Federal officials say Kentucky must adhere to new rules for insurance companies by 2012.
The federal Department of Health and Human Services sent a letter to the state on Friday saying it had denied a request to delay implementing the rules until 2014.
Instead it gave the state until next year to abide by the standards that are part of the federal health care overhaul bill, according to the Lexington Herald-Leader.
The provision requires that insurance companies spend 80 percent of premiums on paying customers' claims.
The state Department of Insurance had asked that it be allowed to gradually increase the medical loss ratio, saying it was concerned insurance companies would move out of Kentucky.
But the letter says federal officials think companies would be able to meet the requirement by next year without substantial losses.