(Reuters) - Insurer Travelers Companies will pay $10.5 million in refunds and penalties for violations of California insurance law in 2006, the state's insurance department said on Monday.

Travelers will refund $9 million to customers and pay a $1.5 million fine for violations in the first six months of 2006, the state said.

Examiners looked at nearly 1,300 policies and found about 220 errors, mostly related to improper underwriting or the improper application of rates.

The state noted it received "extraordinary cooperation" from the company in the course of its probe.

A Travelers spokesman could not be immediately reached for comment.

(Reporting by Ben Berkowitz; editing by M.D. Golan)