(a)  All nonprofit dental service corporations shall protect the interests of subscribers by promoting company solvency and financial strength through the application of investment standards that facilitate a reasonable balance of the following objectives:

(1)  To preserve principal;

(2)  To ensure reasonable diversification as to type of investment, issuer, and credit quality; and

(3)  To allow the nonprofit medical service corporation to allocate investments in a manner consistent with principles of prudent investment management to achieve an adequate return so that obligations to subscribers are adequately met and financial strength is sufficient to cover reasonably foreseeable contingencies.

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Terms Used In Rhode Island General Laws 27-20.1-7

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Dental service: means the professional services rendered by persons duly licensed under the laws of this state to practice dentistry, and prosthetic dentures, bridges, appliances, or other structures to be used and worn as substitutes for natural teeth, prosthetic appliances, orthodontic appliances, precious metal, and ceramic restorations, necessary in connection with the services and supplied by licensed persons, and drugs, medicines, supplies, and nursing care necessary in connection with the services, or expense indemnity for the services, prosthetic dentures, bridges, appliances, or other structures to be used and worn as substitutes for natural teeth, prosthetic appliances, orthodontic appliances, precious metal, and ceramic restorations, drugs, medicines, supplies, and care, as may be specified in any nonprofit dental service plan. See Rhode Island General Laws 27-20.1-1
  • Subscribers: means those persons or groups of persons who contract with a nonprofit dental service corporation for dental service pursuant to a nonprofit dental service plan. See Rhode Island General Laws 27-20.1-1

(b)  All investments, including, but not limited to, those referred to in this chapter, shall be made and held in accordance with the objectives in subsection (a) subject to the limitations set forth in this chapter and in regulations promulgated pursuant to this chapter. Investments not conforming to this chapter and any regulations promulgated pursuant to this chapter are not considered admitted assets.

History of Section.
P.L. 1959, ch. 183, § 1; P.L. 1999, ch. 45, § 3.