September 10th, 2008
Kansas Bankers Surety Co. has long been in the business of providing excess insurance on deposits above the FDIC limits. They provided this service mainly to other banks seeking to take large blocks of public deposits and the additional insurance would cover the amounts above the $100,000 FDIC limits in case of a bank failure.
However, with all of the current trouble in the banking sector, they don’t feel the premiums they charge can off-set a potential loss in the case of a bank failure. No timeline has been given for their eventual total exit.
This unit was owned by Warren Buffett’s Berkshire Hathaway, Inc. Berkshire Hathaway has seen their stock decline about 16% this year. The current share price is $117,900.
It will be interesting to see how this affects the investment portfolios of public entities.
Here is a link to the article on Bloomberg.
-- By +Chris Duncan