Question 2 looks to put a limit on the % profit they are allowed to make, not the actual number. If a dental company is over the limit, do you really think they are going to give the money back? Probably not.

I work in fraud, waste, an abuse (albeit more on the medical side than dental) and a fairly common thing we see is companies with medical loss ratio limits is allowing A LOT more FWA to occur in their plans, then increase spending on recoveries/tracking (which falls under the umbrella of "efforts to improve the quality of care" even though in reality they are allowing behavior they didnt allow before) which puts them under the MLR limit. And oh by the way, they also get to keep the money they recover which doesnt affect the MLR.
So basically, it incentives payers to allow more fraud, waste, and abuse to happen in their plans, which increases costs for the average member, and then they double dip by profiting from the recoveries