New Jersey Sets Financial Reserve Caps For Non-Profit Health Insurers

On July 3, 2017, New Jersey Governor Chris Christie signed legislation to impose a cap on financial reserves held by non-profit health insurers. The legislation, Senate Bill 2, (SB2) sets the maximum risk-based capital (RBC) ratio for a health care service corporation at 725% of revenue. Health plans with risk-based contracts are required to maintain reserves of at least 550% to offset future expenses due to claims or market changes. Under SB2, if a health care service corporation exceeds the 725% RBC reserve cap, the corporation is required to develop a plan for using the excess capital . . .