Motor Accident Commission

In reply to the Hon. S.C. MULLIGHAN (Lee) (24 July 2019). (Estimates Committee B)

The Hon. R.I. LUCAS (Treasurer): I have been advised the following:

There was no up-front fee received from Berkshire Hathaway.

The transaction involves the outstanding claims liabilities transferring to Berkshire Hathaway's National Indemnity Company, so that all the risks of managing these liabilities were transferred to Berkshire Hathaway.

A reinsurance premium of $717.7 million was paid to Berkshire Hathaway's reinsurance arm National Indemnity Company (NICO), comprising an initial provisional payment of $715.2 million calculated in December 2018, and a subsequent $2.5 million 'True-up' payment made on 10 April 2019. The true-up payment reflects the claims outcomes, management expenses, and other calculations per the terms of the reinsurance deed with BH, which is available online.