On February 9, 2012, California Insurance Commissioner Dave Jones announced that the Office of Administrative Law approved his request to make permanent the emergency regulation issued last year requiring health insurers to allocate a larger share of insurance premiums to actual medical care, rather than overhead costs and profits. The regulation requires that health insurers put at least 80% of premiums collected from individual policyholders into medical care. The regulation implements the medical loss ratio (MLR) requirement of the federal Patient Protection and Affordable Care Act of 2009 (PPACA).

Under the California regulation, an insurer’s submission will be evaluated for compliance with the 80% standard at the time a rate is filed with the Department of Insurance, rather than performing the calculation at the end of the year as PPACA provides.