A state probe into two insurance companies will result in $2 million worth of refunds to Florida customers of the company, state Insurance Commissioner Kevin McCarty said Monday.

The companies, American Mercury Insurance, which sells homeowners policies, and Mercury Insurance Co. of Florida, an auto insurer, agreed to the payments as part of a consent order arising from allegations of improper claims settlements and charging rates that weren't approved.

McCarty's office said it had seen an increase in complaints from Mercury policyholders, following the 2004 hurricane season. Among the violations state regulators found were that the company improperly canceled policies, failed to pay the full amount on covered claims, and failing to provide specific reasons for denial of claims.

The company cooperated with the investigation and began paying refunds to policyholders in December of last year, before state officials were finished with the investigation.

"We have already installed a new Florida-based executive team that is empowered to make all the enhancements necessary to return our Florida operations to the exceptionally high level of quality that has marked Mercury's operations since the company was founded in 1962," said John Sutton, vice president of the company's Southeast region.

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