Louisiana’s “insurer of last resort” has hired an insurance industry veteran as its new CEO, and he’ll face a raft of problems when he takes over next week.
J. John Wortman, who’s been in the business since the early 1960s, will take over the state-controlled Citizens Property Insurance Corp., which is in the midst of massive software problems that have made a mess of the firm’s bookkeeping. Citizens cannot balance its books for 2005-06 – a particular problem because the company has sold nearly $1 billion in bonds but can’t accurately tell the bondholders how much money came in and went out during those years.
Jim Donelon, state insurance commissioner, said that he’s concerned that the Wall Street firms that bought the bonds will get increasingly skittish about Citizens’ financial health if the problem persists. Donelon told a consultant overseeing the fix of the computer system that the problem needs to be corrected as quickly as possible.
“My concern is Wall Street,” Donelon said at a meeting of the firm’s governing board.
The consultant, Bob Crawford, said accurate financial data will be accessible from the computer system in six months. Crawford said he’s not sure how much the fix will cost, but will have a cost estimate next week.
As Citizen’s chief executive officer, Wortman will get $220,000 per year, plus another $18,000 annually for expenses. He will start work at Citizens’ office in Metairie on April 23, Donelon said.
Wortman’s resume says he is now CEO and owner of Wortman Capital Associates, which consults with insurance companies. He is president and a board member of Fortune Financial Inc., which manages a company that provides workers’ compensation insurance in Oklahoma and Florida, according to his resume.
Donelon said Wortman was divesting himself of his interest in those companies and will work full-time at Citizens. He’ll take over from Terry Lisotta, the current CEO, who had been planning to leave the position.
Citizens’ board voted unanimously to approve the hire.
Citizens was created by the Legislature to insure homeowners who can’t find property insurance policies on the open market. Its board includes Chad Brown, Donelon’s chief deputy, and state Rep. Karen Carter, D-New Orleans, chair of the House Insurance Committee.
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