Agency looking at fee cuts
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The Louisiana Insurance Guaranty Association board elected officers and two board members on Thursday and began looking into ways to reduce the fees it pays its investment firm.
The board re-elected Michael Gray, president of Gray Insurance Co., of Metairie, to a second term as chairman. Board member Stephen Schrempp was elected secretary and board member Marham McKnight was re-elected treasurer.
Board members representing the Louisiana insurance industry voted to reappoint David Ross, Louisiana auto claims manager for State Farm, to a second term on the board. The industry members also appointed Keith Thompson, who heads America First’s commercial operations in Texas and Louisiana, to a first term.
Five of the board members are elected by Louisiana insurance companies. The other four board members are appointed by the state Legislature and the Insurance Commissioner.
Usually the insurance companies elect their board members at the association’s annual meeting, operations and logistics director John Wells said. However, Thursday, the association was unable to convene a quorum, or 40 percent, of the member companies.
When that happens, the board members representing the insurance industry may elect members to fill vacancies, Wells said. Then when the annual meeting is reconvened, the member insurers may ratify the election.
After failing to muster the quorum Thursday, board members voted to amend the association’s plan of operations to lower the quorum to 25 percent of member companies.
In other action, the board took the first steps to asking for bids for an investment adviser for its $260 million in long-term bonds.
Schrempp said the association believes it can lower the fees it now pays to Wells Fargo Advisors LLC.
Schrempp said the board had asked Wells Fargo to reduce those fees by about 25 percent, to around $150,000 a year.
However, Daniel Tobey, vice president, investments for Wells Fargo, said the corporate office in St. Louis believes the fee schedule is competitive and would like to continue working for the association under the current agreement.
McKnight said he would begin gathering information to take bids from other investment firms.
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