Reuters is reporting that Warren Buffett and his Berkshire Hathaway (NYSE: BRK.A) empire is preparing to sever ties with its controversial Applied Underwriters unit.
Applied Underwriters’ is embroiled in litigation across the country for, among other things, its use of unfiled and unapproved side agreements to its workers’ comp program. The California Department of Insurance called it bait and switch marketing tactics.
Citing sources it didn’t name, Reuters is reporting that talks are well underway. The buyer reportedly is a group of insurers and a reinsurance firm backed by a hedge fund. The identities of the carriers were not disclosed.
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Applied Underwriters was once but is no longer an affiliate of Berkshire Hathaway. Applied’s management bought it. Berkshire Hathaway bears no responsibility for any of the events which have transpired involving Applied Underwriters’ or its subsidiaries including California Insurance Company.