AUSTIN -- Farmers Insurance will revise its plan for an increase in homeowners rates because state regulators indicated they would turn down its initial proposal, officials said.

Farmers, the third largest home insurer in Texas, withdrew its proposed 6.6 percent statewide increase in homeowners rates on Monday, canceling a premium increase set to take effect.

Ben Gonzales, spokesman for the Texas Department of Insurance, said the agency was prepared to reject the plan because of concerns about rate variations across the state and indications that Farmers’ current rates are adequate.

“It was clear that we would disapprove the filing as it was written,” Gonzales said.

The state’s file-and-use law allows insurance companies to raise rates once they’ve notified the insurance department. However, the company must roll the rates back and issue refunds—with interest -- if the commissioner of insurance determines the increases were not warranted.

Gonzales said it was “a lot simpler for them to withdraw the filing than to move forward” on a plan that was opposed by the state.

Farmers spokeswoman Michelle Levy said the company still wants to adjust its rates and is working on a new plan.

“They had questions about our filing, so we’re working with them to answer their questions and we expect to refile a proposal within 30 to 60 days,” she said.

Alex Winslow of Texas Watch, a consumer group that monitors insurance issues, said “homeowners are relying on the insurance department to do its job and make sure that premiums come down once and for all.”

He said Farmers’ rate plan withdrawal is good news if it results in lower rates.

“If this is just more posturing on the part of the company and the insurance department, then it is par for the course,” he said.

Gonzales said state actuaries were concerned about rate differences in Farmers’ proposal, from a 50 percent increase along the Texas coast to a 10 percent decrease for some North Texas customers.

“The increases are heavily weighted toward the coast, which may be appropriate because of the risks. But we need to see more documentation,” he said.

The department also found that the company’s loss ratios over the past year indicated healthy profits, Gonzales said.

The department is still reviewing a rate increase proposed by Allstate Insurance, the second largest home insurer, which wants to raise the average cost of its policies by 6.9 percent.