Allstate Texas Lloyds must refund more than $56 million in rateovercharges to homeowners they insure, the Texas Department ofInsurance said yesterday.

The announcement followed a judge's ruling last week affirming a2004 order by Texas Insurance Commissioner Mike Geeslin requiringthe insurer to reduce its homeowners insurance rates by 5percent.

Allstate spokesman Joe McCormick said the company made the 5percent reduction in May and is considering whether to appeal theorder to make refunds.

Jerry Hagins, a spokesman for the state insurance department,said the Allstate subsidiary in 2004 had filed for "a 1 percentrate decrease, but we didn't feel that was adequate." He said thedepartment felt the amount the company wanted to charge would beexcessive and ordered the reduction, which the companychallenged.

Last spring, the commissioner's finding was backed up by thestate's Office of Administrative Hearings, which ordered a ratereduction and refund for policyholders going back to 2004.

The company appealed the case to Travis County District Court inAustin, where Judge Darlene Byrne ruled in favor of thedepartment.

Mr. Hagins said Allstate is the number-two writer of homeownersinsurance in Texas, with a 16.5 percent share of the market lastyear.

The insurance department said it disapproved the lower decreasethe company sought, "based on an actuarial analysis by thedepartment, which found Allstate's homeowners rates to beexcessive, unreasonable and unfairly discriminatory."

The judge's order also requires Allstate to refund topolicyholders the amount overcharged since December 2004, includinginterest on the overcharged amount at the annual rate of 11.25percent.

Her ruling follows a mandate by the insurance department thatrates must by justified to regulators.

Mr. McCormick said the insurer has "a fundamental disagreementwith the way the TDI actuaries analyzed our rates. We contend theyhave to look at our rates as a whole.

In examining different perils, Mr. McCormick said the TDI hadjudged Allstate's evaluation of the risk as too high for some andtoo low for others, but "didn't take into account those rates thatwere lower."

He said the company believes TDI actuaries "need to look at therate as a whole. As far as the refund is concerned, we believe thedepartment. took a snapshot approach looking at the rate in certainpoint in time rather than looking at longer term trends.

"We certainly feel our rates our reasonable and competitive," hesaid, adding that the company in Texas has 750,000 homeownerpolicyholders and "We're committed to taking care of them withcompetitive rates that are adequate and committed to protecting ourcustomers long term and having the strength to do that."