Knowles Steps Down as CEA Chief Executive

Indicating it was time to try a new line of work, David Knowles stepped down last month as chief executive of the California Earthquake Authority (CEA).

Knowles, who helped lead the CEA to a cash position of more than $1 billion amid rate decreases to policyholders, is a former Republican State assemblyman who served as a chief of staff to former Insurance Commissioner Chuck Quackenbush.

Knowles had received a four-year contract by the Republicans in late 1998, three weeks prior to the Democrats taking over control of the Board. His resignation came following a closed-door meeting Dec. 17.

In a release to the media, Knowles noted that he was deeply indebted to his colleagues at the CEA, to its participating insurers, and to the Board for “a wonderful three years at the helm of this unique organization.”

Board Chair J. Clark Kelso praised Knowles for his service to the CEA, stating that “under David’s leadership, the CEA grew stronger and California’s housing market grew more secure.”

Stan Devereux, Legislative and Public Affairs Director for the CEA, commented that not too much should be made of the resignation, despite stories in both the Los Angeles Times and Associated Press that questioned whether Knowles left voluntarily or not.

When asked if Knowles left on his own accord or was forced out, Devereux commented “The most important thing to point out is that David Knowles resigned—he was not terminated. The details of the agreement between Mr. Knowles and the Governing Board were discussed only in closed session, so I don’t really have any specific knowledge to offer beyond the press release.”

Knowles, whose resignation takes effect Jan. 16, was contracted through the end of 2002. As part of his severance deal, Knowles will be paid his $160,000 salary when he departs his position.

As for finding a successor to Knowles, Devereux stated that the Governing Board at its December meeting agreed to begin the search process and to have the insurance commissioner, who has a vote as a member of the Board which fills the post, act as the recruitment manager.

“Apparently, according to the Board, they already have some resumes in hand,” Devereux commented.

While Knowles would not comment on his leaving the CEA, in a fifth-year anniversary letter stating the success of the Authority dated Dec. 10, Knowles commented that, “The CEA today is a mature and respected presence in the California insurance landscape. Financially, actuarially, and managerially, the affairs of the CEA are in good order and are proceeding straight ahead.

“It’s been an extraordinary five years of progress, but we want to do more,” Knowles stated.

Topics California