Bermudian insurer and reinsurer Axis Capital has replaced founder John Charman as chairman after a board dispute over the “role and responsibilities of the chairman position”.

In a terse statement, Axis says the decision to replace Mr Charman as non-executive chairman was made after the board and Mr Charman could not resolve their differences.

“The board concluded that the company would be best served by someone else serving as chairman,” the statement says.

Mr Charman had only been appointed non-executive chairman in May after he stepped down as President and CEO to make way for former CFO and VP Albert Benchimol.

The board has returned former Axis executive chairman Michael Butt – who served in that role from September 2002-May 2012 before stepping aside for Mr Charman – to the chairman’s role, although this time he will serve in a non-executive capacity.

The statement says Mr Butt has “a thorough understanding of the role and priorities to be carried out by the chairman of Axis Capital”.

Mr Charman, who founded Axis after leaving Ace in 2001, will receive a $US11 million ($10.74 million) payout as part of the termination deal, with his contract originally not due to expire until December 31 next year. He will remain on the Axis board.

“As Mr Charman was elected to the board by the company’s shareholders, he will remain a member of the board,” the statement says.

Axis shares closed down 2.5% on the New York Stock Exchange on the day the news was announced.