Consultants to take over Citizens, whose CEO is hospitalized

THE ASSOCIATED PRESS

Private consultants will take over management of Louisiana’s state-controlled insurer of last resort after the firm’s chief physically collapsed and its chief financial officer resigned.

Terry Lisotta, secretary of Louisiana Citizens Property Insurance Corp., recently collapsed at the company’s Metairie offices and was hospitalized, Chad Brown, chairman of the firm’s board, announced at the board’s meeting last Wednesday. Lisotta apparently has a blood pressure problem, said Brown, who added: “I think he’s doing OK.”

The board had been considering replacing Lisotta before his health troubles. On Wednesday it voted unanimously to give daily management duties of the company to Bostick/Crawford Consulting Group, the firm that has been investigating Citizens’ accounting troubles.

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 makes 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.

Citizens has not been able to produce accurate financial statements for the past two years and cannot audit its books because of a computer software problem that originated in 2005.

Teams of lawyers, accountants, software specialists and the state legislative auditor have been working in the past month to help fix the problems, but are months from any resolution.