U.S. health insurance companies that want to increase premiums by 10 percent or more next year would face tougher government scrutiny under new rules proposed on Tuesday.
The rules, called for under the sweeping healthcare law passed in March, would require insurers with price increases of 10 percent or more in 2011 to submit data justifying the higher rates for states or, in some cases, the federal government to assess.
While regulators cannot set health insurance rates, they can determine whether proposed increases are "unreasonable."
The rules put further pressure on health insurers such as Aetna Inc, UnitedHealth Group Inc and WellPoint Inc, which suffered bad press and drew closer scrutiny by the U.S. Congress and regulators this year when prices for some individual plans in certain areas rose more than 30 percent.
Tuesday's proposal offers Wall Street and insurers more details on the rules, which analysts said were better than expected and lifted some uncertainty hanging over the industry.
Shares of insurers, represented by the S&P Managed Health Care Index, rose 1.5 percent after the proposal was announced, but later pared their gains and were up 0.5 percent, in line with the overall market.
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