Cigna Paying Berkshire $2.2 Billion to Take Annuity

CIGNALogo4Cigna Corp. (CI) struck a deal with Warren Buffett’s Berkshire Hathaway Inc. (BRKA, BRKB) that will transfer up to $4 billion in obligations pegged to once-troublesome annuity operations Cigna began winding down more than a decade ago. Despite being in wind-down mode, the businesses can still pop up as messy distractions in Cigna’s financial reports, and the health insurer has been forced to set aside a war chest of money to support policyholders. Under the new agreement, Cigna is paying Berkshire’s Berkshire Hathaway Life Insurance Co. of Nebraska a total of $2.2 billion. This will come from $100 million in cash, about $1.8 billion in investment assets supporting the business and an estimated $300 million tax benefit according to a recent report at www.foxbusinessnews.com.

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