Starting next year, a pre-existing condition will not be allowed as a reason for denying health insurance coverage.
The law will allow state regulators to enforce the major insurance market changes contained in the federal Affordable Care Act.
The rules also set parameters for how insurance companies can set premiums.
Insurers may only consider age, family size, and place of residence in setting premium rates.
An adult may not be charged more than three times the rate of another adult.
And Californians cannot be charged more if they smoke, something the federal law allows.
The Governor says the new rules allow consumers to get "a fair shake on the open health care market."