PROVIDENCE, R.I. (AP) _ Blue Cross & Blue Shield said it will give back $21 million to its customers because of a bigger-than-expected surplus this year.

``We exceeded our best estimate,'' said Blue Cross spokesman Scott Fraser. ``We feel it's important to share that with all of our constituencies.''

Blue Cross had $70 million in earnings this year, and _ as planned _ will put $49 million into reserves. But because members did not use health care services as much as expected, the company has an extra $21 million that it will dole out to doctors, hospitals, employers and some subscribers, said Fraser.

The givebacks come less than a month before the General Assembly returns to work. Lawmakers have said a priority is stiffening regulatory oversight of the large health insurer.

Blue Cross enrolls 650,000 people and controls 70 percent of the state's commercial health insurance market. It has amassed reserves of more than $300 million, according to The Providence Journal.

One-third of the giveback money will come in the form of a one-month, one-time premium reduction of 5 percent to group plans and individual-plan subscribers, to occur in the first quarter of 2004. For group plans, it will be up to employers whether any of the savings will be passed along to subscribers. The rate reduction requires state approval.

Another $7 million will be distributed among hospitals during the first quarter of 2004, according to a formula that has yet to be devised. This will be a one-time payment.

And $7 million will go to higher reimbursements for doctors in the first quarter of 2004. Those higher rates will continue to be paid even after the $7 million has been expended. Fraser said that the company intends to bring its physician-reimbursement rates closer to those of the federal Medicare program, now the highest payer in Rhode Island.

Blue Cross also projected that the average premium next year would increase 13 percent, down from the 18-percent average increase this year. In the fourth quarter of next year, the company forecasts that the average premium increase will fall into the single digits.

Fraser said that the reduction in use of health care services that contributed to the surplus is part of a national trend, but may also reflect the success of some educational initiatives.