(January 10, 2011) Newly inaugurated Insurance Commissioner Dave Jones signed a Notice of Emergency Regulation on January 3 requiring insurance companies to devote 80 percent of revenue to policyholders’ claims in California’s individual insurance market.

Current California law requires insurers to spend at least 70 percent of revenue on medical care.

The 80 percent requirement is included in the national health care law, which some members of Congress are seeking to repeal.

The emergency rule must be approved by the state Office of Administrative Law (OAL), which will review factors such as the insurance commissioner’s authority to act. If OAL approves the emergency rule, it will go into effect this month, giving the Insurance Department six months to write permanent rules.

In remarks following his swearing-in, Jones said his three main priorities are:

• implementation of federal health care reform, including continuing to seek authority to “reject excessive health insurance premium increases”;
• to “level the playing field” for consumers and businesses as they deal with insurance companies; and
• ensuring California has “a viable and competitive insurance market, where carriers are solvent, where new products like ‘Green Property Insurance’ can be brought to market to provide more choices and where consumers are treated fairly.”

Staff Contact: Marti Fisher