WASHINGTON — State insurance officials say they fear that health insurance companies will cancel policies and leave the individual insurance market in some states because of a provision of the new health care law that requires insurers to spend more of each premium dollar for the benefit of consumers.

The National Association of Insurance Commissioners, representing state officials, says the federal government should take steps to prevent disruption of the market.

Specifically, the group is drafting a recommendation that urges the federal government to allow a gradual three-year transition in states where the new requirement, which takes effect Jan. 1, could destabilize the market.

Without a transition, insurers “may cancel individual policies, if the terms of the policies permit cancellation, and cease offering these plans,” says a document prepared by the association. “This potential withdrawal could have a severe impact on the currently insured, who would lose their policies, and could also limit the choices available to prospective purchasers.”

The law will require many insurers to spend a larger share of their premium revenue — at least 80 percent — on medical care (and quality-improvement activities), rather than administration, expenses and profits. Insurers must refund money to consumers if they do not meet the standards, known as medical-loss ratios.

Democrats in Congress championed the minimum-loss ratio as a powerful protection for consumers — a way to guarantee that policyholders “receive value for their premium payments,” in the words of the law.

In its draft policy statement, the association says federal officials should lower the threshold “on a state-by-state basis” if immediate enforcement of the 80 percent requirement would destabilize the individual insurance market.

The association does not name states that might need a dispensation. Presumably, they include less-populous states with relatively few insurers. But California officials said they, too, were extremely worried.

Under the law, the association has a special role advising the secretary of health and human services, Kathleen Sebelius, on how to define and calculate medical-loss ratios. Ms. Sebelius served as president of the association in 2001, when she was insurance commissioner of Kansas and an outspoken advocate for consumers.

State officials said they expected to submit their recommendations to Ms. Sebelius next month. If an insurer decides to exit the individual market in a state, it must give 180 days’ notice to policyholders.

In effect, state officials are urging the Obama administration to exercise discretion it was granted by Congress. The new law says the health secretary can adjust the medical-loss ratio in a state if she finds that enforcement of the full 80 percent requirement would “destabilize the individual market” there.

Without a transition period, the association said, some insurers “may cancel their blocks of individual health insurance policies, resulting in possibly several million enrollees who have to shop and apply for coverage elsewhere.”

Moreover, it said, in states where underwriters are still allowed to consider a person’s health status, “many enrollees may not be accepted due to medical conditions, or would have to pay higher premiums.”

Under the law, insurers will have to accept all applicants and cannot charge higher premiums because of a person’s medical condition, but in general these provisions do not take effect until 2014.

Consumer advocates said that any exceptions from the new requirement should be limited.

“The National Association of Insurance Commissioners finds itself in a difficult position, facing essentially a threat from the industry,” said Prof. Timothy S. Jost, an expert on health law at Washington and Lee University.

“A mass exit of insurers from the individual market would, of course, not be in the interest of consumers,” said Mr. Jost, one of several consumer representatives advising the association. “On the other hand, the 80 percent loss ratio should be attainable by a well-run insurer.”

Millions of people get insurance from companies that do not meet the target. Using annual statements filed by insurers, the association has compiled a database of more than eight million people who have individual coverage from more than 400 insurers. Nearly half of these policyholders had coverage from about 70 insurers whose loss ratios were less than 75 percent in 2009.

Julia T. Philips, a health actuary who works for the Minnesota insurance commissioner, gave this example of how the recommendation might work in a state with four insurers, where state law now sets a minimum loss ratio of 55 percent and actual ratios are 55 percent to 70 percent.

The minimum, Ms. Philips said, could be increased gradually, so insurers would have to spend 65 percent of premiums on medical services next year, 70 percent in 2012 and 75 percent in 2013, then 80 percent in 2014.