The Connecticut Insurance Department has rejected a request by The American Republic Insurance Company to raise premiums by an average of 35 percent for individual-market health plans, ruling that it would be excessive.

The proposal would have affected 81 policyholders in the state. The covered policies are “grandfathered,” meaning they do not have to comply with certain requirements of the federal health reform law. They can’t be sold to new customers.

The company had said the policies were “highly subject to inflation” and other increased medical costs, and that the rate increase was necessary to maintain fiscal stability.

But insurance department actuary Paul Lombardo wrote that the block of business had performed at the level the company initially expected and that the company did not submit data to support its assumption that costs would increase.

“Any increase at this time is determined to be excessive,” Lombardo wrote.

Separately, the department approved a proposal by Aetna to reduce premiums by an average of 10 percent for individual-market plans that cover more than 15,000 state residents. The change will take effect Sept. 1.

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