2 Berkshire Hathaway affiliates accused in California of workers’ comp ‘scheme’
Source: Omaha World Herald
By Steve Jordon
Californias insurance commissioner ruled this week that two affiliates of Omaha-based Berkshire Hathaway Inc. broke California law with a complex insurance scheme that boosted their profits while raising costs for a family-owned laundry.
California Insurance Commissioner Dave Jones said Applied Underwriters and California Insurance Co. designed a workers compensation program called EquityComp to circumvent his departments review, to the disadvantage of small- and medium-sized businesses.
The arrangement meant smaller businesses would risk high costs as workers comp claims occurred, rather than paying steady rates based on past claims.
The decision resulted from a complaint by the 60-employee Shasta Linen Supply Inc. of Sacramento.
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