Sale of beleaguered comp insurer underwayPosted On: Jun. 28, 2019 2:04 PM CST
A transaction is pending between workers compensation insurer Applied Underwriters Inc. and United Insurance Co., according to an Applied Underwriters spokesman.
However, a news report about Berkshire Hathaway Inc.’s sale of its majority stake in Applied Underwriters, which has been subject to regulatory investigations in California and New Jersey, is “incomplete,” the spokesman said.
“Information in the March 30, 2019, quarterly filing with state regulators is technically correct, but part of a larger transaction,” he said, declining further comment.
In March, the New Jersey Department of Banking and Insurance issued an enforcement action against Applied Underwriters accusing the company and its affiliates of marketing and selling unfiled and unapproved workers compensation programs in violation of New Jersey law.
In January, a federal appeals court ruled that a workers compensation program involving a reinsurance participation agreement offered by the Berkshire Hathaway unit constituted insurance and was not subject to arbitration under Virginia law.
In June 2017, Berkshire Hathaway Inc. units California Insurance Co. and Applied Underwriters Captive Risk Assurance Co. settled with the California Department of Insurance over alleged “bait and switch” marketing tactics for workers compensation coverage, with the insurers agreeing to lower rates for certain coverages and make other changes to coverage terms.
Spokespersons for Berkshire Hathaway, Grand Cayman-based United Insurance and the state insurance departments could not be immediately reached for comment.