State Farm nudges Florida insurance rates lower

TALLAHASSEE, Fla., Oct 2 (Reuters) - Florida regulators on Tuesday said State Farm SFITX.O had agreed to cut its property insurance rates in Florida by an additional 2 percent, after being hit with a subpoena by state officials probing high insurance costs.

The 2 percent reduction comes on top of a 7 percent cut State Farm implemented earlier this year and will result in total savings of about $23 million for local policyholders, the Florida Office of Insurance Regulation said in a statement.

State Farm had also agreed to refund excess surcharges, the regulator said. The excess amount, $23 million, plus 5 percent simple interest, will be refunded to State Farm policyholders beginning in six months.

The insurer also agreed to cooperate with authorities on further investigations related to potential collusion between insurers, trade associations and rating organizations aimed at preventing Florida's high homeowner premiums from going down, the Office of Insurance Regulation said.

Florida Insurance Commissioner Kevin McCarty and Gov. Charlie Crist have accused some insurers of seeming to act in collusion to prevent rate rollbacks ordered by the state legislature in January.

The rollbacks were to counter a jump in premiums after two active Atlantic hurricane seasons in 2004 and 2005. (Reporting by Tom Brown, editing by Tim Dobbyn)