The Texas Department of Insurance is asking the federal government for more time for health insurers in the state to meet the new medical loss ratio (MLR) requirements.

As it stands, companies that don’t spend at least 80% of premium dollars this year on direct care and quality of care improvements will have to issue refunds to premium payers beginning in 2012.

However, Texas carriers subject to the rule averaged 70.8% MLR last year, and if the rule had been in effect, would have to pay back a collective $158.1 million. TDI argues that forcing carriers to immediately meet the 80% standard would result in market disruption and slashed agent commissions.

TDI is proposing a graduated implementation instead, starting at 71% this year and increasing by 3 percent each year until the 80% standard is met in 2014.