TALLAHASSEE, Fla. (AP) — Citing sinkhole losses and higheroperating expenses, State Farm Florida asked state regulatorsTuesday for a 28 percent premium increase on its homeowners'policies.

Sinkhole claims, which are approaching $2 billion over the pastfive years in Florida, have exploded at a great cost to theinsurance industry.

Questioned by state actuary Bob Lee, State Farm executivestestified that it lost $327 million in the last five years, most ofit in the last two, on sinkhole claims alone. The company isdropping its sinkhole coverage in standard policies, but offeringit to homeowners separately at a premium rate.

However, the state's insurance consumer advocate was at oddswith State Farm over the amount of discount policyholders shouldreceive when the sinkhole coverage is removed from theirpolicies.

Read More:Related Coverage of Sinkholes byPropertyCasualty360.com

State Farm wanted to discount the policies about $150 onaverage, but actuary Steve Alexander testified at the two-hourfact-finding hearing that it should be at least twice that.

Alexander also said State Farm was paying its agents commissionswell above the national average, adding unnecessarily to itsoperating costs in Florida.

If approved, the new rates would take effect as early as April 1for new business and July 1 on renewals.

State Farm also asked for a rate increase of nearly 96 percentfor a smaller book of its business for rental dwellings. It holdsabout 50,000 such policies now.

Deputy Commissioner Robin Westcott said the Office of InsuranceRegulation would likely have a decision on the State Farm requestsin two to three weeks.

State Farm reached an agreement with OIR a year ago to cut125,000 policies over an 18-month period to reduce its liability inhurricane-prone Florida.

State Farm is the largest private property insurer in Floridawith slightly more than 500,000 policyholders. The state-backedCitizens Property Insurance Corp. is the largest with 1.2 millionpolicyholders.

State Farm and OIR had been at odds on rates, but Florida'sLegislature wants more accommodations for private insurers in hopesof somehow reducing its increasing risk with a growing Citizens,which is backed up by assessments on most insurance policies soldin the state.

Dozens of startup companies have evolved in Florida in the pastdecade in attempts to reduce Citizens' stake.