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California Dept of Insurance statement on Berkshire Subsidiary


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I'm curious to hear Berkshire's response. Seems odd not filing the policy with the state commissioner...


Found this article in the WSJ today:

"Regulator Faults Berkshire Hathaway Insurance Unit"



“The company strongly disagrees with the commissioner’s decision and intends to vigorously pursue all legal avenues,” said a person authorized to speak on behalf of Applied Underwriters.
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I'm all for uncovering the shadier side of Berkshire, but can anyone explain the following to me:


The insurance company later had one of its affiliates—another Berkshire Hathaway entity—sell Shasta Linen a second insurance policy called EquityComp, which is not a traditional guaranteed cost workers' compensation insurance policy. This second insurance policy was a retroactive non-linear insurance policy, which adjusted the rates paid based on current loses and provided no experience modification of rates based on the employers' claims experience.


Did they have a gun to this business's head? Why just, you know, not buy the shitty policy?

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