998, c.132.