Allstate Corp. will pay a $5 million fine to the Florida Insurance Regulatory Trust Fund, to settle a dispute with the state.

Allstate (NYSE: ALL) also agreed to begin selling more property insurance in Florida and to lower its rates.

State insurance regulators have been battling Allstate for several months, alleging the company failed to freely provide documents requested in a subpoena and falsely asserted trade secrets in a rate filing.

Allstate was suspended from doing business in the state Jan. 17 after Insurance Commissioner Kevin McCarty halted a hearing into its reinsurance program and their relationships with risk modeling companies, insurance rating organizations and insurance trade associations.

Under the agreement, Allstate is required to lower its homeowners rates statewide by 5.6 percent within 30 days, for a total reduction of 19.8 percent when including a 14.2 percent reduction that took effect June 1, 2007.

Allstate also must write 100,000 new homeowners insurance policies over the next three years, including 50,000 basic homeowners policies and 50,000 condominium, renters or other residential property insurance policies, a release from the Florida Office of Insurance Regulation said.

Allstate’s corporate office also agreed to cancel a $175 million surplus note it issued to the Florida Allstate companies. The move would enable the company to solidify its Florida capital base and write more policies for Florida consumers, the release said.

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