Berkshire Hathaway subsidiary National Indemnity Co. is acquiring Medical Liability Mutual Insurance Co. of New York for an undisclosed price.
The deal comes as the insurer completes its conversation from a mutual company to a stock insurer.
The insurer is the largest underwriter of medical professional liability insurance in New York. MMLMIC reported $1.8 billion in policyholders’ surplus as of Dec. 31, 2015.
The deal will close in the 2017 third quarter, pending the usual closing conditions and regulatory approval processes. MLMC disclosed the news in a lengthy press release posted on its web site.
Berkshire Hathaway CEO Warren Buffett, quoted in the release, called MLMIC “a gem of a company that has protected New York’s physicians, mid-level providers, hospitals and dentists like no other for over 40 years.” He said the acquisition will help boost the insurer’s “capacity to serve these and other policyholders for many years to come.”
Once the deal is completed, each owner of an eligible MLMIC policy will be entitled to receive a proportionate share of all of the cash consideration paid by National Indemnity Co.
MLMIC President Robert Menotti said the acquisition will allow MLMIC to expand.
“MLMIC will be able to expand its offerings, with more customized policy limits, with more customized policy limits, risk-sharing features and services to groups, facilities and other large accounts,” Menotti said in a letter to policyholders quoted in the press release.
Menotti added that Berkshire Hathaway is also committed to keeping MLMIC’s culture and approach.
“Berkshire Hathaway values our operations, board, staff and endorsed partners,” Menotti said. “Most importantly, Berkshire Hathaway is committed to MLMIC’s future success and its ongoing dedication to serving policyholders.”
In 2012, Berkshire Hathaway’s medical professional liability insurance unit, Medical Protective Co., purchased New Jersey-based Princeton Insurance Co., a professional liability insurer for healthcare providers, which was previously owned by Medical Liability Mutual Insurance Co.
Berkshire Hathaway had acquired Medical Protective Corp. from GE for $825 million in 2005.
More recently, last July, Berkshire Hathaway’s MedPro Group agreed to acquire Oklahoma healthcare liability insurer PLICO Inc., which is owned by the Oklahoma State Medical Association.
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