BRADENTON, Fla. -Florida has become the latest state in which Berkshire Hathaway Assurance Corp. can sell bond insurance.
The state's insurance commissioner, Kevin McCarty, signed Berkshire Hathaway's certificate of authority on Friday, Ed Domansky, communications director for the Florida Office of Insurance Regulation said yesterday.
"They are free to sell bond insurance across the state," Domansky said, adding that the new insurance capacity is "good to the extent that it will add competition and at the same time add stability to the bond insurance market."
Berkshire Hathaway, run by Warren Buffett, announced in late December that it would focus on eight to 10 states with the highest volume of bond issuance, including Florida. The insurer got its license in December to operate in New York and submitted applications or had discussions in other states, including California, Puerto Rico, andRhode Island.
In late January, the National Association of Insurance Commissioners, or NAIC, approached Berkshire Hathaway with a pilot program to fast-track licensing in multiple states. NAIC is an organization of insurance regulators from all 50 states.
Under that pilot program 25 states have licensed Berkshire Hathaway to insure bonds via NAIC's uniform certificate of authority application, said NAIC spokeswoman Heidi Robertson. They are Arkansas, Colorado, Connecticut, Delaware, Florida, Illinois, Iowa, Kansas, Maine, Maryland, Montana, Nebraska, Nevada, New Hampshire, New Jersey, Ohio, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, and West Virginia.
Rachel Baum, finance director for Miami-Dade Countyand one of the largest debt issuers in Florida, said the licensure of Berkshire Hathaway is great news.
"Any additional capacity to provide triple-A municipal bond insurance is needed to ease the market pressures and provide the investor with a peace of mind that investment in municipal bonds is a sound investment vehicle," Baum said.
Miami-Dade County determines on a case-by-case basis the firms from which insurance bids are sought, Baum said.
