NEW YORK (Reuters) - Insurer Allstate Corp (ALL.N: Quote, Profile, Research) has reached an agreement with Texas regulators to pay over $70 million to current and former policyholders, according a statement from the Texas Department of Insurance.

The agreement settles litigation between Allstate, the Texas Department of Insurance, and the Office of Public Insurance Counsel that alleged Allstate charged customers excessive home insurance rates from 2004 to 2007.

The payments will come in the form of refunds, credits and rate reductions for about 700,000 Allstate policyholders.

Under the agreement, Allstate will give customers nearly $37 million worth of refunds. The insurer also agreed to reduce insurance rates by 3 percent, and will freeze home insurance rates for the next year, beginning June 2.

The additional credits and reductions have an estimated value of about $35 million, according to the Texas Department of insurance.

Allstate Texas Lloyds is the second largest home insurer in Texas.

(Reporting by Steven Bertoni; editing by Jeffrey Benkoe)