Saying its finances are weakened, State Farm’s Florida unit wants to get out of the business of property insurance in the state.

The company, Florida’s largest private insurer of homes and condos with 1.2 million policies, wants to keep only auto insurance, it said in a statement. Other State Farm units would still sell life, health and other financial services, it said in a statement.

Under State Farm’s proposal, it would phase out of the property insurance business over two years, giving existing customers time to find new coverage.

If State Farm’s plan is approved by state insurance regulators, that means it will no longer write the full range of property policies, including homeowners, condo, renters, boaters, mobile home, business property, commercial liability and commercial marine.

State Farm cited its “substantially weakened financial position, directly related to its inability to obtain regulatory approval of what it believes to be adequate property insurance rates.”

The Florida Office of Insurance Regulation said that State Farm’s plan must still be approved by regulators. OIR has 90 days to review and approve or reject State Farm’s plan. If it is approved, then State Farm has to provide 180-day notice to those policyholders that it plans to terminate.

Insurance Commissioner Kevin McCarty said in a statement that state insurance regulators had been hearing for months that State Farm was considering no longer writing property insurance in Florida.

In December, the company submitted a document to regulators that outlined its plans to cut 655,000 homeowners policies in Florida by 2010.

”I will do everything within my power to protect Florida consumers from unnecessary destabilization of the insurance market that this might cause and to ensure that Florida consumers are protected and have access to insurance at rates that are not excessive or unfairly discriminatory,” McCarty said.

He noted that OIR has been working with state Sen. Mike Fasano, R-New Port Richey, to develop legislation that will significantly limit the number of nonrenewals a company can issue in a year.

State Farm Insurance of Florida’s request for an average 47.1 percent rate hike was denied by the state insurance commissioner. The insurer said its analysis of its risk and projections of losses actually supported a 67 percent increase.

”Faced with steeply declining resources to cover future claims and expenses, State Farm Florida has little choice,” Jim Thompson, president of State Farm Florida, said in the statement. “This is not an action we wanted to take, but one we must take given the realities of the Florida property insurance market. We regret the impact this will have on our customers, employees and agents in Florida.”

As of Sept. 30, State Farm insured 41,563 homes in Miami-Dade County, 47,521 in Broward, 38,868 in Palm Beach and 85 in Monroe County.