"This misguided proposal would increase premiums for those who need insurance the most and eliminate important consumer protections," the regulators said in a statement during a teleconference given by Jane Cline, NAIC president and West Virginia insurance commissioner; Kim Holland, Oklahoma insurance commissioner; and Sandy Praeger, Kansas insurance commissioner.

Ms. Praeger, chairman of the NAIC's Health and Managed Care Committee, said, "We are unified against selling across state lines."

Such activity, she said, would destabilize the market and allow insurers to "cherry pick" a regulatory jurisdiction that offered the fewest restrictions

"It would also fragment the insurance market and expose consumers to increased fraud and abuse," said the organization's statement.

It added, "This concept must be rejected and the decision whether to allow, and under what conditions to allow, interstate sales of insurance should be left up to the individual states."

Regarding a U.S. rate regulation agency, NAIC took the position that the president's proposal will give regulators in those states without full rate authority the power to ensure that proposed rate increases are "truly justified and receive a thorough review before they become effective," the NAIC officials said.

During the press conference commissioners said they could work with the Health and Human Services Administration on rates because they understand that final rate approval would not be taken away from state regulators.

The comments clarifying the rate regulatory authority proposed in the president's outline Monday were provided by Commissioners Cline and Praeger.

They issued the statement clarifying the intent of the president's proposal after meeting in Washington with Kathleen Sebelius, secretary of the Department of Health and Human Services; Sen. Dianne Feinstein, D-Cal.; and Rep. Janice Schakowsky, D-Ill.

In general, the regulators said, "state insurance regulators are very pleased that the president's overall proposal emphasizes state-based reforms."

Under the specifics provided by Ms. Sebelius and others, the president's proposal includes state-designed exchanges and will provide "considerable flexibility for states to implement the federal standards in a way that best meets the needs of their populations," they said.

"We also applaud the insurance market reforms which guarantee that individuals will be able to purchase insurance even with preexisting conditions and ensure that individuals are not rated based on health status," they added.

However, the NAIC officials said, "we remain concerned about the inadequacy of the individual mandate which could lead to a dysfunctional marketplace and higher rates for consumers."

During the press conference the commissioners declared their support for the McCarran-Ferguson Act antitrust exemption for health insurers, which, in recently approved legislation by the House of Representatives, would be removed.

The states, they said, have plenty of laws on the books to prosecute any attempt at price-fixing, and eliminating data-sharing would give larger insurers an advantage over smaller firms.