The chief executive officer of state-backed Louisiana Citizens Property Insurance Corp. abruptly resigned Thursday following a closed session of the insurer’s board of directors to discuss personnel matters.
David Thomas, a 40-year veteran of the insurance industry, declined to comment after the meeting.
Insurance Commissioner Jim Donelon said he could not discuss the details for Thomas’ resignation, other than to say it involved other personnel issues.
“I can confirm that Mr. Thomas has submitted his resignation, that there was a difference of philosophy between the board, myself and Mr. Thomas,” Donelon said. “We will begin a search utilizing the same headhunter we have the last three times I’ve hired a CEO for Citizens.”
One of Citizens’ senior staff members will lead the insurer until a permanent replacement can be found, he said.
State-backed Citizens insures properties that private insurance companies won’t touch.
Thomas was hired in July 2013. He had been president and CEO of Silveus Insurance Partners in Indiana.
At the time, Donelon described Thomas as having “all of the qualifications” he was looking for to head Citizens. Donelon touted Thomas’s experience and a proven track record of developing and executing his strategic vision.
Under Thomas’ direction, Citizens began issuing its own policies and handling noncatastrophe claims, rather contracting with private companies for that work.
The moves reduced Citizens’ costs by an estimated $7 million to $10 million per year.
Last July, Thomas received a 5 percent raise, upping his salary to $288,750.
Separately during Thursday’s meeting, plans were announced to refinance $415.3 million that Citizens borrowed to pay Hurricane Katrina claims.
The move is expected to save more than $100 million in interest payments and reduce the payback period on the debt by two years.
“Interest rates right now are at an all-time historical low,” Chief Financial Officer Steve Cottrell said.
Those rates, about 2 percent, combined with Citizens’ strong creditworthiness, will enable the insurer to achieve the savings. Citizens’ board voted Thursday to seek proposals on refinancing the bonds.
Citizens originally borrowed $978 million to pay Katrina claims. The insurer has since refinanced $375 million of the total, cutting interest payments by more than $18 million a year.