(Reuters) - A Berkshire Hathaway Inc BRKa.N unit has agreed to buy Medical Liability Mutual Insurance Co, expanding billionaire investor Warren Buffett's business of protecting doctors, dentists and other healthcare professionals against lawsuits.
MLMIC is the largest underwriter of medical professional liability insurance in New York, Berkshire’s National Indemnity Co unit said in a joint statement on Monday announcing the purchase.
Terms were not disclosed, but MLMIC said its policy holders’ surplus, a measure of assets minus liabilities, was about $1.8 billion at the end of 2015. The purchase is expected to close in the current quarter, pending regulatory approvals.
In the statement, Buffett, who is Berkshire’s chairman and chief executive, 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.”
Berkshire has roughly 90 operating businesses in several sectors, but remains best known for insurance operations such as the Geico auto insurer, the General Re reinsurer, and a business that provides coverage against major catastrophes.
In 2005, Omaha, Nebraska-based Berkshire bought Medical Protective Co, a century-old medical malpractice insurer based in Indiana.
MedPro later bought Princeton Insurance Co, which insures healthcare professionals in New Jersey, from MLMIC. Last year it bought PLICO, which provides similar coverage in Oklahoma.
Buffett has said he has been “absolutely delighted” with those purchases, after having called malpractice insurance “a graveyard for many insurers” in 2006.
MLMIC on its website said it would convert to a stock company from a mutual company owned by policy holders. It also said the Berkshire affiliation would give it greater resources to pay claims and underwrite more business.
Keefe, Bruyette & Woods and the law firm Willkie Farr & Gallagher advised MLMIC on the transaction.
National Indemnity did not immediately respond to a request for further comment.
Reporting by Jonathan Stempel in New York and Shailesh Kuber in Bengaluru; Editing by Shounak Dasgupta and Richard Chang
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