Warren Buffet’s Berkshire Hathaway companies announced in a filing with the Securities and Exchange Commission that is has unloaded its 81% share of AU Holding Company that owned California Insurance Company and other assets of the Applied Underwriters subsidiary. Applied Underwriters CEO Steve Menzies is acquiring control of the licensed insurance company operations while the Quasha Group is reportedly acquiring the ancillary operations which apparently handle most of the cash.
California Department of Insurance officials had to sign off on the deal for the transfer of ownership in California Insurance Company to proceed, but Department officials are unwilling to say what conditions, if any, they placed on the deal. Applied Underwriters is a sensitive subject for the Department and Insurance Commissioner Ricardo Lara after revelations that Lara accepted political donations from individuals connected to Applied Underwriters and that he held multiple meetings with Menzies and others connected to the sale.
Lara and the California Department’s silence stands in stark contrast to the openness and transparency of regulators in Texas and Iowa.
Iowa was the first to approve the sale but placed numerous conditions, but it kicked them out of the state – with the requirement that Applied redomicile the carriers under its jurisdiction someplace else. Iowa is giving the company a year to move four carriers – Applied Underwriters Captive Risk Insurance Company, Continental Indemnity Company, Illinois Insurance Company, and Pennsylvania Insurance Company.
Additionally, the Texas Department of Insurance responded in minutes with a copy of its official order approving the acquisition of Texas Insurance Company by Menzies. The primary condition TDI placed on the deal is a requirement for it to be kept abreast of the fee structure of the management services agreement between TIC and Applied Underwriters Inc. that Quasha Group will control.
CDI officials have produced no official documentation from the Form A or its apparent decision to approve the sale. “I don’t have any info at this point. Once we do, someone will get back to you,” was the Department’s response as of yesterday afternoon.