NEW YORK (TheStreet) --The insurance regulator for the State of California is not in favor of the $48.4 billion merger between health insurance companies Anthem (ANTM - Get Report) and Cigna (CI), which was announced last summer.

California insurance regulator Dave Jones does not have the authority to approve the deal, but does believe his objection will hold weight with the antitrust regulators looking into the transaction, Reuters reports.

Jones is concerned that the merger will hike up premiums in the state.

"California has a highly consolidated insurance market today. This merger with Anthem and Cigna will only make that situation worse," Jones told Reuters.

Anthem responded to Jones saying it doesn't believe the opinion of the California department of insurances is based on the transaction's true merits, anchor Bertha Coombs read from the statement on CNBC's Power Lunch earlier today.

The statement went on to say that the company is confident the Department of Justice and other state regulators "will see the merits of this deal."

Shares of Anthem are up by 1.35% to $132.40 and shares of Cigna are higher by 1.56% to $128.56 on Thursday afternoon.