by FACTUAL52 » Sun Sep 12, 2010 04:10 pm
I have always been told that an individual cannot own an Insurance Company. Upon checking the holdings of Berkshire Hathaway, it is obvious that Warren Buffet is the sole owner of several major players (Including Geico) Does the rules change for Billionaires?
Posted: Sun Sep 12, 2010 04:32 pm Post Subject:
Why would an individual not be able to own an insurance company. It's _highly_ unlikely... as you need to have several million... but it's not illegal in anyway.
Also, Warren Buffet is not the sole owner of BH.... it's a company with shareholders. BH has about $300 billion in assets. Buffet has about $47 billion. Buffet is the CEO of BH... not the owner.
To use GEICO as an example, it's revenue is about $9 billion/year. I don't want to guess at the selling price but lt's just guess it's about $100 billion. Know any one person with $100 billion laying around? Hint... richest person in the world is worth $53 billion. But that is not to say any one person could not make/buy an insurance company on their own.
Posted: Mon Sep 13, 2010 12:37 pm Post Subject:
Warren Buffet is the sole owner of several major players
Even Warren Buffet is intelligent enough not to be the "sole owner" of an insurance company.
But as tcope has indicated, if an individual person can meet the required financial test a state requires to be an insurance "company", nothing other than their ability to form a company and receive a certificate of authority from the state prevents that from happening.
Does the rules change for Billionaires?
Nope. Just the options they have for using the money they have. More money . . . more options. Some, like Buffet, use their money to acquire ownership interests in other companies or donate their money alongside Bill Gates. Others buy yachts, mansions, jewelry, and other junk. Or allow their spoiled grandchildren to do those things and worse.
Posted: Wed Sep 15, 2010 11:53 am Post Subject:
I have always been told that an individual cannot own an Insurance Company.
I haven't heard of such a thing ever before. I don't think I've ever come across such a law in any of the state insurance websites.
Even Warren Buffet is intelligent enough not to be the "sole owner" of an insurance company.
It's interesting Max. Are you questioning his ability to form a company?
Posted: Wed Sep 15, 2010 07:53 pm Post Subject:
Absolutely not! What I'm trying to convey is that he owns insurance companies through his holding company, Berkshire Hathaway, not in his own name. That puts at least two layers of insulation between him and any personal liability for the demise or catastrophic losses of any of "his" companies.
An individual who purports to be an insurance company, without the benefit of a corporation to insulate against any personal liability is, in my opinion, foolhardy.
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