WASHINGTON–Marc Racicot, American Insurance Associationpresident and chief executive officer, is resigning his position asof February 2009, and will be replaced by AIA Chief OperatingOfficer Leigh Ann Pusey.

The resignation was announced today following a meeting of thetrade group's board in Washington, D.C., by AIA Chairman EvanGreenberg, the CEO of Ace Ltd.

Mr. Racicot was not available for comment on his futureplans.

Several sources indicated that Mr. Racicot decided to step downin the face of declining revenues due to industry consolidations,as a means of saving the jobs of others at the trade group. Thesources made clear that the move was underway before DemocraticSen. Barack Obama was elected president Nov. 4.

Mr. Greenberg's announcement mentioned that during his tenure,Mr. Racicot “has made a number of important management andreorganization proposals to the AIA board, which the board hasendorsed.”

One of those proposals, Mr. Greenberg said, “calls for arealignment of AIA management and a change of leadership.”

Reacting to the decision, Ken Crerar, president of the Councilof Insurance Agents and Brokers, said, “Of course, 2009 is a yearof change in Washington on a national scale, and now in our ownindustry with this news.”

He added, “We are grateful to Governor Racicot for his years ofservice as AIA president and congratulate Leigh Ann in her new roleat the helm. Ms. Pusey also currently serves AIA as seniorvice-president for government affairs.

“She has proven herself a capable and effective insuranceadvocate and colleague of the Council's and we look forward toworking with her in this new leadership role,” he added.

Sources said the trade group is adjusting its budget in the faceof belt-tightening by current members and the loss of two membersthis year–one being Selective Insurance, and the other beingSafeco, which was acquired by Liberty Mutual.

Mr. Racicot joined the AIA in August 2005 after a stint as alobbyist with Bracewell & Guiliani, a Houston and Washington,D.C. law firm.

He served two terms as governor of Montana in the 1990s, andlater as chairman of the Republican National Committee, and fromJuly 2003 as chairman of the Bush-Cheney '04 re-electioncampaign.

Ms. Pusey in her current role is responsible for the managementand operation of the association's government affairs department,directing a staff of professional lobbyists who represent AIAbefore Congress and in the states on all matters of interest to theproperty-casualty insurance industry, and she assists in theoverall management of the association.

She joined AIA in December 1996 and was appointed to her currentposition in 2006. Previously, she served as senior vice presidentfor federal affairs and before that as senior vice president forpublic affairs.

In the statement disclosing the change, Mr. Greenberg lauded Mr.Racicot for “working diligently and effectively representing theproperty-casualty insurance industry over the last three-and-a-halfyears, continuing AIA's role in advocating for a strong and healthyproperty-casualty industry.”

He said in Ms. Pusey's new role as president and chief executivethe association will be “well positioned to continue its mission asthe leading public policy advocate for the property-casualtyinsurance industry.”

David A. Sampson, president and CEO of the rival PropertyCasualty Insurers Association of America (PCI), said in astatement, “I would like to express my great personal respect andadmiration for Governor Racicot, and these sentiments long predatemy tenure at PCI.

“He has exemplified excellence in every role he has taken on. Hehas ably guided AIA for more than three years and has been a strongleader for our industry. He has also been an outstanding publicservant, as the voters of Montana made clear…I will miss having himas a colleague, personally and professionally, and I wish him allthe best that life has to offer in the future.”

(Correction: Nov. 19–In the original version of this story, NUmistakenly reported that Selective Insurance–cited as one of twocarriers that had left AIA–had divested its operating units, whichis in fact not the case. A company representative reiterated that“Selective remains a holding company for seven insurance companiesrated “A-plus” (Superior) by A.M. Best.”)