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Cigna to pay Buffett's firm $2.2B for insurance

Published on NewsOK Modified: February 4, 2013 at 3:52 pm •  Published: February 4, 2013

OMAHA, Neb. (AP) — Warren Buffett's Berkshire Hathaway Inc. has agreed to cover up to $4 billion in insurance losses for Cigna Corp. in exchange for a $2.2 billion premium.

Cigna, which is based in Bloomfield, Conn., announced the reinsurance deal with Berkshire on Monday.

Buffett's Omaha-based company, which includes General Reinsurance, and Geico, will cover liabilities related to Cigna's minimum-death and minimum-income benefits businesses.

Cigna says it's unlikely claims will exceed $4 billion.

Cigna said it expects to record a $500 million after-tax charge in the first quarter, but the transaction will allow Cigna to exit these businesses.

This deal is similar to others Berkshire has done, such as when it accepted $7.1 billion in 2007 to cover up to $9.3 billion in asbestos claims for Equitas.