Marc Racicot, the American Insurance Association’s president and chief executive officer, is resigning his position as of February 2009, and will be replaced by AIA Chief Operating Officer Leigh Ann Pusey.

The resignation was announced following a meeting here of the AIA’s board by AIA Chairman Evan Greenberg, the CEO of ACE Ltd.

Mr. Racicot–who advocated for adoption of at least an optional federal charter, during two “Great Debates” hosted by National Underwriter earlier this year–has not commented on the reasons for his departure, or his future plans.

However, industry sources said AIA is adjusting its budget in the face of belt-tightening by members and the loss of two carriers this year–one being Selective Insurance, and the other Safeco, which was acquired by Liberty Mutual.

Several industry sources indicated that Mr. Racicot decided to step down in the face of declining AIA revenues, as a means of saving the jobs of others at the trade group. The sources made clear that the move by the former Republican Party leader was underway before Democrat Barack Obama was elected President on Nov. 4.

Ms. Pusey, in her current role, is responsible for the management and operation of the association’s government affairs department, directing a staff of professional lobbyists who represent AIA before Congress and in the states on all matters of interest to the property-casualty insurance industry. She also assists in the overall management of the association.

She joined AIA in December 1996 and was appointed to her current position in 2006. Previously, she served as senior vice president for federal affairs, and before that as senior vice president for public affairs.

Mr. Greenberg’s announcement mentioned that during his tenure, Mr. Racicot “made a number of important management and reorganization proposals to the AIA board, which the board has endorsed.” One of those proposals, he said, “calls for a realignment of AIA management and a change of leadership.”

Mr. Racicot joined the AIA in August 2005 after a stint as a lobbyist with Bracewell & Guiliani, a Houston and Washington, D.C. law firm. He served two terms as governor of Montana in the 1990s. Later, he chaired the Republican National Committee, as well as the Bush-Cheney 2004 reelection campaign.

In the statement disclosing the change, Mr. Greenberg lauded Mr. Racicot for “working diligently and effectively representing the property-casualty insurance industry over the last three-and-a-half years.” He said with Ms. Pusey taking over as president and chief executive, AIA will be “well-positioned to continue its mission.”

Reacting to the decision, Ken Crerar, president of the Council of Insurance Agents and Brokers, said that “of course, 2009 is a year of change in Washington on a national scale, and now in our own industry with this news.” He said Ms. Pusey has “proven herself a capable and effective insurance advocate and colleague of the Council’s, and we look forward to working with her in this new leadership role.”

David A. Sampson, president and CEO of the Property Casualty Insurers Association of America, said Mr. Racicot has “exemplified excellence in every role he has taken on. He has ably guided AIA for more than three years and has been a strong leader for our industry.”

o Served two terms as governor of Montana in the 1990s.

o Chaired the Republican National Committee, as well as the Bush-Cheney 2004 reelection campaign.

o Advocated at least optional federal regulation of insurance in two “Great Debates” hosted this year by NU.

o Next Gig: To be determined.