Private consultants will take over management of Louisiana’s state-controlled insurer of last resort after the firm’s outgoing chief physically collapsed and its chief financial officer resigned.
Terry Lisotta, secretary of Louisiana Citizens Property Insurance Corp., collapsed April 4 at the company’s Metairie offices and was hospitalized, said Chad Brown, chairman of the firm’s board. Lisotta apparently has a blood pressure problem, said Brown, who added: “I think he’s doing OK.”
Board members voted unanimously to give daily management duties of the company to Bostick/Crawford Consulting Group, the firm that has been investigating Citizens’ accounting troubles. Lisotta had previously told the board he was leaving the post.
Citizens, which insures homeowners who can’t find policies on the open market, has been beset with troubles over the past year. Since the 2005 hurricanes it has become the Louisiana’s fastest-growing property insurer, as private firms stopped writing new policies.
The company does not know how much money it has, because of bookkeeping troubles since 2005. Citizens also has an unrelated software problem that so far has made it impossible to audit its records.
Caryl Mathes, the chief financial officer, has said she’ll cooperate with the consultants’ investigation but has resigned from her duties as CFO, said Bob Crawford, a partner in Bostick/Crawford.
If they’re not fixed soon, the bookkeeping troubles could interfere with the company’s ability to buy necessary reinsurance before the start of the six-month hurricane season that starts June 1. Billy Bostick, of Bostick/Crawford, said he will be able to report to the board within a week on how serious the problems are and what can be done to balance the books.
Citizens’ board includes state Insurance Commissioner Jim Donelon, Treasurer John Kennedy and Brown, who is Donelon’s chief deputy, Citizens’ board chairman and a member of the state Insurance Rating Commission.
Donelon said he’ll take the criticism if the new management set up leads to further problems.
“I’m going to get blamed or credited with whatever happens going forward,” he said.
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