California Code, Insurance Code - INS § 10747

The board may adjust payments made to a carrier if the board finds that the carrier has a significantly disproportionate share of high- or low-risk enrollees.  Prior to making this finding, the program shall obtain valid data from participating carriers.  Reporting requirements shall be administratively compatible with the methods of operation of the carrier.  Any adjustments to payments shall be prospective and shall utilize demographic and other factors which are actuarially related to risk.