ST. PAUL -- More than 1,600 Minnesota drivers will be receiving refunds from Farmers Insurance Exchange after the insurance firm was accused of unfair pricing practices.

The Minnesota Commerce Department examined Farmers Insurance Exchange’s pricing practices and found that the company had been charging renters higher auto rates than homeowners, the agency said in a statement released Tuesday.

It is illegal in Minnesota to set auto insurance rates based on residential status.

Farmers Insurance Exchange has agreed to issue around $315,317 in refunds and credits to the 1,620 policyholders identified, according to the Commerce In addition, the company will pay a $75,000 penalty and discontinue the pricing policy that favored homeowners over renters, the agency statement said.